With a massive resort complex soon to open and the upgrade of its main airport in full swing, The Bahamas looks set for a bright future. Almost exactly a year on from breaking ground, Baha Mar, the new 1,000 acre mega resort on The Bahamas island of New Providence, is now clearly taking shape, and that’s good news for Lynden Pindling International Airport (LPIA) and its boss, Stewart Steeves.
With six hotels, a golf course, world-class spas and a huge 100,000sqft casino, Baha Mar will be the biggest resort in the Caribbean when it opens in 2014 and Steeves, president and CEO of nearby LPIA, is eager to show it off to delegates at Routes Americas, believing it is a potent symbol of the island’s thriving tourism industry.
“Routes Americas is a good opportunity to expose airports and airlines alike to our destination and the new airport, but as the opportunity to understand what the destination has to offer, Baha Mar has to be seen to be believed as it has that scale you can only appreciate by coming here. It can’t be done by PowerPoint!” explains Steeves.
Costing approximately $3.5 billion and adding some 2,250 rooms to the island’s hotel sector, Baha Mar promises to be the ‘last word’ in entertainment and include luxury hotel brands such as the Grand Hyatt, Sheraton and Rosewood. These attractions are expected to make it a magnet for American and international tourists, which are key markets for the island destination.
But even without this huge development, The Bahamas tourism market remains buoyant. One of the Caribbean’s top leisure destinations, it boasts 700 islands and cays, offering visitors everything from the height of luxury at the Atlantis, another huge resort complex on New Providence, through to eco-tourism, water sports, fishing and near-deserted pristine beaches.
And while visitor numbers slipped during the recession in 2008/09, these have been steadily increasing, as have new air services. “We saw a record number of arrivals in 2011; we were within about a 1.5% increase in arrivals by air and a 7% increase in arrivals by air and cruise combined. That is somewhere around 5.3 million arrivals, of which 3.2 million are cruise arrivals and 2.1 million are air passengers,” explains David Johnson, the Director General at The Bahamas Ministry of Tourism and Aviation.
The Bahamas has close economic and social ties with its big neighbour, the US, and a breakdown of visitor numbers reveals that North America is by far its biggest market, with the US accounting for some 82% of traffic and Canada some 6%-7%, followed by the UK with 4%-5%, France, Italy and Germany all under 2%, and then Latin America.
Despite being small, this last market is a key target for Johnson as the booming economies of South America are expected to yield ever-greater visitor numbers in the coming years. Another focus market Johnson has set his sights on is Asia, specifically China, which has made significant investments in The Bahamas, notably in the Baha Mar project itself, which is being financed by a loan of $2.4 billion from China’s Export-Import Bank. A major boost to this market could come through the introduction of a simplified online Chinese visa system, which could potentially boost visitor numbers to the Caribbean islands.
Other markets such as Europe still offer opportunities but also challenges. “We have an established market in the US, but now we are pursuing diversification of our market base; in Europe we are seeing expansion, but apart from Eastern Europe and Russia, there are teething problems due to the economic crisis. We now think this market is going to be flat for the next two years,” Johnson explains.
Some 60% of the Bahamian economy is based on tourism, with the rest of its GDP coming from banking, construction, fishing and agriculture. Tourism also employs almost 50% of the population and it’s a sector that is growing year-on-year.
The popularity of The Bahamas as a tropical leisure destination for international visitors is reflected in the number of long-haul services. LPIA currently has some 22 international routes, 12 of which are to the US and another three connect it to Canada. Copa Airlines runs a relatively new service to Panama, while British Airways (BA) operates the only direct scheduled link to Europe.
As a group of islands, The Bahamas also has a thriving domestic market. From its base at LPIA, national carrier, Bahamasair, operates domestic services connecting the communities of Grand Bahama, Abaco, Exuma, Crooked Island and Acklins, along with some international services to Cuba, the Dominican Republic, and the US cities of Miami, Fort Lauderdale and Orlando.
SkyBahamas, which is also based at LPIA, operates a turboprop fleet to destinations including Freeport, Marsh Harbour, Cat Island, New Providence and charter destinations further afield.
