Leakage from the Bahamas needs a massive overhaul

Share |

October 25, 2021

Toby Smith of Paradise Island Lighthouse & Beach Club Co. Ltd. (PILH) remains concerned on the current status of The Bahamas with regards to “Leakage” with mathematical proof Bahamians are only getting the crumbs of the economic pie, as confirmed by scholars and the Director General of Tourism.

Leakage, as defined by Wikipedia is “In the study of tourism, the leakage is the way in which revenue generated by tourism is lost to other countries' economies.[1] Leakage may be so significant in some developing countries that it partially neutralizes the money generated by tourism.”

The tourist revenues generated in The Bahamas simply do not end up in the pockets of hard working Bahamians and instead is exported out of our country.

According to Joy Jibrilu, Director General at the Ministry of Tourism (as quoted by the Bahamas Hotel & Tourism Association in a 16th June, 2016 article) “Mrs Jibrilu said 85 cents of every tourist $1 earned ultimately flows back out of the Bahamas. One way to curb this trend, she argued, was allowing Bahamian entrepreneurs to sell their goods directly to the hotels and cruise lines.”

In other words; each Tourist dollar spent in coming to the Bahamas for a vacation, only fifteen cents stays in the Bahamas.

According to TradingEconomics.com, The Bahamas’ Gross Domestic Product (GDP) is $11.25B (2020) and quoted as 50% derived from tourism, and with only 15% of that cited as remaining in The Bahamas, there is no surprise that the Bahamian economy does not have the financial resources to invest more greatly in education, healthcare and Bahamian centric opportunity. We see the affect as $11.25B arrives and only $843,750,000 from the tourism portion comes to Bahamians.

PILH would rather see a paradigm shift away from Bahamians getting the short end of the stick. We are seeking economic equality for all Bahamians and these facts further support that Bahamian resorts and attractions of scale for tourism should be Bahamian owned and operated. The equation, in the current form, is completely wrong: it should be that 80% of tourist revenue stays with Bahamians where it will circulate our local economy many times.

We recognize that there are huge disconnections between who is generating these revenues and receiving the profits verses the Bahamian people. Bahamians are subjected to having to watch those revenues benefit others outside of The Bahamas while our Bahamian natural and human resources are exploited for vast profits.

Each dollar generated in the cruise industry is subjected to the Cruise Lines taking their cut at every level of a completely vertical revenue stream level. Initial booking revenue, tour excursion commissions, casino revenues, onboard retail, low cost imported labour all compete with The Bahamas’ offering

Bahamian Crown Land giveaways, concessions and incentives that Bahamians do not receive while the treasure chest of revenues generated from The Bahamas brand is then exported out of the country leaving Bahamians to share up the meager economic crumbs.

Bahamian tour excursions are squeezed, Bahamian owned Bay Street stores (now unfortunately ousted by foreign retailers) give up a substantial cut of their revenues for the benefit of the Cruise Lines.

The Cruise Lines tout these massive numbers in their “partnership” with Bahamians, paint a robust picture of the hundreds of millions they generate from The Bahamas and are then very secretive on the Leakage side of the argument, knowing they are making the lions share of the revenues and exporting it out of the country. Much of it doesn’t even arrive in The Bahamas

We believe the Ministry of Tourism should have a recent leakage report, in fact, have one on hand for every year to know exactly how this picture looks, however the fact of the matter is they simply don’t, nor is the data in the Air and Sea Arrival Data Reports accurate. When last was a “Leakage Report” commissioned by the Ministry of Tourism?

According to the Ministry of Tourism Air & Sea Arrival Data, in 2019, Cruise Arrivals passengers in the Out Islands totaled 3,179,919 and they spent $28,264,946 equating to just $8.89 per person. “This is alarming to say the least; the cruise lines will boast of the arrivals of passengers, but if the only people benefitting from this, in a meaningful way, is the cruise lines and not the people of the Bahamas then this is ludicrous!”. Using the Ministry of Tourism numbers, if $8.89 is spent and of that 85% is leakage then the Bahamian people are left with $1.33 per passenger, then something has to drastically change!

How can Bahamians decide if cruise lines should receive incentives if we do not know the data to make a mathematically sound choice? Does it make sense for Bahamians to bear the weight of providing $200 million of incentives if Bahamians only end up with netting $30 million? And more so too they attempt to take even more Bahamian Crown Land to replicate this same skewed business model.

Bahamians should also consider that the policy of immigration provides for foreign workers on board cruise lines, and cruise lines have their foreign workers file on to the cruise lines’ private (Bahamian) islands and cays squeezing Bahamians out with inexpensive foreign labour.

So be wary, when the cruise lines tout numbers of projected revenues to make them look good, obtain a clear understanding and decide what is best for our country: $100,000,000 of revenues and the cruise lines gain $85,000,000, leaving Bahamians with $15M or a Bahamian company generating $100,000,000 and keeping the $85,000,000 circulating in The Bahamas economy many times?

News date : 10/25/2021    Category : Environment, Press Releases

Share |