THE BAHAMAS TOURISM ECONOMY: 2008

THE BAHAMAS TOURISM ECONOMY: 2008 The Government of The Bahamas extends a sincere "Thank You" to visitors who participate in the Visitor Expenditure S...
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THE BAHAMAS TOURISM ECONOMY: 2008 The Government of The Bahamas extends a sincere "Thank You" to visitors who participate in the Visitor Expenditure Survey.

Research and Statistics Branch The Bahamas Ministry of Tourism September 2009

THE BAHAMAS TOURISM ECONOMY 2008  

Tourism is a major force in The Bahamas’ Economy. According to information compiled by the Ministry of Finance, Department of Statistics, expenditures by visitors from other countries comprise 69% of The Bahamas’ export earnings and nearly 22% of direct expenditures in Gross Domestic Product1. When the multiplier effect is taken into account, visitor expenditures underpin 51% of the The Bahamas’ economy2. In 2008, the Ministry of Tourism commenced the Visitor Expenditure Survey (VES) to reveal in detail the expenditures of stopover visitors to The Bahamas. The effort aimed at vastly improving the quality and quantity of statistics collected through its Exit Surveys to meet the increasing demands for accurate and more detailed data to feed its System of National and associated Tourism Satellite Accounts. The Report, that follows, describes the first year results of the VES- The Bahamas Tourism Economy:2008, which details stopover visitor expenditures. This Summary highlights the core statistics from that Report and places them within the context of all tourism expenditures. All visitors to The Bahamas in 2008 spent $2,501 billion estimated by combining data from the VES with casino revenues and cruise and day visitor spending3. As Figure 1 and its associated table shows, the vast majority of tourist spending comes from visitors who stay at least one night in The Bahamas, stopover visitors, particular those staying on the capital island of New Providence. Stopovers spent $2,332 billion in total, some 93% of total tourism spending. The $1,654 billion spent in New Providence represents 70.9% of total stopover spending in The Bahamas and 66.1% of all tourism spending in 2008.    

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 The Commonwealth of The Bahamas, Department of Statistics. National Accounts Tables 2006. (Page 86)   The Commonwealth of The Bahamas, Department of Statistics. National Accounts Tables 2006. (Analysis, vii)  3  Total Tourism Expenditure is derived by adding the portion of Casino Win Revenues and Tokes estimated to be  spent by stopovers (98% based on Industry estimates) to the VES estimate, as well as to estimates based on past  BMOT surveys of cruise and day visitors. Note that a question on how much stopovers spent in casinos was not  included on VES questionnaire, only whether or not they gambled. The amount of win revenues reported to the  Gaming Board by the Casino Operators on all islands of The Bahamas is used.  2

1   

                   

 

An anaalysis of stop pover spending for privatte and publicc sector deciision-makingg based on thhe VES reesults requirees different measures m of average exppenditures deepending on the nature of o the cash floow. In termss of stopoverr spending, there t are fouur metrics available to deecision makeers: 4 averagee expenditurre per stopovver , per partty, per visitoor night and per p party nigght. The VES S 5 providees the basis for f calculatinng all four and a their valuues by islandd (see Figuree 2) , by kindd of visitor, and by typee of good, acctivity or servvice (Figurees 3 and 4). FIGUREE 2: ESTIMATTED STOPOV VER EXPENDIITURE  MAJOR ISLLAND OF STA AY ‐ 2008 (EXCLUDEES CASINO SPEN NDING) Scource: BMO OT

ISLAND OF SSTAY New Provid dence Grand Bahaama Island Abaco Eleuthera Andros Bimini Exuma ds Other Island Total

PER PARTY P $3,780 $2,250 $3,360 $3,380 $5,650 $3,020 $4,610 $3,420 $3,360

AVERAGEE EXPENDITUREE PEER STOPOVER PER PARTY NIGH P HT $1,560 $690 $940 $400 $1,250 $400 $1,720 $430 $3,160 $940 $1,290 $510 $2,280 $740 $1,440 $420 $1,440 $550

PER VISITO OR NIGHT $2 260 $1 150 $1 130 $1 160 $3 360 $1 170 $2 280 $1 180 $2 210

Rounded to n nearest 10's

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 In the VES‐ The Bahamaas Tourism Eco onomy:2008, ‘P Per Stopover’ eexpenditures aare refered to aas ‘Per Visitor’  expenditurres,  5  It is impo ortant to note tthat stopover sspending in thiis Summary inccludes casino sspend for the three major islaand  destination n totals only.    

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The moost popular metric m is aveerage expendditure per stoopover. The Governmentt, the media and the pubblic, intuitiveely understannd its meaniing and signiificance. Hisstorically, it is the only averagee reported on n in The Bahhamas. The possible p perspectives in which the other metrics are useful include: i • •



A hotelier who w may favvour using avverage expennditure per party p night as a hotel room ms are typically y sold to parrties and on a per night basis. b A restauran nteur who woould want too maximize the t number of o visitor nigghts for peopple staying in hotel h where meals m wouldd not be preppared and whho would waant to attract the kind of visitors who speend the mostt for meals away a from thheir accomm modation per visitor nigh ht. An activity operator whho may wantt to evaluate options thatt would maxximize the number of stopover s visiitors and theeir average expenditure per p party if thhe activity iss a ‘do once’ ty ype, for exam mple a day or o evening crruise. Or they may want to maximizee average exp penditure perr visitor nighht if it is a ‘ddo daily’ typpe of activityy such as watter sports.

Visitorr night is a measure m of toourism activiity that combbines the perrspectives off party size and a length of stay. With h the objectiive of maxim mizing expennditures,geneerally, plannners and w focus onn expenditurres per visitoor night, eitheer for the economy or marketers would want businesss sector of interest. i A look at these aveerage expendditure levels in Figure 2, shows that, excluding casino c spendding, Andross and Exumaa averages arre substantiaal above the national n aveerage. This reeflects the impact of the spend ding of high-- end visitorrs such as boonefishers onn a small visiitor base (Androos) and of thee clientele off the Four Seeason properrty and relatted developm ments combinned with longer lengthss of stay.

