Turnpage

Please visit our sponsors

RSS Feed
 

Features - July 2007

 

Advertisement

The Bahamas Investor

The Bahamas Investor on facebookFollow The Bahamas Investor on TwitterSubscribe to RSS feeds from The Bahamas Investor
HOME > 
Features > 
A group travel boom

A group travel boom

Specialized groups, conventions and incentives

Published:
Date:
Updated:
Author:
The Bahamas Investor Magazine
June 27, 2007
June 27, 2007
Paul Hallihan

Capturing top spot is what it’s all about for a thriving niche market—group travel. And The Bahamas is gearing up for the competition. For travel service providers that means providing more than sunny weather and picture-perfect beaches. Group travel ups the ante on the types of services resort operators are called upon to offer, ranging from state-of-the-art conference room technology to specialized cuisine and engaging activities.

The diversity offered by group travel makes it “very, very different” from other forms of tourism such as cruising and individually booked hotel packages, says James Malcolm, executive director of group travel for the Bahamas Ministry of Tourism (MOT). “We’re very excited about the group travel market … it’s definitely growing,” says Malcolm.

As an example of the diversity reflected in the group travel experience, in April of this year, about 600 members of a Jewish group from the US booked into rooms and meeting space for 11 days at the Westin and Sheraton at Our Lucaya Resort on Grand Bahama. The religious group from the New York area was conducting a fund-raising retreat and Passover celebration. The group brought its own privacy screens, wine, kosher food and chefs plus all kinds of religious materials, says Malcolm. And this group has struck a four-year deal with the resort for its annual retreat.

“It’s a great piece of business for the Westin Our Lucaya,” he adds, noting that group travel in The Bahamas has grown by about 10 to 15 per cent since 2005. Last year, tourist groups logged about 270,000 room nights, generating approximately $65 million in room revenues at hotels and resorts on New Providence and Paradise Island according to the Nassau Paradise Island Promotion Board. This year, tourist groups at the five major resorts on Grand Bahama are projected to tally about 66,000 room nights worth about $14.1 million, says Malcolm.

Catering to niche markets
Some of the factors fuelling the boom include cut-rate flights to Nassau, the expansion of resort conference space and a tax agreement with the US that allows Americans to write off business meetings and conventions in The Bahamas in the same way they could if they held them at home. Groups are also drawn to The Bahamas’ lush, subtropical climate, exotic beachfront resorts and crystal-clear waters.

Linville Johnson, the MOT’s deputy director of religious markets, says The Bahamas is hoping to tap into the lucrative $7.5 billion a year religious group travel industry in the US. Unlike secular visitors, faith-based groups tend to spend more time and money outside the resorts. They are also more likely to book hotels for mid-week stays and during the so-called lean summer season, says Johnson. Accordingly, the MOT has launched a print ad campaign in trade media in North America to market The Bahamas as a religious travel destination. “We need to get a message out to the marketplace. … It’s a huge potential market, huge and growing,” says Johnson.

Corporate travel
But catering to religious groups is just the tip of the iceberg. Local resorts are now eyeing two other kinds of group travel that are even more lucrative: corporate travel and its close cousin, incentive travel. A Bahamas-US agreement called the Tax Information Exchange Agreement (TIEA), is luring more corporations here for business conferences and trade shows. Signed in 2002, the TIEA came into effect in January last year and allows US corporations to choose The Bahamas as their venue for meetings and conventions and get a cost-of-doing-business tax deduction from the US Internal Revenue Service. The upshot is that Bahamian resorts can now compete with US destinations for corporate group travel.

“We want to grow with the TIEA convention tax law … We want to use that as the tickler, so to speak, to get people to come down to The Bahamas,” says Malcolm.

Atlantis is aiming for the corporate group market. Part of its $600 million Phase III expansion this year included the March opening of a new convention centre that doubled the resort’s existing indoor conference space to about 200,000 sq ft. This expansion also includes the largest ballroom in the Caribbean, at 50,000 sq ft, and an in-house, state-of-the-art audio-visual production company to service high-tech groups, says Mitch Ostrow, vice-president of group sales for Atlantis. “We are very much positioned to take huge 2,000 [to] 3,000-person groups now. We can do that, we can do trade shows, we can do unbelievable events,” says Ostrow. “Definitely there’s plenty of room now with a lot more groups on the horizon.”

