Monthly Economic and Financial Developments (MEFD) June 2020
Published: Tuesday August 4th, 2020
Domestic Economic Developments
Domestic economic activity during the month of June continued to be adversely impacted by the Novel Coronavirus (COVID-19) pandemic. Ongoing travel restrictions imposed globally, negatively affected the tourism sector, as the high value-added air segment and the dominant sea component remained on pause. However, the resumption of foreign investment-led projects and post-hurricane rebuilding works provided some impetus to the construction sector. Monetary developments recorded a reduction in bank liquidity, reflecting non-bank participation in a Government bond issuance, even though domestic credit contraction outpaced the deposit base reductions. However, external reserves grew, bolstered by net foreign currency inflows from Government’s external borrowings and residual re-insurance claims inflows.
Preliminary data indicated that monthly tourism output contracted, as global travel restrictions related to COVID-19, unfavourably affected both air and sea arrivals.
After the borders partially re-opened to private aviation on June 15, the latest data provided by the Nassau Airport Development Company Limited (NAD) showed that total international departures stood at 1,006 during the review month, relative to a seasonal expansion of 16.9% to 148,597 in the same period last year. During the first half of the year, outward bound traffic contracted by 57.6%, a turnaround from a 19.4% expansion in the prior year. Underpinning this outcome, the U.S. component reduced by 58.7%, a reversal from a 21.1% increase in the previous year; and the non U.S. component decreased by 51.0% vis-à-vis a 10.0% rise in 2019.
In the vacation rental market, data provided by AirDNA for the month of June showed a 67.0% reduction in total room nights sold, as bookings for entire place listings fell by 68.2% and hotel comparable listings by 53.6%. Similarly, the average daily room rate (ADR) for both hotel comparable listings and entire place listings declined by 3.4% and 2.2%, to $144.47 and $412.68, respectively. On a year-to-date basis, total room nights sold decreased by 39.2%, owing to retrenchments of 40.7% and 24.8% in bookings for entire place listings and hotel comparable listings, respectively. Pricing indicators varied, as the ADR for hotel comparable listings moved lower by 1.5% to $155.52, while the ADR for entire place listings rose by 1.0% to $405.01
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