FIIGURE 3: T TOTAL ST TOPOVER R EXPEND DITURES O OF $2.110 0 BILLION N  (Not includ ding $222.1 million gam mbling expenditures) 

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Viewing these from what stopover visitors spent and where they spend it, once gambling is excluded (Figure 3), the breakdown shows that stopover visitors devote almost 60% of their travel budget on a place of stay. Once accommodations are taken care of the next most important category is, of course, money spent on eating in the hotel or at food outlets, restaurants and fast food vendors and the like off property. By island of stay, it is the Nassau/PI, Grand Bahama and Abaco economies that benefit the most from stopover spent. Finally, as Figure 4 shows the Survey can be a rich source of data for marketing purposes.

FIGURE 4: AVERAGE EXPENDITURE PER VISITOR NIGHT FOR  SELECT VISITOR PROFILES (EXCLUDES CASINO SPENDING)    Avg. Expenditure by Country $ per Visitor Night 250 200 Combined Other Purch. Pop. Purch. Activities Meals Accommodation

150 100 50 0 USA

Canada

UK

Avg. Expenditure by Trip Purpose

Other

ALL

Avg. Expenditure by Number of Prev. Visits $ per Visitor Night

$ per Visitor Night 350

$250

300

$200

250 200

$150

150

$100

100 $50

$50

0

0 Vacation Wedding etc. Business

1 (1st)

Casino

2

3

4

5 to 10

11 +

Avg. Expenditure by Accommodation Type $ per Visitor Night $300 $250 $200 $150 $100 $50 0

Hotel etc.

Rental

Marina

Friends etc.

Timeshare

Condo.

Own Residence

Boat

Res. Club

4   

THE BAHAMAS TOURISM ECONOMY: 2008 The Government of The Bahamas extends a sincere "Thank You" to visitors who participate in the Visitor Expenditure Survey.

Research and Statistics Branch The Bahamas Ministry of Tourism September 2009

THE BAHAMAS TOURISM ECONOMY: 2008 Research and Statistics Branch The Bahamas Ministry of Tourism September 2009

TABLE OF CONTENTS

1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. THE VISITOR EXPENDITURE SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3. TOURISM ACTIVITY IN 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Table 1: Stopover Visitor Tourism Activity By Quarter . . . . . . . . . . . . . . . . . . . . . 3 4. PRESENTATION AND INTERPRETATION OF VES RESULTS . . . . . . . . . . . . . . . . . . . . . 4.1 Estimates and Averages in this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Applying the VES Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Comparing the 2008 VES Results with Previous Years Estimates of Stopover Visitor Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 4 5

5. VES RESULTS FOR 2008 AT A GLANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Stopover Visitor Expenditures by - Major Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average Stopover Visitor Expenditures - Country of Visitor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Trip Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Number of Previous Visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Accommodation Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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6. VES RESULTS FOR 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 All Stopover Visitor Expenditures by Major Group and Detailed Types for The Bahamas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table 2: VES Survey Characteristics of All Respondents . . . . . . . . . . . . . . . . . . . Table 3: VES All Stopover Visitors Expenditures by Major Group . . . . . . . . . . . Table 4: VES All Stopover Visitors Expenditures by Island . . . . . . . . . . . . . . . . .

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8 8 9 9 9 9

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Table 5: VES All Stopover Visitors Expenditures on Accommodation by Accommodation Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table 6: VES All Stopover Visitors Expenditures by Activity . . . . . . . . . . . . . . . . Table 7: VES All Stopover Visitors Popular Purchases . . . . . . . . . . . . . . . . . . . . . Table 8: VES All Stopover Visitors Other Purchases . . . . . . . . . . . . . . . . . . . . . . . 6.2 Selected Type of Visitor Expenditures by Major Group . . . . . . . . . . . . . . . . . . . . . . . Table 9: VES Visitation Characteristics and Estimated Average Expenditures of Surveyed Stopover Visitors by Country of Residence . . . . . . . . . . . . . . . Table 10: VES Visitation Characteristics and Estimated Average Expenditures of Surveyed Stopover Visitors by Primary Trip Purpose . . . . . . . . . . . . . . Table 11: VES Visitation Characteristics and Estimated Average Expenditures of Surveyed Stopover Visitors by Number of Previous Visits . . . . . . . . . . . Table 12: VES Visitation Characteristics and Estimated Expenditures of Stopover Visitors by Type of Not Owned Primary Accommodation . . Table 13: VES Visitation Characteristics and Estimated Expenditures of Stopover Visitors by Type of Owned Primary Accommodation . . . . . .

12 13 14 15 17 17 18 19 20 21

APPENDIX : VES SURVEY QUESTIONNAIRE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

THE BAHAMAS TOURISM ECONOMY: 2008 Research and Statistics Branch The Bahamas Ministry of Tourism September 2009

The Government of The Bahamas extends a sincere "Thank You" to visitors who participate in the Visitor Expenditure Survey.

1. INTRODUCTION Tourism is a major force in The Bahamas' Economy. According to information compiled by the Ministry of Finance Department of Statistics, expenditures by visitors from other countries comprise 69% of The Bahamas’ export earnings and nearly 22% of direct expenditures in the Gross Domestic Product 1. When the multiplier effect is taken into account, visitor expenditures underpin 51% of The Bahamas’ economy 2. In 2008 the Ministry of Tourism commenced the Visitor Expenditure Survey (VES) to reveal in detail the expenditures of stopover visitors to The Bahamas. Such a thorough understanding of visitor expenditures is important for formulating Government tourism policies and programs and for private sector tourism-related business planning. This Report describes the first-year results of the VES - The Bahamas Tourism Economy: 2008. The focus of this report is a detailed presentation of visitor expenditures.

