Nassau/PI tourism: price versus value

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January 07, 2015

Surging Grand Bahama tourism combined with strong showings in the family island markets stand in sharp contrast to Nassau/Paradise Island (PI) tourism, which only began to pick up toward the end of 2014. Still, at least one top tourism executive continues to see potential in the location.
Nassau/PI stopovers were weak at the start of 2014, with five of the first seven months of the year showing declines. In fact, up to July 2014, stopover arrivals to Nassau/PI were down 1.5 percent, but up 30 percent to Grand Bahama and up 3.8 percent to the Family Islands. But towards the end of the year, momentum for Nassau/PI shifted, with arrivals up 2.3 percent year to date (YTD) by October 2014.
Tourism Minister Obie Wilchcombe interpreted that early weakness within the context of a reduction in room inventory as well. With more than 1,000 rooms out of service last year, growth would indeed be limited.
"(Nassau/PI) rates are very good," he insisted. "In fact the rates and occupancy levels are up. Some strategy is deployed to generate even more business. Now the available inventory will get a much needed boost this year with Baha Mar, Lyford Cay, Holiday Inn and others. We are holding quite good and getting set for a boom."
Despite the minister's enthusiasm, there are clear efforts being made by the tourism sector to turn Nassau/PI around: steep discounts offered on everything from hundreds of dollars off air travel with advanced bookings, to free room nights, "kids stay and eat free" and of course, room rates slashed significantly.
One website advertises that with a booking from now through spring - "including Spring Break and Easter!" - prospective guests could stay in a suite at Atlantis, Paradise Island, for up to 55 percent off nightly rates, with children 11 and under staying for free and 30 percent off shallow water dolphin interactions for each guest in the suite.
And Atlantis is not alone: Potential guests are told they can save 65 percent on "romantic suites" at Sandals Royal Bahamian Spa Resort and Offshore Island. And the One&Only Ocean Club is also cutting prices. Prospective guests are told that if they book by March 6, 2015 for travel to One&Only Ocean Club January 4 through December 17, 2015 they will receive up to four nights free: two nights free on a stay of seven nights, paying for five, and four nights free on a stay of 14 nights, paying for 10.
While the deals are almost certain to fill rooms, some observers question what the cut rates may mean.
Wilchcombe interpreted the numbers this way: "What you are seeing is marketing strategy ahead of the season because it slows just after New Year's Day for a couple of weeks. Nassau and PI is a brand in great demand."
Meanwhile, John Conway, general manager of One&Only, spoke frankly with Guardian Business about the Nassau/PI product and about the discounts, which he said are part of a system that is switched on and off as needed. The system has been in place since 2008.
Conway said January is already over budget by four percent, with February also looking strong.
On the question of Nassau/PI, Conway, who has been in The Bahamas for 19 years, said it was "a service/cost equation".
"We have an incredible location," he said. "It is unequalled in the world."
"Where we get in trouble is price versus value. We have to make sure that our service improves at a faster pace than rising costs," he said.
For instance, Ocean Club is one of the most expensive One&Only resorts in the world. Many of the rooms at the resort are near or at $2,000 per night.
"At what point do we hit the top of that? How do you create value at that level?"
Conway's answer: service that anticipates a guest's needs. Noting that the resort's prices are six-star prices, he said One&Only must work to ensure that it remains a value-for-money proposition.
Meanwhile, Conway and One&Only would appear to support the contention that Nassau/PI is in demand. In addition to being four percent over budget for January and February, Conway was able to mark a new trend.
"We really look strong (over the first quarter of 2015)," he told Guardian Business.
He added that the main driver of demand has been the group sector -- more than 10 rooms for one event is considered a group event at One&Only Ocean Club, and Conway said corporate group demand is strong.

Click here to read more at The Nassau Guardian

News date : 01/07/2015    Category : Business, Nassau Guardian Stories

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