“International and domestic is growing, US traffic is fairly steady, but there has been a shift of visitors away from group travel and conventions to more leisure travellers. Now we are seeing a shift back to group travel due to the current economic conditions,” says Steeves.
While he is happy that LPIA is the fourth busiest airport in the Caribbean and its main market – the US – remains stable, American Airlines is a major player in the market and he would like to see more airlines arrive to offer competition on key destinations. In some cases this is already taking place, thanks to the growing presence of low-cost carriers such as JetBlue, which now operates services to Orlando, Fort Lauderdale and JFK. “We have seen a lot of expansion from JetBlue, whose additional frequencies have been a real boost,” Steeves explains.
A carrier on his ‘wish list’ is Southwest, which he believes could help to open up the currently untapped markets of the Midwest and West Coast. “There is a lot of potential here! Speaking of Southwest and Virgin America, we are not served by carriers west of the Mississippi at all, and there could be opportunities for direct service down the West Coast,” Steeves explains.
Miami remains a major feeder point for Bahamas bound leisure passengers. Only one carrier currently connects Europe directly with the island, that is BA, which operates daily services to Heathrow and it is a thriving route, according to Sabine Reim, the carrier’s Network Development Manager.
“The Bahamas route is operated in conjunction with tag services to Providenciales and Grand Cayman. It is very much a premium leisure route, but of course also contains some business travel demand, particularly related to the financial services sector. Over recent years, British Airways has more generally been diversifying further into premium leisure markets,” she explains.
Last year’s merger of British Airways and Iberia to create the International Airlines Group is opening up new opportunities for expansion in the region according to Reim. “British Airways and Iberia merged in January 2011, and the two carriers also have a joint transatlantic business with American Airlines. The combination of the network of the three carriers creates the potential for new opportunities in North and South America, as well as the Caribbean,” she adds.
“Routes America is a focused regional event and we look forward to spending more dedicated time with business partners to determine the best forthcoming route opportunities that offer our customers an even better network. It will also be the first time that BA will give an Airline Briefing and – if well received – we will consider rolling it out to World Routes.”
In addition to introducing Routes delegates to the delights of Baha Mar and the island’s many attractions, Steeves is looking forward to the opportunity to showcase his new-look airport. In 2007, the operation of LPIA was privatised with Vancouver Airport Services (YVRAS) – now known as Vantage Airport Group – winning a tender to run the airport for 10 years through the government-owned Nassau Airport Development Company (NAD).
The agreement called for YVRAS to modernise the existing facilities, and so far Steeves, who is president of NAD, has made good on that promise, as the airport is now in the second stage of its $409.5 million redevelopment programme.
The first stage, which was completed in early 2011, saw the opening of a new 247,000sqft US Departures Terminal, which boasts five bridge gates, eight ground loading positions, new retail and F&B units and a brand new baggage handling system. LPIA’s US pre-clearance border zone allows for the smooth flow of US travellers.
Stage two involves the demolition of the old US Departures Terminal and the construction of a new $129 million 226,000sqft International Arrivals Terminal and Pier, with completion expected in autumn 2012. The third and final stage involves the construction of a new Domestic Arrivals and Departures Terminal as well as an International Departures Terminal. These combined projects will add 585,000sqft of terminal space and an extra million square feet of new tarmac that will equip the airport to handle up to five million passengers per annum.
“The redevelopment is focused on bringing the facilities up to an acceptable standard, as we had some issues with the state of repair, and at the same time provide some world-class facilities that rank alongside our resorts,” explains Steeves.
But the modernisation is not just about facilities, it is also about customer service, and Steeves is keen to emphasise that LPIA officials are working hard to make the airport a pleasant place to arrive at and depart from and an efficient gateway for airlines. “We are no further away than, say Florida, from much of the US, and this gives us very good connection times, on a par with a US domestic destination. It also means that airlines can operate less expensive domestic equipment on these routes,” he says.
With the expansion of LPIA due to be completed in 2013 and Baha Mar due to open a year later, it would seem a new boom time is just around the corner.
This story appears in the latest issue of Routes News, which can be read here Routes News 1. A copy of the world air service development magazine is also in all delegate bags at Routes Americas.
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