2. THE VISITOR EXPENDITURE SURVEY The VES is an on-going exit survey of stopover visitors. Upon leaving The Bahamas a sample of stopover visitors are asked to complete a comprehensive questionnaire recording their travel party expenditures while in the country 3. Stopover visitors, those spending at least one night in The Bahamas, make up the overwhelming portion of all visitor expenditures. The VES questionnaire covers all possible visitor consumption4 expenditures on accommodation, meals, transportation, activities, and other goods and services. Also recorded in the questionnaire are visitor characteristics of home country, 1.

The Commonwealth of The Bahamas, Department of Statistics. National Accounts Tables 2006 . (Tables 86) 2.

The Commonwealth of The Bahamas, Department of Statistics. National Accounts Report 2006 . (Analysis, vii) 3.

Not included in the VES survey are expenditures on international travel to / from The Bahamas, nor gambling. 4.

All investment expenditures, e.g. real estate purchase, are excluded. -1-

stopover visitor consumption4 expenditures on accommodation, meals, transportation, activities, and other goods and services. Also recorded in the questionnaire are stopover visitor characteristics of home country, number in the travel party by age group, number of times the respondent has been to the Bahamas, and whether the stopover visit was inspired by a cruise ship visit. A copy of the questionnaire is appended to this Report. During 2008, eight thousand ninety-eight travel parties responded to the survey, of which 7,961 comprise the data base used for analyses5, encompassing 21,085 visitors who spent 128,944 visitor nights during their stay. Visitor night is the economic measure of tourism activity, taking into account both the number of stopover visitors and their time spent in The Bahamas. This sample size is 1.4 % of all stopover visitors to The Bahamas, encompassing 1.3% of the visitor nights. The VES questionnaire is self-completed by the respondents. This type of surveying has the inherent problem of how to interpret certain responses to various fields which are left blank in an otherwise completed questionnaire. Does a blank mean that a good, service, or activity was not consumed? Or does a blank mean the amount spent was zero? When analyzing the survey responses the interpretation is important for calculating averages and for combining the survey results with other data, such as immigration statistics, to expand the sample expenditure estimates for the entire population of stopover visitors. The VES overcomes the ‘blank response’ problem with a three-pronged approach: 1. the questionnaire ‘asks’ both if a good or service was consumed and the amount of the expenditure, if any. 2. where a good or service was consumed but the amount spent was not filled in, an extensive series of rules is applied to determine if a value of zero should be substituted for the blank. 3. where a good or service was consumed but not assumed to have zero expenditure, an average per visitor night rate of expenditure is substituted for the blank. The average per visitor night expenditure is based on answers of survey respondents who provided relevant expenditure information. This process is called ‘imputing’. Gambling winnings and losses were not surveyed in the VES, although the questionnaire asks if any member of the travel party gambled - with check boxes for ‘yes’ and ‘no’ for a response 6. Overall 46% of the parties surveyed had at least one member who gambled. Information on gambling revenues supplied by the Ministry of Tourism and the Gaming Board for the Commonwealth of The Bahamas, indicate casino revenue of $202.6 million in 2008 due to stopover visitors. In addition, stopover visitors expended $19.5 million in ‘dealer tokes’, a form of gratuity related to gambling activity.

4.

All investment expenditures, e.g. real estate purchase, are excluded.

5.

One-hundred and thirty-seven questionnaires were not useable for some analyses, because crucial information was lacking, e.g. number of nights stayed at an accommodation. 6.

Early in the development of the VES questionnaire, field trails revealed that respondents were reluctant to provide reliable information on their gambling winnings and losses. -2-

3. TOURISM ACTIVITY IN 2008 In 2008 stopover visitors spent $2.3 billion in The Bahamas. This includes casino and related revenues.

Table 1: Stopover Visitor Tourism Activity By Quarter Year Quarter

2007

2008

According to immigration information on stopover visitors arriving to The Bahamas, tourism activity in 2008 was below that in 2007. Table 1 compares the number of stopover visitors and visitor nights by quarter in 2007 and 2008. ‘Visitor nights’ is the sum of nights stayed by all stopover visitors entering The Bahamas (e.g. a visitor staying 5 nights would represent 5 visitor nights). Although in the first quarter stopover visitors and visitor nights were greater in 2008 than in 2007, by 3.4% and 2.3% respectively, in the following quarters the numbers for 2008 were below the previous year’s levels. For the year, the the number of stopover visitors was 4.2% lower in 2008 than 2007 and the number of visitor nights was 3.7% lower. (The smaller decline in the number of visitor nights means the drop in stopover visitors was partially offset by their longer stays.) The downturn after the first quarter of 2008 reflects the onset of a world-wide recession late in 2007 and early 2008 which significantly afflicted international travel markets in most countries.

Thousands (1)

First Stopover visitors Visitor nights

400.6 2,758.5

414.2 2,822.2

Second Stopover visitors Visitor nights

450.0 2,859.4

440.5 2,772.2

Third Stopover visitors Visitor nights

363.8 2,228.7

331.3 2,083.0

Fourth Stopover visitors Visitor nights

313.3 2,207.5

277.0 2,001.6

Annual Stopover visitors Visitor nights

1,527.8 10,054.1

1,463.0 9,679.1

VES Estimated All Stopover Visitor Expenditures (2)

n/a

Casino Revenues from Stopover Visitors (3)

$236.8 million

$2.1 billion $222.1 million

The VES results for 2008 in this report are annual. They relate to stopover visitors. All Stopover Visitor n/a $2.3 Calculations based on the survey information, Expenditures billion which does not include gambling, indicate an (1) Immigration data average per visitor night expenditure of $218 (2) Calculated, refer to text during the year. Multiplying this average times the (3) Based on data compiled by the Gaming immigration figure of 9,679,100 visitor nights, Board for the Commonwealth of The Bahamas, provides an estimate of total expenditure for all includes dealer tokes of $21.8 million in 2007 stopover visitors in 2008 of $2.1 billion. VES and $19.5 million in 2008. survey information is not available for 2007, therefore a comparable 2007 estimate of total expenditures for all stopover visitors cannot be made. Given the higher number of visitor nights in 2007, however, all stopover visitor expenditures for The Bahamas would likely be approximately 4% greater than in 2008, disregarding possible effects of inflation.