Meanwhile, Cable Beach Resorts, which includes the Nassau Beach Hotel, Wyndham Nassau Resort & Crystal Palace Casino, and the Sheraton Cable Beach Resort, has its eye on the same market. “I think the TIEA initiative is a very positive one. It will bear tremendous fruits for the local tourism industry,” says Robert Sands, senior vice-president of government and external relations for Cable Beach Resorts, now part of Baha Mar Resorts Inc. These resorts, acquired by Baha Mar in 2005, offer roughly 55,000 sq ft of convention and meeting space. But, says Sands, Baha Mar, along with partners Starwood Hotels & Resorts Worldwide Inc and Harrah’s Enter-tainment Inc, is gearing up to compete for corporate conventions in 2011 when it unveils more than 200,000 sq ft of meeting space as part of Baha Mar’s $2.3-billion development on Cable Beach.

Sands says corporate groups could account for up to 35 per cent of bookings at the Baha Mar Resorts complex, which should pump up its bottom line, since conventions entail multiple-night stays and are usually booked months or even years in advance. Sands says travel groups can also request that tourism staff cater to their unique needs such as specialized diets, high-tech gear or handicapped facilities.

Lio Mograbi agrees. He is vice-president of sales and marketing/DMC with Bahamian-owned Cacique International Ltd, which operates a destination management company running group travel programmes in The Bahamas. Every group is very particular, very individual. … So we treat everybody as a VIP, definitely,” says Mograbi. He says that while The Bahamas has always been attractive to travel groups, the TIEA is now an “added bonus,” attracting new groups here and repeat business.

Business conferences also mean the MOT must work with other government departments, local shippers and brokerages to ensure the bureaucratic wheels “stay greased” to attract corporate conventions to The Bahamas, adds Malcolm. Businesses holding trade shows here need to be able to navigate easily through paperwork required for customs clearance and repatriation of equipment.

An eye on the prize
Incentive travel, on the other hand, is the flip side of the tax-break/convention market. And it takes up an even bigger slice of the group-travel pie, accounting for more than half of all group travel in The Bahamas, says Malcolm. These groups consist of top-performing employees plus their spouses or friends enjoying a free trip. “More and more companies see the value of rewarding their top performers with travel as opposed to just giving them a cash bonus each year,” says Malcolm. Incentive groups typically don’t produce a TIEA tax break for US corporations; these groups are just here for fun, not business.

Happily, incentive groups tend to produce more local jobs because things like meals, tours and even flowers are part of the prepaid package. And these groups tend to have more personal cash to spend, says Malcolm. “Everyone’s making money locally … so the (economic) multiplier effect is greater, much, much greater.” Malcolm says most incentive groups come from the financial services sector, automotive financing and the software sector. And, he says, resort staff must ensure high-quality consistent service to keep attracting incentive groups to The Bahamas. “You and I work for the same company, darn it, you and I better have the same top-quality tourist experience.”

While Atlantis, Cable Beach Resorts and resorts on Grand Bahama continue to lure incentive groups, the Family Islands could also enter the market. What is needed, says Malcolm, is for these islands to establish top-notch, brand-name resorts that will draw the incentive travel crowd, because corporations are always searching for “the latest and the greatest” vacation sites. “Each year the company asks, ‘Okay, how are we going to outdo last year’s trip?’ The Out Islands are untapped for incentives.”

Most recent MOT statistics reveal that 4.8 million tourists visited The Bahamas in 2005, approximately 3.6 million of whom were cruise ship passengers. The remaining 1.2 million were stay over tourists and about 25 per cent of them were group tourists.

Whether it is religious, corporate or incentive groups, the MOT is now targeting group travel management companies, corporate meeting planners and vacation site selection firms to expand this burgeoning market niche. “It’s very lucrative for The Bahamas, because of the spin-off effects, so many people can tap into it,” Malcolm concludes. “It is a relationship business in the group-travel market; people buy from people they like.”

Related links

  • No Related Posts

Privy Council sits outside Britain

With a port expansion, trans-shipment centre and billions in new development, Grand Bahama is redefining itself for the modern age

The Bahamas Investor
Administrative Links
  


  © 2024 ETIENNE DUPUCH JR PUBLICATIONS LTD