Once the government executes a sale agreement for the Grand Lucayan resort, it will redirect the funds from the resort’s operating budget to carry out much needed promotions for the island and rebuild Grand Bahama’s brand, Minister of Finance Peter Turnquest said.
The government spends around $1 million per month to operate the Grand Lucayan, which it purchased in 2018 for $65 million.
“The intention is for them to take over (operating costs) right away,” said Turnquest, referring to the purchaser, Royal Caribbean Cruises Ltd. (RCL) and the ITM Group.
“So, hopefully, with the signing of the heads of agreement and the sales agreement, we should turn over all of the operating responsibility to the new purchaser and that would be the end of the subsidy from that part of it for the government.
“We know that the cost of operating the hotel for us has been roughly $1 million or a little under $1 million. So, that, obviously, would be money that we do not have to spend. We will turn that into promotion dollars for the destination and help to build the brand of Grand Bahama back to what we know it could be.”
Prime Minister Dr. Hubert Minnis previously announced that the government will sign a heads of agreement for the sale of the Grand Lucayan resort on March 2.
In March 2019, the government signed a letter of intent (LOI) with RCL and the ITM Group for the purchase of the resort for $65 million and the redevelopment of the Freeport Harbour.
Under the terms of the LOI, the proposed joint venture between RCL and 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”, according to the government.
The first phase of the development is projected to cost $195 million over two years and create approximately 2,000 jobs.
Worries over the deal emerged following the devastating effects of Hurricane Dorian, which obliterated portions of Abaco and Grand Bahama last September.
The resort sustained minimal damage during the storm.
Turnquest said Grand Bahamians are excited about the deal.
“This is going to be a tremendous stimulus for the island of Grand Bahama,” he added.
“As you know, we just suffered this catastrophic hurricane that has thrown off a lot of the gains that we have seen over the last two years.
“Before that hurricane, we saw growth in the small business sector, in particular. With this hotel coming back on stream now, along with the Carnival project that the prime minister spoke about, we’re going to see the economy of scale return to the island and that is going to allow us to deepen this small business sector, in particular, and provide economic opportunity for ordinary Bahamians.”