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4. PRESENTATION AND INTERPRETATION OF VES RESULTS 4.1 Estimates and Averages in this Report This Report presents the VES expenditure results in a several ways. Section 6.1 contains the all stopover visitor survey results where: - expenditures by major groups and detailed accommodation type are presented as averages per (travel) party, average per visitor, average per visitor night, and total expenditures for The Bahamas. . A party consists of a group of visitors (i.e. individuals), including adults and children, travelling together and sharing expenses. A survey response records the expenditures of all the members of the party. The average party size encountered by the VES was 2.65 visitors. . Visitor nights shown in the VES results are comparable to those in the immigration data. In the VES visitor nights are calculated for each survey response by multiplying the party size by the number of nights stayed by the party. - expenditures by island show averages per party, average per visitor, average per visitor night, and total expenditures. - expenditures on detailed activities, popular purchases, and other purchases are presented as total amounts, and as percentages of parties in the VES making the respective expenditures. There are two types of results in the All Stopover Visitor tables. In general, averages are based on combined survey responses without any adjustment. Inherent in these averages is the potential for biases that may occur because of unrepresentative sampling of stopover visitors by islands of stay. Estimates of total expenditures, however, are weighted by island stayed according to the number of visitor nights by island in the immigration statistics. The purpose of weighting is to offset any bias due to disproportionate sampling of islands. The possible extent of such a bias can be seen in Table 3, All Stopover Visitor Expenditures by Major Group, where the All Item per visitor night average expenditure is $207 when calculated using the unadjusted survey data and $218 when calculated using the island weighted estimate for total stopover visitor expenditures7. Survey averages and estimated total expenditures by island, Table 5, are implicitly self-weighted. Section 6.2 presents major group expenditures for subgroups of stopover visitors and are presented as average per party, average per visitor, and average per visitor night. These averages are not weighted to offset sampling variations by island stayed. The subgroups are by country of visitor, trip purpose, number of previous visits, and primary accommodation type. Estimates of total expenditures by subgroup are omitted, as immigration data for visitor nights by subgroups are currently unavailable for 7.

The all item difference is almost entirely due to a difference in accommodation cost, averaging $119 per visitor night for the unweighted data and $130 per night for the island weighted estimate for total stopover visitors. -4-

weighting and calculating the total stopover visitor expansion factors. Because of the increased chance for VES results to be unduly distorted by sampling error of any kind, no averages or estimates are shown in this Report which are based on fewer than 30 surveys.

4.2 Applying the VES Results Depending on the uses of the expenditure information, some aspects of the results are more applicable than others. For national income accounting and examining economic impacts by sector and region, the most relevant perspective is all stopover visitor expenditures. In this regard, the VES results relate to total expenditures by type of good or service, and total expenditure by island. These estimates are included in Tables 2 through 8. For Government and business planning information, average party expenditure by subgroups may be more useful, where it becomes evident which types of stopover visitors spend the most on various goods and services. Average expenditures are calculated per party, per visitor, and per visitor night. The VES computer program, developed for this project, is able to tabulate (and cross tabulate) the survey results by country of visitor, trip purpose, number of previous visits, primary accommodation, and activity participation. Interpretation of the VES results for Government and private sector planning is complex, and would stress different components depending on perspective and the level of current and anticipated tourism activity. Also a consideration for public and private decisions are the factors of developmental and operating costs, current capacity utilization of facilities, and market potential. Having dissimilar objectives, Government and private sector decision-makers may consider the results of the VES somewhat differently. For example, if the tourism sector is operating at or near full capacity, usually determined by minimal accommodation vacancy, then: - to maximize Gross Domestic Product the Government may wish to promote the kinds of tourism that provide the greatest expenditure per visitor night, with special consideration for those sectors having strongest supply linkages with other areas of the economy. Although precise information on linkages between tourism and The Bahamas economy is not currently available, it is reasonable to expect such linkages may be stronger for most activities, popular purchases for straw market local handicrafts, transportation, and other non-accommodation services. Regarding total average expenditures per visitor night the VES provides the following insights: . as seen on Table 9 there is not a large range in average visitor night expenditures for stopover visitors coming from different countries. The highest, however, is for Canadians at $211 and the lowest is $193 stopover visitors from the United Kingdom. . by trip purpose, Table 10, the highest average visitor night expenditures are from stopover visitors getting married, on honeymoon, or attending a wedding. Their average visitor night expenditure is $310, compared to $200 for stopover visitors coming simply for a vacation.

