By KRYSTEL ROLLE, NG Staff Reporter ,krystel@nasguard.com

Travel from The Bahamas to the United States has declined by more than 30 percent, a recent report from the U.S. Department of Commerce has revealed.

According to the report, air arrivals from The Bahamas dropped by 32 percent during the first seven months of the year, compared to the same period last year. The decline is indicative of the current pressures on the local economy, with the latest Central Bank figures pointing to a softening in consumer credit, an increase in the number of under-performing domestic loans, and a spike in the cost of living, exacerbated by the volatility of

international crude oil prices, declining tourist arrivals and the credit crunch in the United States.

The decline is also supported by the sluggish sales reported by several travel agencies across New Providence. In fact, a representative from Majestic Travel Agency said September has been the worst month the agency has ever seen. A continuing downward spiral, which started earlier this year, saw the agency's ticket sales drop to a record low last month, said the representative, who did not want to be named.

"This is the lowest that I have ever seen it, and the summer I would say was not as good as summers in the past. September was the worst September that we have ever seen," the representative told The Guardian.

Similarly, Karin Hinzey, manager of First Class Travel, said business has not been good.

"This whole year has been slow. The (U.S. Department of Commerce) figures are very accurate. I would think so based on what we see; that is very realistic. I know that some of our business has been taken away by the Internet but overall, by and large we've seen a decrease," she said.

Debbie Richardson, manager of Treasure Travel, said she believed the economic crisis in the United States, which has since trickled down to The Bahamas, has caused a slowdown in business.

"Things are always slow when people are not making the money that they are used to, or accustomed to making. Something's got to give, so they put traveling on hold," she said.

Meanwhile, Joy Burrows of Premier Travel said while business has slowed a little, she has not seen a dramatic drop in sales at that agency.

"I would say we are down by about 10 percent. Bahamians still have to travel, they still have to go off to the doctor, we still have students that have to travel back to school, and that has not changed at all. But I can say that the people who were traveling to go shopping - that is not as extensive as it was, but people are still going back and forth," Burrows said.

Financial analyst Greg Bethel said Bahamians are probably traveling less because of the tremendous financial hardship that is affecting them across the board.

"It is quite obvious that after paying for food, gasoline for their automobiles, and their mortgage or rent, they have less money, or what they call disposable income to spend, and so Bahamians are being wise. They have less income, so they are spending it prudently, which is what leading financial service professionals have been calling for us to do, including our Central Bank."

Earlier this month, Central Bank Governor Wendy Craigg advised consumers to rein in on unnecessary spending, as banks continue to report growth in the number of loans in arrears.

Bethel said that in such uncertain economic times, Bahamians should be saving or spending money on assets which will increase in value, such as land or homes, and avoid spending money on frivolous expeditions and items.

Therefore, the news of the 32 percent drop in people traveling to the United States from The Bahamas, came as a pleasant surprise to Bethel.

"I am happy to see that more and more Bahamians are heeding that call (from the Central Bank).

"I encourage family vacations where parents and their children go away and spend some time together, but that's different from shopping and buying things that you really don't need now. So we would encourage Bahamians to avoid buying things that they don't really need now, [that] don't really increase in value. Postpone that expenditure until the economy in the U.S. turns around and we have more tourists from the U.S. coming here," he cautioned.

Bethel said recessions can last anywhere from six to 18 months; however, he was optimistic about the country's ability to successfully rebound from the economic crises.

"I am confident that with all of the measures that the government and the political leaders are taking, that they will get the economy turned around and that banks will begin lending again, and the economy will grow because of lower interest rates. It will take a while before the turn around, but it will happen," she said.

According to the Central Bank's 'Monthly Economic and Financial Developments - August 2008', consumer loan arrears grew by $32.8 million (19.1 percent) in August. In addition, mortgage arrears also rose during the month, resulting in overall growth of $28.9 million (11 percent) for the first eight months of 2008.

The financial institution further revealed that banks increased their loan loss provisions by $27.6 million (22.9 percent).