The announcement last week that a letter of intent was signed between Lucayan Renewal Holdings Ltd. and Royal Caribbean Cruises Ltd. (RCL) and the ITM Group for the purchase of the Grand Lucayan resort on Grand Bahama for $65 million, and redevelopment of the Freeport Harbour, was good news for the people of the island.
There was controversy last year when the government decided to buy the property. It is made up of three hotels – Breaker’s Cay, Memories and Lighthouse Pointe – and closed in 2016 after damage caused by Hurricane Matthew. Only Lighthouse Pointe reopened.
The government bought it for $65 million from Hutchison Whampoa. It did not think Hutchison was sufficiently motivated to sell.
Lucayan Renewal Holdings Ltd. is the special purpose vehicle established by the government with responsibility for finding a buyer.
The government said the proposed joint-venture project between RCL/ITM will “include the redevelopment of the Grand Lucayan resort into a world-class destination, featuring water-based family entertainment, with dining, gaming and entertainment options, and five-star hotel accommodations”.
“The redevelopment of the Freeport Harbour is anticipated to result in a significant increase in cruise ship arrivals, bringing approximately an additional two million passengers annually to Grand Bahama,” said the Office of the Prime Minister.
The first phase of the development is projected to cost $195 million over two years with the creation of approximately 2,000 jobs.
The ITM Group said it is “committed to co-develop with RCL a world-class destination and a leading cruise port hand-to-hand with The Bahamas government”.
Royal Caribbean International CEO Michael Bayley said the redevelopment has tremendous potential to significantly boost tourism in Grand Bahama.
A final sale is badly needed for Grand Bahama. The unemployment rate on the island was 11.9 percent in the most recent labor force survey, which was conducted in November. That figure, though, masks the true situation. A sharp decline in economic activity over the past 15 years has led to population flight from the once prosperous island.
Grand Bahama needs the jobs that would be created during the construction phase of this project. It also desperately needs the permanent jobs projected at the resort’s opening.
While this announcement is good news, a measure of caution is also necessary. What was announced was just a letter of intent. The Wynn Group made it to this stage with the government, too, for Grand Lucayan. A final deal was never reached, however.
If the government and the ITM Group and Royal Caribbean reach an agreement, it would take months. Realistically, work would probably start next year.
This is a good time for this project. Tourism is booming.
The Bahamas welcomed a record-breaking number of visitors last year. According to the Ministry of Tourism, 6.6 million tourists visited in 2018, an increase of 7.9 percent compared to 2017. The previous record was in 2014 when 6.3 million tourists came to the country. Air arrivals, which represent the higher-spending visitors, increased by 16.7 percent over 2017.
With increased tourist arrivals comes increased investment in the industry – our main industry.
No matter what this government attempts, the naysayers criticize. The comments from the Progressive Liberal Party (PLP) and Pineridge MP Frederick McAlpine, skeptical of what was announced, should be expected. They do not want the Minnis administration to succeed.
Bahamians should watch and judge this government by the results it achieves. The last PLP administration left the resort mostly closed with no new buyer. The Minnis administration is on track to sell it and have it redeveloped and opened. If it accomplishes that, that’s success the PLP could not accomplish. It would then be clear which administration did better for Grand Bahama when it comes to this hotel.
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