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. up to a point, repeat stopover visitors maintain their average visitor night expenditures on subsequent visits, refer to Table 10. First time stopover visitors have an average visitor night expenditures of $209. This goes to $220, $213, and $215 for the second, third, and fourth visits respectively. Stopover visitors with more than four trips to The Bahamas tend to have a lower visitor night expenditure, decreasing to an average of $191, suggesting saving costs by staying with friends and relatives or at their own part-time residence. . according to accommodation type, Tables 12 and 13, the highest visitor night expenditures are by stopover visitors staying in hotels, at $255. The lowest visitor night expenditures are among those staying with friends and relatives, at $71. An analysis of private sector decision-making based on VES results is beyond the scope of this Report. Indeed there are many options which could be investigated depending on the nature of the business. Suggested below are possible perspectives for interpreting VES results for private sector decisions, utilizing custom produced VES reports: - a private operator of accommodation services, such as a hotelier, may favour options maximizing average expenditures on accommodation by party night, because hotel rooms are typically sold to parties and on a per night basis. - a restauranteur would want to maximize the number of visitor nights for people staying in hotels (where meals would not be visitor-prepared) - an activity operator may want options maximizing the number of stopover visitors and their average expenditures per party if the activity is a ‘do once’ type, for example a day or evening cruise, or maximize average expenditure per visitor night if it is a ‘do daily’ type of activity such as water sports. If there is significant excess tourism capacity, with high accommodation vacancy rates, the likely goal of the Government and private sector would be to maximize the number of stopover visitors of any kind. With notable excess capacity there is not a trade-off between types of stopover visitors using the tourism resources.

4.3 Comparing the 2008 VES Results with Previous Years Estimates of Stopover Visitor Expenditures The Ministry of Tourism routinely asked stopover visitors about their expenditures for many years as part of a broader survey including visitor satisfaction and personal characteristics. The relatively few expenditure questions in the previous survey’s questionnaire did not allow for estimates of detailed stopover visitor expenditures such as are available with the VES 8. Further, the VES methodology for collecting and processing expenditure information is more elaborate than used previously. The methodological advantages of the VES include: 8.

The VES questionnaire, however, does not inquire comprehensively about stopover visitor personal characteristics, nor does it ask about visitor satisfaction -6-

- the focus and comprehensiveness of the VES questionnaire, explicitly covering all types of consumption expenditures - the use of imputing to fill-in certain responses sometimes left blank in a completed questionnaire, as described in Section 2 of this Report. - using visitor nights as the basis for measuring tourism activity, in conjunction with immigration statistics, to weight and extrapolate the survey results when estimating total expenditures. Users of time series information on stopover visitor expenditures must be aware that from 2008 onward the basis of measurement has changed. Compared to the previous survey, the methodology of the VES provides expenditure estimates that tend to be higher. An analysis of the previous survey’s results, which included gambling expenditures, for the first six months of 2007, and those of the VES for the first six months of 2008, augmented with Gambling Board figures on gambling expenditures, suggests that, all else being equal, the VES estimates of all-item total stopover visitor expenditures tend to be in the range of 20% higher.

5. VES RESULTS FOR 2008 AT A GLANCE The graphs on the following two pages are based on the tables in Section 6.1 and 6.2. The previous discussion of the All Stopover Visitor and Averages tabular results also apply to the corresponding graphs. The tables contain more information on the survey results and characteristics.

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2008 THE BAHAMAS VISITOR EXPENDITURE SURVEY AT A GLANCE

TOTAL STOPOVER VISITOR EXPENDITURES OF $2.110 BILLION (Not including $222.1 million gambling related expenditures)

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2008 THE BAHAMAS VISITOR EXPENDITURE SURVEY AT A GLANCE

AVERAGE STOPOVER VISITOR EXPENDITURES BY GROUP

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6. VES RESULTS FOR 2008 6.1 All Stopover Visitor Expenditures by Major Group and Detailed Types for The Bahamas

Table 2: VES Survey Characteristics of All Respondents Survey Numbers and Visitation Averages 7,961 Parties (surveys) 21,085 Stopover Averages per Party Visitors 2.65 visitors per party (party Size)

48,394 Party Nights 6.08 nights per party (duration of Stay)

128,944 Visitor Nights 16.20 per party (party and size and nights combined)

Table 3: VES All Stopover Visitors Expenditures by Major Group Major Group

Survey Average Expenditure Per: Party

Party Night

Visitor Night

Estimated Total Expenditures (2) $million (per visitor night)

ACCOMMODATION

$1,934

$318

$119

- Meal Plan - No Meal Plan (1)

$2,682 $1,508

$499 $232

$192 $86

MEALS

$574

$94

$35

- Meal Plan - No Meal Plan (1)

$71 $105

$27 $39

***

***

- At Accommodation (1) - Elsewhere

$385 $682 *** $356 $218

$58 $35

$22 $13

ACTIVITIES

$256

$42

$15

$145.0 ($15)

POPULAR PURCHASES

$213

$35

$13

$136.6 ($14)

OTHER PURCHASES

$381

$62

$23

$231.3 ($24)

$3,361

$552

$207

$2,110.0 ($218)

***

ALL ITEMS (3)

$1,256.8 ($130) $340.2 ($35)

1. Includes all accommodation types even those that do not have a meal option. Refer to Tables 4, 12 and 13 for accommodation types. 2. To estimate Total Expenditures, expenditures in the survey sample are weighted and expanded by immigration statistics on island visitor nights (refer to text). Per visitor night amount is calculated by dividing estimated total expenditures by total number of visitor nights in immigration statistics. 3. All Items amount is greater than the sum of the major groups, because major groups cents are not shown.

