|The Bahamas Investor Magazine
July 1, 2006
July 1, 2006
Although it may seduce you with images of white sand beaches and world-class golf courses, promises of aquatic adventures and high-end spas, make no mistake: tourism is a business. And as global destinations compete for a larger share of baby boomer and Gen Y travel dollars, the competition for that business is growing more intense.
A major contender in the travel industry throughout its long history, The Bahamas has managed to sustain its place as a tier-one vacation destination for decades. Recent figures show that tourism continues to account for more than 50 per cent of GDP, with financial services weighing in second at approximately 15 to 20 per cent.
But at the first annual Globalization and Competitiveness conference held in Nassau this spring, Ministry of Tourism Director General Vernice Walkine warned delegates that “sun, sand and sea are no longer enough” to sustain The Bahamas’ top 10 position as a global travel destination. The Bahamas must begin to differentiate itself as more than just another warm-weather vacation destination, she says, by creating unique experiences that cater to a new breed of visitor–one seeking a complete experience rather than simply a hotel stay.
It’s all about bragging rights and buying power. People have come to view vacations as an entitlement rather than a luxury, Walkine says, and increasingly, they’ve got the money to satisfy their appetite for leisure and adventure.
With over $172 billion in spending power, Gen Y (those born between 1979 and 1994) represents one of the many emerging travel segments being courted by the tourism industry. Part of a growing breed of young, middle-class travellers, they are shunning traditional brick-and-mortar hotels in search of something different. From eco-focused adventures on Grand Bahama Island to lavish resorts based on mythological tales, such as the perennially popular Atlantis Paradise Island, travellers “want to be seen as participating in something different, something that defines who they are as opposed to what they do,” Walkine explains. “These kinds of unique facilities give them bragging rights. They are the first among their peer group to have gone to this particular kind of property or to this particular destination.”
The baby boom generation, meanwhile, is using its earned and inherited wealth to enjoy more time with their families, frequently travelling with both children and grandchildren. This trend toward multi-generational travel, or “togethering” as it’s known in the industry, saw a huge upsurge after the events of September 11, and it’s fuelling a demand for more second homes and vacation homes where families can spend quality leisure time together. Walkine points out that many of the developments currently in the works in The Bahamas are not traditional hotels, but rather vacation and second homes, intended to meet the growing demand from family travellers. And the ready availability of direct flights from major international centres is making it easier for families with small children to make the trek to the islands.
Sun, sea and brand
The Bahamas began to proactively diversify and expand its destination options several years ago by encouraging developments on each major Out Island, with more than 112 projects currently planned or in the works, amounting to as much as $12.6 billion in investment. In addition to providing an expanding roster of unique locations for travellers to explore, the developments are also helping to rectify a longstanding shortage of hotel space on the islands. Within the next three years or so, Walkine notes there will be “a significant increase in the number of available sleeping accommodations in these various islands.”
Although The Bahamas itself is already a world-class destination brand, ranking tenth overall in FutureBrand’s top destination travel brands survey (see below), the ultimate vision for the Ministry of Tourism is to market each Out Island as its own brand, with something unique to offer vacationers. Walkine says this should become a reality within three to five years, once most of the developments are finished or near completion. “I think it’s important for us to be able to see these islands develop uniquely so that we can, in fact, offer something for everyone. That’s been a key part of our strategy for the growth and development of the tourism industry and for sustainability.”
Another lucrative and, as yet, largely untapped growth area being targeted is the outbound travel market from China. That country’s thriving economy and growing middle class with a thirst for new experiences is sparking a travel boom that is expected to be the most dramatic, in terms of size and spending power, of any in recent memory. “China is definitely very high on our agenda… China’s economy is phenomenal in terms of its growth,” Walkine says. “Their GDP is projected to grow by eight per cent per annum for the next 10 years. That’s better than anybody else. And we know that there are a lot of millionaires in China. There’s a growing middle class and they’re looking for new and different destinations to visit.
“They love to shop, they love the casino, they love beaches… and all of our research tells us that to the Chinese, especially this young middle-class Chinese traveller, bragging rights are very important. They like to be able to be the first with whatever it is, whether it’s a new Gucci bag that’s just come out or a new destination. We’d like to be that new destination.”
With an initial goal of generating demand in Beijing and Shanghai, The Bahamas has already undertaken a number of initiatives designed to facilitate tourism from the region. In April of this year, the government opened an agency in China to expedite the acquisition of travel visas by Chinese citizens–a previously difficult and time-consuming process. And in June, they hosted familiarization sessions with Chinese tour operators and travel agents, flying them in to show them the best of what New Providence, Grand Bahama Island and Harbour Island have to offer. “That’s important,” Walkine says, “because until and unless they can experience The Bahamas, they’re not in a real position to sell it to their customers.” A China-based public relations agency has also been hired to get the message across to residents.
Walkine notes that “China is so significant, it’s expected to be the number one outbound travel market in the next six to eight years. There will be more Chinese people travelling globally than from any other country.” And with an expanding roster of direct flights and enough unique experiences to fill a lifetime, The Bahamas plans to keep them coming back.
“We have so many destinations, each of which is really developing differently from each other. They’re not all alike,” she says. “I believe that is what differentiates us from the rest of the Caribbean, because we have as many islands as the rest of the Caribbean put together. I believe that, if I live long enough, 20 to 25 years from now, we will be the Caribbean.”
For The Bahamas’ tourism industry, life is still a beach. Here’s how The Bahamas stacked up in the 2005 FutureBrand survey:
TOP OVERALL COUNTRY BRAND RANKINGS
3. United States
10. THE BAHAMAS
BEST COUNTRY BRANDS FOR …
6.United Arab Emirates