As already indicated, tourism has been the motor of the Bahamian economy for the past several decades; the nation's geography, including its climate, natural beauty, and proximity to the United States, have made it a prime tourist spot. Tourism is the major determinant of the well-being of the Bahamian economy and has maintained steady growth since World War II. The government has successfully implemented policies to increase private confidence and investment in the sector. It has transformed tourism into a year-round industry, overcoming the seasonal fluctuation of demand by aggressively promoting specialized summer tourist attractions. In 1986 the World Bank estimated that the Bahamas accounted for 20 percent of stopover visitors in the Caribbean region as well as having a large share of cruise ship passenger arrivals.

The Bahamas achieved record high levels of foreign visitors in 1985 and 1986 with 2.6 and 3 million visitors, respectively. The statistical breakdown of foreign arrivals in 1985 included 52 percent stopover visitors, 43 percent cruise ship arrivals, and 5 percent day visitors. Total tourist expenditures in 1985 amounted to US$870 million. Most of the expenditures were attributed to stopover visitors, who accounted for 92 percent of the total in 1984; by contrast, cruise ship passengers accounted for just 6.6 percent of total visitor expenditures in that year.

The major tourist centers were New Providence (Nassau, Cable Beach, and Paradise Island) and Grand Bahama (Freeport). Fiftyeight percent of stopover visitors in 1984 went to New Providence, 25 percent to Grand Bahama, and 17 percent to the Family Islands. Most of the tourist growth in the mid-1980s occurred in New Providence. Grand Bahama experienced a steady decline in tourist arrivals, reaching a five-year low in 1984, whereas the Family Islands had a steady flow of tourists. The average length of stay for stopover visitors had declined substantially from 7.14 days in 1980 to 6.46 days in 1984, reflecting the trend toward short package vacations of three to four days.

The government was actively involved in the tourist sector in the mid-1980s. The government-owned Hotel Corporation of the Bahamas, established in 1974, had seven major hotels (four in Nassau and three in Freeport). All were managed by international hotel management companies. The Hotel Corporation also owned a golf course, a marina, and four casinos (two in New Providence and two in Grand Bahama). In 1983 the corporation completed work on a new 700-room hotel at Cable Beach with a convention center and a casino.

The Ministry of Tourism marketed and monitored tourist services; a World Bank study labeled it one of the most effective tourist ministries in the world. In addition to its headquarters in the Bahamas, the ministry also operated offices in nine cities in the United States, three in Canada, and three in Western Europe. Bahamasair, the national airline, provided the only scheduled interisland air service. Competing with several airlines in the North American market, Bahamasair managed to control over 25 percent of North American routes to the Bahamas.

Since its development after World War II, the tourist industry has been dependent on the North American market. In the early 1980s, this dependency increased further. Between 1980 and 1984, Canada's and Western Europe's percentage share of the market decreased. The major factor in the increased United States share of tourist trade was the strong value of the United States dollar, to which the Bahamian dollar was pegged. Bahamian vacations for Canadians and West Europeans became all the more expensive. This dependency on the United States for tourist receipts made the Bahamian economy quite vulnerable to downturns in the United States economy. A 1986 World Bank study indicated the strong relationship between the performance of the tourism sector and the performance of the United States economy. A decline in the strength of the United States dollar has boosted the Canadian and West European share of the market, but continued benefits along these lines depend on the capability of the Ministry of Tourism to tap those markets effectively. To this end, the ministry maintained offices in Canada and Western Europe.

In late 1986, the government's plans for improvements in the tourist sector included programs to improve marketing and infrastructure and to work toward balanced growth of tourism to the Family Islands. A multimillion-dollar marketing campaign was planned, followed by the launching of a national magazine campaign across North America. Major tourist infrastructure programs included improvements to Nassau International Airport and Nassau Harbour and upgrading of docks and airports in key Family Islands. The government also planned to bring more cruise ships to the Family Islands to tap the potential of these underutilized tourist spots.

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Source: U.S. Library of Congress