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Table 4: VES All Stopover Visitors Expenditures by Island Island

Survey Average Expenditure Per:

Party (number in survey)

Party Night (number in survey)

Estimated Total Expenditures (1) $million

Visitor Night (number in survey)

(Immigration Visitor nights thousands)

Nassau and Paradise

$3,776 (2,855)

$689 (15,632)

$260 (41,462)

$1,446.9 (5,563.5)

Grand Bahamas

$2,254 (3,203)

$399 (18,051)

$152 (47,450)

$249.9 (1,642.3)

Abaco

$3,356 (3,203)

$395 (2,964)

$127 (9,161)

$122.2 (955.8)

Eleuthera

$3,375 (389)

$431 (3,041)

$158 (8,283)

$41.9 (264.2)

Andros

$5,646 (350)

$939 (2,104)

$364 (5,424)

$29.1 (79.9)

Bimini

$3,016 (119)

$511 (702)

$169 (2,113)

$54.8 (322.5)

Exuma

$4,606 (744)

$742 (4,615)

$285 (11,992)

$77.4 (270.7)

San Salvadore

$4,543 (69)

$525 (597)

$217 (1,439)

$34.8 (159.7)

Harbour Island

$2,540 41

$381 273

$157 661

$12.0 (76.4)

Other Islands (2)

$2,290 (37)

$255 (332)

$119 (711)

$41.0 (344.0)

ALL ISLANDS (3)

$3,661 (7,961)

$552 (48,394)

$207 (128,944)

$2,110.0 (9,679.1)

Note: ‘number in survey’ may not be proportional to number of all parties / visitors by island. 1. To estimate Total Expenditures, expenditures in the survey sample are expanded by immigration statistics on island visitor nights. 2. Includes ‘unidentified island’ in immigration data (57,200 visitor nights) and in survey sample (10 parties). 3. The All Islands amount is greater than the sum of the islands, because cents are not shown for individual activities. Sum of ‘numbers in survey’ for parties is greater than number of surveys, because of parties staying at more than one island.

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Table 5: VES All Stopover Visitors Expenditures on Accommodation by Accommodation Type Accommodation Type

Survey Average Expenditure Per: Party (number in survey)

Party Night (number in survey)

Visitor Night (number in survey)

Estimated Total Expenditures (1) $million

Hotel and Temporary Rented Villa Condominium / Timeshare / Unit in Residential Club

$2,134 (6,317)

$430 (31,326)

$159 (84,363)

$1,119.1

Your Own Villa / Condominium

$1,408 (336)

$172 (2,748)

$64 (7,371)

$29.9

Your Own Timeshare (or affiliate)

$772 (489)

$105 (3,597)

$37 (9,969)

$29.8

Your Own Residential Club

$862 (44)

$142 (266)

$43 (869)

$2.9

$2,087 (115)

$201 (1,189)

$67 (3,566)

$13.2

Your Own Private House

$373 (242)

$32 (2,805)

$13 (6,515)

$5.8

Friends or Relatives

$105 (287)

$12 (2,514)

$6 (4,742)

$2.6

Marina

$1,882 (274)

$178 (2,883)

$60 (8,533)

$45.7

Boat Offshore

$1,052 (43)

$89 (506)

$26 (1,720)

$4.6

(73)

(470)

(1,034)

$3.3

$1,934 (7,978)

$318 (48,394)

$119 (128,944)

$1,256.8

Temporary Rented House or Apartment

All Others ALL ACCOMMODATION (2)

Note: ‘number in survey’ may not be proportional to number of all parties / visitors by accommodation type. 1. To estimate Total Expenditures, expenditures in the survey sample are weighted and expanded by immigration statistics on island visitor nights (refer to text). 2. All Accommodation amount is greater than the sum of the accommodation types, because cents are not shown for individual accommodation types. Sum of ‘numbers in survey’ by accommodation type for parties is greater than number of surveys, because of parties staying at more than one type of accommodation.

-12-

Table 6: VES All Stopover Visitors Expenditures by Activity Activities

Percent of Parties in Survey Participating

Nature and Sight Seeing Attractions, Historic Places, Sightseeing Tours

Estimated Total Expenditures (1) $million

26%

$18.5

Museums

3%

$0.9

Movies, Theaters Concerts and Shows: - at any Hotel - Elsewhere

5% 1%

$1.5 $0.4

Other Entertainment: - at any Hotel - Elsewhere

9% 5%

$19.1 $4.9

Day or Evening Cruise

8%

$8.1

SCUBA, Snorkel Diving

27%

$31.3

Other water sports (e.g. water skiing, jet skiing, parasailing)

13%

$10.1

6%

$10.9

Fishing

11%

$28.7

Sailing

4%

$5.1

Other Sporting (e.g. horseback riding, tennis, racquetball)

7%

$5.5

-

$145.0

Golf

ALL ACTIVITIES

Note: ‘number in survey’ may not be proportional to number of all parties participating in an activity. 1. To estimate Total Expenditures, expenditures in the survey sample are weighted and expanded by immigration statistics on island visitor nights (refer to text). .

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Note: for Popular Purchases, shown in Table 7 below, the questionnaire asks for the amount of the purchase by location: ‘At Hotel’, ‘Away from Hotel (not straw market)’, and ‘Straw Market’. Table 7 includes the percentage distribution of the amount of the expenditures on popular purchase made ‘At Hotel’ and “Away from Hotel’. The location ‘Away from Hotel’ in the table includes the straw market. Table 7: VES All Stopover Visitors Popular Purchases Popular Purchase

Straw Work (e.g. bags, purses, hats)

Percent of Parties in Survey with Expenditure

Percentage of Amount Spent by Location At Hotel

Estimated Total Expenditures (1) $million

Away from Hotel

17%

19%

81%

$8.1

6%

12%

88%

$1.7

T-shirts

41%

31%

69%

$14.6

Other Clothes, Caps, Footwear

21%

24%

76%

$15.1

Jewelry

25%

19%

81%

$36.6

Perfumes, Cosmetics

6%

24%

76%

$4.6

Photography Equipment

2%

27%

73%

$1.1

China, Crystal

1%

39%

61%

$0.7

Linen

2%

15%

85%

$0.5

Luggage, Bags, Purses (not straw work)

8%

28%

72%

$7.9

Hair Braiding

4%

30%

70%

$1.2

Other Local Handicrafts

7%

21%

69%

$2.5

21%

29%

71%

$8.8

7%

29%

71%

$3.4

24%

19%

81%

$14.3

1%

52%

48%

$15.5

-

-

-

$136.6

Wood carvings

Other Souvenirs Tobacco Bottled Alcoholic Beverages Wedding Ceremony (may include meals and beverages) ALL POPULAR PURCHASES

Note: ‘number in survey’ may not be proportional to number of all parties making popular purchases. 1. To estimate Total Expenditures, expenditures in the survey sample are weighted and expanded by immigration statistics on island visitor nights (refer to text).

