2020 ‘a bust’ for vacation rentals

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A “lifeline for the Bahamian tourism economy” has suffered the “biggest hit” possible as a result of the government’s border closure for US commercial transportation, a top realtor warned yesterday.

John Christie, HG Christie’s president and managing broker, told Tribune Business that 2020 was going to be “a bust” for the Bahamian vacation rental market given that its clients relied heavily on commercial aviation links to access this nation.

He said the loss of such US connections would have a “massive impact” on a sector that has given multiple Bahamians an opportunity to have an ownership stake in the tourism industry, and which is perfectly set-up to offer the social distancing and other health-related protocols required by a COVID-19 environment.

Noting that Airbnb and other vacation rental owners had just started to see guests returning prior to yesterday’s US commercial transportation cut-off, Mr Christie said Canada, the UK and Europe were likely to provide a limited substitute for American guests.

Pointing out that Canadian travellers, as an example, face further obstacles to visiting The Bahamas as a result of the 14-day quarantine they must undergo upon their return home, he added that the stop-start nature of this nation’s re-opening and similar issues elsewhere were also likely to deter potential vacation rental clients.

While much focus has been placed on Atlantis’ decision to extend its closure until possibly November, and the decision of some other major resort employers to follow suit following yesterday’s US commercial transportation cut-off, the move will just as greatly impact Bahamian-owned operations that were becoming increasingly popular with visitors prior to the COVID-19 pandemic.

“It’ll affect the Airbnb market for sure,” Mr Christie told this newspaper of the government’s move. “All the locals were just getting ramped up, people were coming back in and then: Boom. They shut it down.

“Most of the Airbnb people are not able to charter in or come by private plane. It will have a massive impact on Airbnb bookings and shut it down. You might get the occasional Canadian booking, but they will have a problem getting back home because of the 14-day quarantine.

“I think that people are even scared to book because everything is so up and down, up and down,” he added, “so it will have a huge impact on the Airbnb market but not so much the high-end housing market. It directly impact Bahamians. Most of them [vacation rentals] are Bahamian-owned.

“Last year was a record year for many people, and this year is going to be a bust for them. People were opened, bookings were coming back in, and now they’ve had to close.”

Mr Christie said some vacation rental owners may have properties that were suitable for long-term foreign tenants who can still access The Bahamas via air charter, private aviation or private boat/yacht. However, he warned that most will have little choice but to adapt to having zero to no income from their investments for the foreseeable future.

Noting that vacation rentals were ideally suited to addressing visitors’ COVID-19 concerns, Mr Christie told Tribune Business: “They’re going to feel the biggest hit… Everyone’s worried about COVID-19, and many don’t want to go into a busy, large hotel and be with people in an elevator.

“The Airbnb is the lifeblood for The Bahamas and the tourism economy, and more and more people will want to book that whenever we open back up. It is what it is. We’ll see.”

The Central Bank of The Bahamas, in its May monthly economic developments report, said Airbnb data showed a 62 percent year-over-year drop in room nights sold among its vacation rentals as the height of the initial COVID-19 lockdown and border closures bit.

“Specifically, total room nights sold contracted by 61.9 percent, reflecting reductions of 62.7 percent and 53.6 percent in bookings for entire place listings and hotel comparable listings, respectively,” the Central Bank said of the data provided by AirDNA.

“In contrast, the average daily room rate (ADR) for entire place listings and hotel comparable listings firmed by 7 percent and by 5.6 percent to $421.31 and $160.20, respectively. On a year-to-date basis, total room nights sold reduced by 18.2 percent.

“In particular, bookings for entire place listings fell by 19.9 percent, while bookings for hotel comparable listings were lower by 3.2 percent. Pricing indicators varied, as the ADR for entire place listings edged up by 0.6 percent to $399, while the ADR decreased by 2 percent to $156.15 for hotel comparable listings.”

Room nights sold are now likely to contract even further in upcoming months depending on how long the block on US commercial air and sea transportation lasts. Meanwhile, despite expectations that the real estate market will soften due to COVID-19, Mr Christie said himself and his firm “still continue to be very busy” due to both local and international interest.

“We’d never have thought the upside is for more remote locations and island locations,” he told Tribune Business. “Remote, and a good place to hide away from COVID-19, are great. Before, everyone was asking where’s the nightclubs, where’s this, where’s that? Now it’s a totally different world.”