|The Bahamas Investor Magazine
July 27, 2016
July 27, 2016
The Bahamas Investor Staff
Serviced by international commercial flights from all over the world, The Bahamas is accessible to anyone, from almost any walk of life. When it comes to ultra-high-net-worth individuals (UHNWI), however, the preferred mode of air travel is still by private jet, and The Bahamas is topping the list of most popular destinations.
There are many reasons why UHNWIs prefer to travel in a private jet rather than by commercial flights (see graph page 60), with the economy of time being the primary reason. There is an average of 90,000 commercial, private and military flights every day, according to the National Oceanic and Atmospheric Administration, and private air travel accounts for nearly 60 per cent of those flights.
By a considerable distance, the islands of The Bahamas are the most popular destinations in the region–particularly for travellers based in the US.
According to figures supplied by charter company PrivateFly, there were 12,566 private jet charter flights to the 10 busiest Caribbean airports between November 2013 to April 2014, with Nassau leading the competition with over 4,000 flights, more than twice its nearest rival St Maarten.
Both Abaco and North Eleuthera also feature on the list, but with significantly less traffic. There are many private jet companies servicing this market, offering charter flights to and within The Bahamas, using the fixed-base operators (FBOs) dotted around the islands capable of handling private aircraft. From a review of its most recent 2,500 charters to the Caribbean, private jet operator XOJET says that The Bahamas accounts for 25-33 per cent of total Caribbean flying, particularly to Nassau and Marsh Harbour. The Caribbean region as a whole accounts for over 20 per cent of the carrier’s annual flying and continues to increase year after year, says XOJET chief marketing officer Shari Jones.
Along with charters and privately owned aircraft, an innovative business model is emerging in the market whereby clients can purchase a jet card from a provider. This offers flight hours from a network of certified operators. Leading the field internationally is Sentient Jet and in the Caribbean region The Bahamas is also its top destination.
“The Bahamas is our number one destination outside of the 48 states of the contiguous US. In 2015 it accounted for 20 per cent of all international travel,” says Andrew Collins, president and chief executive officer of Sentient Jet, which has 5,000 private jet card holders, with a $125,000 entry point. “The main driver is undoubtedly its proximity to the US. It is clearly climate driven, clearly seasonal. It is easily accessible, popular with families and offers access to the gaming market. When you combine all those factors it is definitely an impressive offering.”
Another key element in driving the private aviation market, says Collins, has been promotional efforts by The Bahamas government. “We have seen some really interesting, targeted marketing for the ultra-high-net-worth crowd,” he says, citing efforts by the Ministry of Tourism and Ministry of Financial Services to promote The Bahamas at investment and financial services events in the US.
“The Bahamas has pursued this enthusiastically in recent years and we are starting to see the benefits in the private jet industry.”
Data from Prince & Associates shows that private jets bring an average of $69,000 in spend to the destinations they visit (excluding fuel and landing fees). Private jet travellers contribute around $867 million to the economies of the top 10 most visited countries and Nassau reaps in more than $278 million from private airliners alone, according to PrivateFly.
For Sentient Jet, The Bahamas accounts for 2.1 per cent overall flying. That may sound like a small percentage, but the company is the largest independent jet card firm in the world with around 30,000 flight hours annually and when you factor in that, on average, a private jet trip costs between $15,000-20,000, that adds up pretty quickly.
“Over the last five years, we have generated around $20 million in flying in and out of The Bahamas, with an expected increase this year of around 5-7 per cent accounting for $4-6 million and about 225-250 private jet legs,” says Collins, whose company partners with operators that fly to Marsh Harbour and Treasure Cay, Abaco; Georgetown, Exuma; Governor’s Harbour and North Eleuthera, Eleuthera; Freeport, Grand Bahama and New Providence.
“But economically our impact is much more far-reaching as we bring in more in non-aviation revenues such as villa rentals, charter boats, restaurants. Our overall business is split fairly evenly between business and leisure travel, so we bring all manner of economic trade to The Bahamas.”
So, where are UHNWIs spending their money when they get here? “Our clients are seeking out an authentic, unique experience,” says Collins. “Once you start dealing with ultra-high-net-worth clientele then you find that the types of partnerships you forge are with very unique properties, places that really suit the context of the area. A lot of folks flying into Nassau are going to places such as Albany, which has attracted private flyers in a large, aggregate way. The One&Only Ocean Club is also very popular.”
In the Family Islands, the only restriction of where private airplanes can land is whether the island has a 5,000 ft runway or not and people flying there are going for different reasons. “For people travelling to these destinations, they are mainly looking for some privacy and isolation, staying at private villas or in low-key private homes,” adds Collins. “There is a lot of room in this market.”
In fact, Collins sees continued growth in the region, certainly over the next decade. “In the last three to four years, private aviation in the European Union has been flat, but there has been definite growth in the US, with the Caribbean region and Mexico seeing the majority of private flying this year. We are in a sweet spot right now and it feels really good.”