-14-

Table 8: VES All Stopover Visitors Other Purchases Other Expenditure Types

Percent of Parties in Survey with Expenditure

Estimated Total Expenditures (1) $million

TRANSPORTATION Jitney, bus, taxi, or other passenger road transportation

72%

$39.7

Automobile, motor scooter, bicycle rental

13%

$16.9

Ferry, water taxi, and other passenger marine transportation

17%

$4.3

Boat rental or charter

5%

$17.5

Other Marina services (excluding mooring and docking)

2%

$5.3

Inter-Island scheduled airlines

2%

$4.7

Private airplane landing and parking services, excursions, charters

1%

$9.7

Motor fuels and oil

12%

$20.9

Medicines, toiletries, and personal items

15%

$3.5

Groceries and household supplies

33%

$33.3

Sporting goods and equipment

2%

$1.1

Reading materials

5%

$1.1

Tools, hardware, marine supplies, and automotive parts

2%

$3.3

Furniture, housewares, appliances, electronic / computer equipment, and musical instruments

1%

$1.6

15%

$3.8

RETAIL PURCHASES

Miscellaneous purchases (e.g. toys, postcards, film, stationery items, flowers, candy, etc.)

Table 8 is continued on the next page.

-15-

Table 8: VES All Visitor Other Purchases Other Expenditure Types

Percent of Parties in Survey with Expenditure

Estimated Total Expenditures (1) $million

22%

$8.6

Repair or service of automobile, boat, and private aircraft

1%

$3.7

Personal services (hairdresser, barber, massage, facial, manicure/pedicure, etc.)

8%

$12.7

Laundry and valet services

4%

$1.3

*

*

Medical, dental, hospital services

1%

$3.6

Banking services (fees only)

4%

$0.6

Insurance services

*

*

Legal services

*

*

Miscellaneous services (e.g. movie rentals, postage, porters, etc.)

3%

$1.0

Other expenditures and ‘Write in’

3%

$23.6

-

$231.3

SERVICES Telephone, telegram, Internet

Education - tuition

ALL OTHER EXPENDITURES

Note: ‘number in survey’ may not be proportional to number of all parties making other expenditures. * Fewer than 30 parties responded with expenditure amounts for this item, while not displayed in category they are still included in ALL OTHER EXPENDITURES total. 1. To estimate Total Expenditures, expenditures in the survey sample are weighted and expanded by immigration statistics on island visitor nights (refer to text).

-15-

6.2 Selected Type of Visitor Expenditures by Major Group The following tables present the results of the VES by subgroup. Average expenditures are based on survey responses without weighting for any disproportionate sampling by island stayed. Table 9: VES Visitation Characteristics and Estimated Average Expenditures of Surveyed Stopover Visitors by Country of Residence United States No. of Parties in Survey No, of Visitor Nights

Canada

United Kingdom

All Other Countries

All Countries

6,515

667

240

539

7,961

98,856

13,996

6,140

9,952

128,944

Per Party Avg. Party Size

2.68

2.59

2.50

2.45

2.65

Avg. No. Nights Stayed

5.60

7.96

10.37

7.64

6.08

15.17

20.98

25.58

18.46

16.20

Avg. No, of Visitor Nights

Estimated Expenditure by Major Group (1) Per Party and Per Visitor Night (second row) Accommodation, May Include Meal Plan and Bundled Activities

$1,801 $118

$2,610 $124

$3,031 $118

$2,165 $117

$1,934 $119

Meals

$557 $36

$664 $31

$742 $29

$599 $32

$574 $35

Activities

$265 $17

$188 $8

$350 $13

$228 $12

$256 $15

Popular Purchases

$191 $12

$341 $16

$275 $10

$320 $17

$213 $13

Other Purchases

$344 $22

$628 $29

$544 $21

$544 $29

$381 $23

$3,159 $208

$4,443 $211

$4,944 $193

$3,858 $208

$3,361 $207

All Items (2)

1. Not adjusted for sampling variation by island. 2. All Items amount is greater than the sum of the major groups, because major groups cents are not shown.

-17-

Table 10: VES Visitation Characteristics and Estimated Average Expenditures of Surveyed Stopover Visitors by Primary Trip Purpose

No. of Parties in Survey No. of Visitor Nights

Vacation

Wedding / Honeymoon

Business

Casino

All

6,286

619

593

104

7,961

105,839

7,141

8,051

1,103

128,944

Per Party Avg. Party Size

2.77

2.21

1.99

2.31

2.65

Avg. No. Nights Stayed

6.07

5.27

5.86

4.85

6.08

16.84

11.54

13.58

10.61

16.20

Avg. No. of Visitor Nights

Estimated Expenditure by Major Group (1) Per Party and Per Visitor Night (second row) Accommodation, May Include Meal Plan and Bundled Activities

$1,950 $115

$2,168 $187

$1,919 $141

$1,643 $154

$1,934 $119

Meals

$589 $35

$447 $38

$629 $46

$561 $52

$574 $35

Activities

$260 $15

$178 $15

$163 $12

$332 $31

$256 $15

Popular Purchases

$191 $11

$543 $47

$142 $10

$261 $24

$213 $13

Other Purchases

$383 $22

$241 $20

$359 $26

$358 $33

$381 $23

$3,374 $200

$3,580 $310

$3,214 $236

$3,156 $297

$3,361 $207

All Items (2)

1. Not adjusted for sampling variation by island. 2. All Items amount is greater than the sum of the major groups, because major groups cents are not shown.

