Friday, October 11, 2019
By NEIL HARTNELL
Tribune Business Editor
The Grand Lucayan resort will re-open on Tuesday, its chairman revealed yesterday, in a move that will return 200 staff to work and seek to narrow the government’s ongoing subsidy.
Michael Scott, head of the Lucayan Renewal Holdings Board, told Tribune Business that the government-owned resort may open some rooms in the long-shuttered Breaker’s Cay property as well as the 196-room Lighthouse Pointe depending on the strength of demand.
He said Freeport’s so-called “anchor property” had to continue “generating as much revenue as we can” to stem the bleeding for the Bahamian taxpayer ahead of the resort’s anticipated sale to the ITM Group/Royal Caribbean group as part of its $195m first phase harbour redevelopment.
And Mr Scott also signalled that the re-opening will lift the burden imposed on the nearby Pelican Bay resort, which has been running at full occupancy ever since Hurricane Dorian struck and acted as virtually the only hotel accommodation open to non-governmental organisations and disaster responders.
“Until we complete [the sale] we’ve got to continue to generate as much revenue as we can, and there’s demand for the space with various market providers coming in and first responders,” Mr Scott said in confirming the October 15 re-opening. “It was mentioned to me this morning that Carnival wants to rent some rooms. There is demand for it.
“The essential thing is that until we close we have to generate as much revenue as we can to offset continued costs. Given the payroll, the nearly 200 staff we employ, there are these existential ongoing costs that are not going to go away. We have to meet them.
“We’re being subsidised consistently more than we’re taking in. We have to do our part, rather than call on government, to generate more revenue. The hurricane has been a disrupting factor. Our focus is on dealing with the insurance claim that is going to be mounted soon.”
Mr Scott was unable to recall figures detailing the Grand Lucayan’s financial performance, including revenues, costs and losses, but said the resort pre-Dorian had been generating money and enjoyed “a couple of very good months”.
“Depending on the demand from first responders and third party market sources coming in to do work in Freeport, we may try to open some rooms in that building [Breaker’s Cay],” Mr Scott told Tribune Business. “Magnus Alnebeck at Pelican Bay is full.” Breaker’s Cay is currently home to the Royal Caribbean and World Central Kitchen post-Dorian feeding programmes.
The Government’s six-month fiscal “snapshot” for the period to end-December 2018 revealed that it had injected $45.4m into the Grand Lucayan over that period, including $13m to cover its operational costs. The latter sum will not be recovered by the purchase price.
Besides the initial $65m sale outlay, some $30m of which was paid by the closing, the Government also committed to paying former owner, Hutchison Whampoa, around $1.5m to cover losses incurred between the date their purchase agreement was signed and September 11. There are also the estimated $1m per month subsidies incurred to cover operating losses, and the payouts to departed line and management staff.
Mr Scott, meanwhile, added that the Government was moving to close the ITM/RoyalCaribbean purchase “as quickly as possible”, saying: “We’ve had some delays but have been having regular meetings. The legal and technical teams are interacting with each and it’s full steam ahead.”
Elsewhere, the Grand Bahama Chamber of Commerce’s president added his voice to private sector calls for Grand Bahama International Airport to be restored and re-opened to international flights as rapidly as possible.
Greg LaRoda said: “The last I heard was on November 15 they said they would be able to resume international flights. This was told to us in one of our NEMA (National Emergency Management Agency) update meetings.
“They are still trying to get temporary facilities sorted out. They also have to get the security equipment sorted out as well. They also have to get their ISPS (International Ship and Port Facility Security Code) standards up. This ISPS standard is very important for air travel, as it was a regulation put in place after the 9/11 attacks for all port facilities around the world. Fencing also has to be put back in place at the airport.
Asked whether a November 15 reopening for the airport is possible, Mr LaRoda said: “I think the November 15 date is doable if they push hard. The managers at the airport need to be communicating more to the public on what progress they are making, which is essentially the Grand Bahama Port Authority.”
Meanwhile, Carnival Cruise Line is resuming calls to Grand Bahama today when the Carnival Pride will dock in Freeport. The Carnival Elation will follow this Sunday, and the Carnival Freedom on Tuesday, October 15.
The Carnival Pride is expected to bring nearly 2,400 guests, with the cruise line expected to host 39 calls on Freeport - and bring a total of more than 100,000 visitors - between now and year-end. For the full year, Carnival said 400,000 guests will visit Grand Bahama aboard 10 different ships sailing from nine US home ports.
Senator Kwasi Thompson, minister of state for Grand Bahama, hailed Carnival’s return. “The rebuilding of Grand Bahama has begun,” he said in a statement. “We welcome the return of Carnival Cruise Line back to Grand Bahama after Hurricane Dorian. Carnival is an incredible partner for The Bahamas and Grand Bahama.”
“Carnival Cruise Line is proud to be such a big year-round supporter for cruise tourism to Freeport, so we are very excited to provide our guests the opportunity to again visit this popular destination,” said Terry Thornton, Carnival’s senior vice-president of nautical and port operations.
“Cruise ship visits are important to the local economy, and our shore excursion team has been working closely with local tour operators and has confirmed a variety of attractive onshore excursions for our guests.” More than 15 shore excursions will be offered.