11282023 BUSINESS

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business@tribunemedia.net

TUESDAY, NOVEMBER 28, 2023

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Hotels eye 10% growth for peak winter season By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

t 0O ATJHOJmDBOU SPPN BAHAMIAN resorts are poised for an up to 10 percent year-over-year increase in busiSBUF KVNQ ness volumes for the 2024 first quarter, it was revealed yestert #VU AHSFBUFTU day, with the sector’s “greatest opportunity” still untapped. Robert Sands, the Bahamas PQQPSUVOJUZ Hotel and Tourism Association’s (BHTA) president, told TribROBERT SANDS TUJMM VOUBQQFE une Business that this country’s largest industry is eyeing “a growth in average daily room very strong and very robust” rates (ADR)” of 5-7 percent, he t #)5" DIJFG peak winter season based on added that it is also forecasting bookings and the pace “better yields” for the upcoming IPQFT GPS advanced at which they are being made. Christmas and New Year holiday Disclosing that the hotel sector period following a “very strong” SPPN JODSFBTF has enjoyed “very significant Thanksgiving holiday weekend.

However, Mr Sands told this newspaper that the “greatest opportunity” to maximise tourism’s economic benefits in the short-term remains unfulfilled due to the continued shortage of hotel rooms and other types of accommodation to meet visitor demand for a Bahamas vacation. With the British Colonial set to increase hotel room inventory by 300 when it opens next month, the BHTA president voiced optimism that The Bahamas could increase available accommodations by 600 units before the 2024 first quarter closes. Mr Sands added that the strength of visitor demand is such that any extra available rooms “will always be filled

quite quickly”, making it imperative that The Bahamas restore “as much inventory as we can in the shortest possible time”. “I think Thanksgiving was very strong for most of the hotels, and advanced bookings for the first quarter of 2024 certainly remain very strong and very robust,” the BHTA president told Tribune Business. “I think the hotels are looking at a very strong first quarter. I think we should do better than last year, absolutely. “The one remaining challenge, as I’ve always said, right now is the inventory - the quantity of hotel rooms. There’s only so much growth you can have

IMF blows hole in Largest Bahamas First stake Gov’t deficit target targeted in acquisition move t 'PSFDBTUT ASFE JOL OFBS USJQMF #VEHFU FTUJNBUF t 8BSOT JU XJMM CF ADPOTJEFSBCMZ MBSHFS BUù N t 4JHOBMT GVSUIFS BVTUFSJUZ OFFE UP IJU BNCJUJPOTù By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE International Monetary Fund (IMF) last night blew a hole in the Government’s 2023-2024 Budget projections by warning the fiscal deficit will likely be almost three times’ higher than forecast. The Washington D.C. based Fund, unveiling its statement on the annual Article IV consultation with The Bahamas, estimated that the current fiscal year’s deficit will be “considerably larger than that expected in the Budget” at a sum equal to 2.6 percent of gross domestic product (GDP). This is almost triple the Davis administration’s forecast of a deficit equivalent to 0.9 percent of GDP or total Bahamian economic output. The IMF’s prediction, if accurate, would mean that the deficit - which measures by how much government spending exceeds its revenue income - would balloon to around $378.73m compared to the Government’s $131.1m forecast.

“While the objectives of the authorities’ medium-term fiscal plan are laudable, staff assesses that more policy measures will be needed to achieve this targeted adjustment,” the IMF said of the Davis administration’s fiscal consolidation targets. “In particular, based on current policies, the fiscal deficit is expected to be 2.6 percent of GDP in 20232024, considerably larger than that expected in the Budget. Over the mediumterm, debt would fall to 78 percent of GDP by 20272028 but gross financing needs would remain high for the next several years at around 20 percent of GDP. “Even though, under this path, debt is judged to be sustainable, a faster reduction in debt would be valuable in lessening the risk of sovereign stress and, in so doing, would be rewarded through a lower interest burden for the public debt.” Time will tell who is correct - the IMF or the Government - given that there is a $247.6m difference between their

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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE largest shareholding in Bahamas First may soon change hands with the potential buyer already signalling its desire to expand that ownership interest beyond the initial 20 percent. The BISX-listed property and casualty insurer, in a disclosure to the capital markets yesterday, said Canada-based Definity Insurance Company (formerly Economical Mutual Insurance Company) was in negotiations with an

unnamed purchaser to sell its equity interest in Bahamas First. Few specific details were provided, and there is no guarantee that a deal will be sealed, but the announcement disclosed the purchaser is interested in expanding its Bahamas First ownership beyond the near-20 percent it would immediately inherit should a sale close. “The ultimate beneficial owner of The Economical Insurance Group (TEIG) Holding Company (Barbados) Ltd, which holds just under 20 percent of the issued ordinary shares of

THE International Monetary Fund (IMF) last night called for a further “reduction in the limit” on how much funding the Central Bank can provide to the Government as it signalled the present bar is too high. The Fund, in its statement on the annual Article IV consultation with The Bahamas, argued that present restrictions on the

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE International Monetary Fund (IMF) last night urged The Bahamas to undertake “deeper efforts” to regulate digital assets firms by providing more resources to inspect their operations. The Fund, in issuing its statement on the annual Article IV consultation with this nation, warned that “vigilance will be of the essence” in supervising the fast-evolving industry as The Bahamas continues to manage the fall-out from last

November’s implosion of the FTX crypto currency exchange. In particular, it called on The Bahamas to ensure that planned reforms to the Digital Assets and Registered Exchanges Act, the key law in its regulatory regime, are aligned with international standards set by the likes of the Financial Stability Board and Basel Committee. “Deeper efforts are recommended to analyse, monitor and mitigate financial stability risks stemming from crypto assets,” the IMF urged. “The regulatory framework for crypto assets has been updated

banking regulator’s lending to the Government should be tightened as they are less restrictive than those in other Caribbean countries that also have fixed exchange rate regimes. “Additional steps should be taken to place more binding limits on Central Bank financing of the fiscal deficit,” the IMF urged. “The authorities have made amendments to the Central Bank Act prohibiting

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Canada. This would ensure dividends paid by Bahamas First were taxed only at the lower Canadian rate. Patrick Ward, Bahamas First’s group president and chief executive, was yesterday unable to say what kind of advantages and benefits the deal would bring to the property and casualty insurer, or what level of ownership interest the purchaser is ultimately seeking. “I really don’t have an answer to either of those questions,” he told Tribune Business. “There’s very little I can say on this.” Nor was he able to give a timeline for the deal’s potential completion. “I don’t have anything definitive about a timeline,” Mr Ward said. “We will report developments that are

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IMF: ‘Deeper effort’ on digital asset regulation

IMF: Further ‘limit’ Central Bank’s financing of Gov’t By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

Bahamas First Holdings, is in discussions with an international property and casualty and reinsurance investor (the acquirer) to sell either TEIG or TEIG’s 20 percent interest in Bahamas First Holdings’ shares,” the notice said. “The acquirer has also expressed interest in acquiring additional shares in Bahamas First Holdings.” Definity, and before it The Economical Insurance Group, likely held its Bahamas First stake via a Barbados holding company so it could exploit the double taxation treaty that Caribbean state has with

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CENTRAL BANK OF THE BAHAMAS

and the authorities have legislated an amendment to the Digital Assets and Registered Exchanges (DARE) Act to strengthen the regulation and supervision of crypto assets. “Critically, this should be accompanied by the provision of more resources for

on-site inspections to help identify and rectify operational deficiencies and reduce reputational risks. “Further amendments to the legislation to fully align The Bahamas’ framework for crypto assets with global standards like the

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