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Table 11: VES Visitation Characteristics and Estimated Average Expenditures of Surveyed Stopover Visitors by Number of Previous Visits One (first) No. of Parties in Survey No. of Visitor Nights

Two

Three

Four

Five to Ten

More than Ten

All

3,548

1,477

821

468

1,058

553

7,961

52,468

22,444

4,546

7,532

19,871

13,527

128,944

Per Party Avg. Party Size

2.62

2.67

2.85

2.64

2.71

2.40

2.65

Avg. No. Nights Stayed

5.57

5.63

5.54

6.24

6.69

10.08

6.08

14.64

15.20

15.96

16.09

18.78

24.46

16.20

Avg. No. of Visitor Nights

Estimated Expenditure by Major Group (1) Per Party and Per Visitor Night (second row) Accommodation, May Include Meal Plan and Bundled Activities

$1,863 $127

$2,043 $134

$2,074 $130

$1,964 $122

$1,904 $101

$1,839 $75

$1,934 $119

Meals

$504 $34

$577 $37

$619 $38

$635 $39

$646 $34

$774 $31

$574 $35

Activities

$209 $14

$246 $16

$198 $12

$276 $17

$354 $18

$495 $20

$256 $15

Popular Purchases

$201 $13

$184 $12

$188 $11

$231 $14

$235 $12

$362 $14

$213 $13

Other Purchases

$285 $19

$298 $19

$321 $20

$354 $22

$460 $24

$1,203 $49

$381 $23

$3,062 $209

$3,349 $220

$3,402 $213

$3,463 $215

$3,601 $191

$4,675 $191

$3,361 $207

All Items (2)

1. Not adjusted for sampling variation by island. 2. All Items amount is greater than the sum of the major groups, because major groups cents are not shown.

-19-

Table 12: VES Visitation Characteristics and Estimated Expenditures of Stopover Visitors by Type of Not Owned Primary Accommodation (1) Hotel (2)

No. of Parties in Survey

Rented House / Apartment

Marina

Friends / Relatives

All ‘Not Owned’ (3)

6,095

113

255

281

6,816

83,366

3,721

8,768

4,900

101,959

Avg. Party Size

2.64

3.19

2.92

2.00

2.63

Avg. No. Nights Stayed

5.08

11.11

11.44

9.12

5.61

13.68

32.93

34.38

17.44

14.96

No. of Visitor Nights

Avg. No. of Visitor Nights

Estimated Expenditure by Major Group (4) Per Party and Per Visitor Night (second row) Accommodation, May Include Meal Plan and Bundled Activities

$2,186 $159

$2,243 $68

$2,105 $61

$167 $9

$2,099 $140

Meals

$604 $44

$722 $21

$829 $24

$321 $18

$593 $39

Activities

$238 $17

$518 $15

$282 $8

$313 $17

$250 $16

Popular Purchases

$209 $15

$210 $6

$455 $13

$123 $7

$213 $14

Other Purchases

$250 $18

$1,072 $32

$1,589 $46

$327 $18

$320 $21

$3,489 $255

$4,767 $144

$5,262 $153

$1,253 $71

$3,477 $232

All Items (5)

Note: ‘number in survey’ may not be proportional to number of all parties and visitors by primary accommodation. 1. Primary accommodation refers to the type of accommodation where a travel party stayed the longest. Sometimes parties stay at more than one type and the expenditures for more than one type are reported within the primary type category. 2. Hotel also includes Temporary Rented Villa Condominium / Timeshare / Unit in Residential Club. 3. Also includes dormitory, Bahamas owned cruise ship and boat rentals, and Bone Fishing Lodge which each had fewer than 30 survey responses, and ‘Other’. 4. Not adjusted for sampling variation by island. 5. All Items amount is greater than the sum of the major groups, because major groups cents are not shown.

-20-

Table 13: VES Visitation Characteristics and Estimated Expenditures of Stopover Visitors by Type of Owned Primary Accommodation (1) Timeshare

No. of Parties in Survey

Condo / Villa

Own Pvt. House / Apt.

Boat Res. Club All ‘Owned’ Offshore

487

332

240

43

42

1,144

10,172

7,407

6,573

1,846

867

26,865

Avg. Party Size

2.78

2.90

2.52

2.33

2.88

2.74

Avg. No. Nights Stayed

7.52

8.30

11.86

13.49

6.40

8.84

20.89

22.31

27.39

42.93

20.64

23.48

No. of Visitor Nights

Avg. No. of Visitor Nights

Estimated Expenditure by Major Group Per Party and Per Visitor Night (second row) Accommodation, May Include Meal Plan and Bundled Activities

$801 $38

$1,440 $64

$479 $17

$1,352 $31

$897 $47

$949 $40

Meals

$553 $26

$455 $20

$598 $21

$806 $18

$551 $26

$543 $23

Activities

$239 $11

$273 $12

$303 $11

*

*

$282 $12

Popular Purchases

$225 $10

$213 $9

$232 $8

*

*

$223 $9

Other Purchases

$448 $21

$910 $40

$1,297 $47

$821 $19

*

$772 $32

$2,268 $108

$3,293 $147

$2,911 $106

$4,041 $94

$2,432 $117

$2,771 $118

All Items (3)

Note: ‘number in survey’ may not be proportional to number of all parties and visitors by primary accommodation. * Fewer than 30 parties responded with expenditure amounts for this group. 1. Primary accommodation refers to the type of accommodation where a travel party stayed the longest. Sometimes parties stay at more than one type and the expenditures for more than one type are reported within the primary type category. 2. Not adjusted for sampling variation by island. 3. All Items amount is greater than the sum of the major groups, because major groups cents are not shown.

-21-

APPENDIX

VISITOR EXPENDITURE SURVEY QUESTIONNAIRE

ver:56

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