The determinants of air travel demand to the Bahamas and its seasonality comparison with cruise travel

Abstract

This study explores the differences between air and cruise travel to the Bahamas in terms of seasonality and traffic growth over the period from 2010 to 2022. Despite the presence of 20 international airports and nearly 50 airlines operating in the Bahamas, air travel only accounted for 32 % of foreign arrivals to the Bahamas, as compared to 67 % by cruise travel in 2019. During the 2010–2019 period, air travel increased by 35 %, less than a 49 % growth of cruise travel. Moreover, air traffic showed consistently higher seasonality than cruise traffic, as measured by Gini coefficients over our study period. To empirically investigate the facilitating and restraining factors affecting air travel to the Bahamas, we estimate a structural equation of passenger traffic and airfare, using panel data consisting of monthly air traffic from 96 countries to the Bahamas over the years from 2015 to 2023. Our results shed light on the important role played by flight frequency, direct flight service, low-cost carriers, and airport connectivity in lowering airfare and thus driving inbound air traffic to the Bahamas. These findings will help airlines, airports, and the Bahamian government in developing strategies and policies to increase air travel and tourist arrivals in the Bahamas for its economic growth and prosperity.