Govt to decide Grand Lucayan return ‘shortly’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Minnis Cabinet will decide “very shortly” whether to act on the Grand Lucayan Board’s plan to re-open the resort on February 1, a Cabinet minister revealed yesterday.

Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that the government was “still analysing” the costs associated with opening Freeport’s so-called ‘anchor property’ and disclosed that yesterday’s US move to impose a quarantine requirement on all incoming travellers (see other article on Page 1B) may factor into the decision.

Speaking after this newspaper was informed that the government will have the final say on the resort’s proposed re-opening, given that millions of taxpayer dollars will be at stake, Mr D’Aguilar confirmed that the final decision has been taken out of the Board’s hands.

“It’s Cabinet and we’ll be making a decision on that very shortly,” he told this newspaper. “We’re still analysing what the costs are to re-open before we come to a conclusion.”

Conceding that the Biden administration’s new COVID-19 travel and health policies may influence any decision, Mr D’Aguilar said: “We’re still digesting all this information, so we will put that in the pot and see what comes out. We’ll have to evaluate this move in light of what decisions we have to make.”

His comments came as the government still assesses the findings of a report by the KPMG accounting firm into whether the current terms of the ITM Group/Royal Caribbean deal to acquire the Grand Lucayan are sufficiently beneficial to the Bahamian economy and people. Informed sources, speaking on condition of anonymity, suggested the findings are “not favourable”.

Bahamian taxpayers, via the Public Treasury, have already injected over $100m into the Grand Lucayan - including the $65m purchase price - since the government acquired the property from Hutchison Whampoa’s real estate arm in 2018. And there are fears that simply re-opening the resort, in the absence of airlift, a marketing plan and operator, will simply inflict more losses.

The Minnis administration is likely becoming desperate to get the loss-making resort off its and the taxpayer’s books, given the staff termination package, subsidies to cover operating losses and other expenses it has incurred over the past two years. Philip Davis, the opposition’s leader, recently argued that the total cost to taxpayers was likely to be around $150m.

The government believed it had found the correct buyer to revive the Grand Lucayan, and Freeport’s wider tourism industry and economy, in the shape of Royal Caribbean/ITM Group’s joint venture partnership, Holistica. However, those hopes quickly foundered on the COVID-19 rock, with the joint venture subsequently using the pandemic to water down the deal’s terms to their advantage.

Other observers, though, have argued that the Government has little choice but to stay the course with RoyalCaribbean/ITM as the pool of alternative buyers willing to offer a reasonable price and terms will have shrunk considerably due to COVID-19.

While acknowledging that it was better for Freeport’s ‘anchor resort’ to be open than closed, Magnus Alnebeck, the nearby Pelican Bay resort’s general manager, voiced fears in late December that its Lighthouse Point property will “just stand there because no one is coming” and cause “a big expense” for taxpayers.

“By itself it’s not going to bring any guests,” Mr Alnebeck said of the planned re-opening. “Grand Bahama has really been closed to the tourist market for almost four years since Hurricane Matthew. It’s a bit better that the hotel is open than closed, but opening by itself is not going to solve the problem. Having an open hotel with no guests is not the solution.

“It needs to open with the right operator and right product so there’s demand for it, there needs to be a marketing programme in place and, what is really important, is that full airlift is in place. It’s good that they’re going to open, but they need to open it right as opposed to saying let’s open it and see, especially if people are going to a destination that’s been closed down for four years more or less.

“It’s really three legs that are needed to open the hotel. The first is having an attractive product consumers like, and second, they need to market so people understand it’s open. Then you need to have the airlift and boat lift so people can get to Grand Bahama otherwise it’s just going to end up costing you money.”

Mr Alnebeck said that if an operator, marketing initiative and air/sea lift for the Grand Lucayan were in place “they haven’t been announced yet”. He added: “What would have made sense to me would be to get an operator like Sunwing or someone who knows what they’re doing, come in with airlift and a marketing plan, and get the numbers to work.

“Otherwise the danger is that the hotel opens at a big expense but it just stands there because no one is coming. It needs to be combined with a serious airlift programme and serious marketing plan. All the airlift we have for Grand Bahama at the moment is one American Airlines flight per day from Miami, Silver from Fort Lauderdale five days a week, and whatever Bahamasair flies.

The Pelican Bay chief estimated that Grand Bahama is presently averaging around 100 daily air arrivals on five days per week - a figure that is far below the numbers necessary to sustain the Grand Lucayan and other properties that are more reliant on leisure guests than his hotel.

Comments

bahamianson says...

OOPS, we didn't factor in that Biden was destroy our tourism. That shortly will now be a longly.

Posted 22 January 2021, 10:58 a.m. Suggest removal

proudloudandfnm says...

Biden is not destroying tourism. He is fighting a pandemic. Something trump refused to do. And FYI tourism died under trump.

Posted 22 January 2021, 1:24 p.m. Suggest removal

JokeyJack says...

LOL. Luckily your comment is protected by a government ban on "disinformation" both here and abroad. You are not at all concerned that there is only ONE doctor in the entire world who understands viruses? Dr. Fauci?

Woe be unto anyone who questions his perfect God-like knowledge? You don't have any suspicion that "scientific facts" have to be protected by the force of law rather than simply the force of their natural truth? Do you need a law to tell you that the sky is blue?

Posted 22 January 2021, 2:21 p.m. Suggest removal

K4C says...

Apparently you suffer from CNN poisoning

Posted 23 January 2021, 7:28 a.m. Suggest removal

birdiestrachan says...

The Government should not have brought and paid severance pay in the first place.
If Hutchison could not sell the Our Lucaya what made them think they could sell it.

Mr: Kawzi Thompson who can never speak truth said the keys would be turned over at the end of the year. then he said he hoped.

The other lie they were opening in February.

The restrictions of the US Government and the Bahamian Government on COVID 19 are
just about the same.

The vaccine will make a difference and will help to get the world back into some kind of normalicey

Posted 22 January 2021, 2:18 p.m. Suggest removal

JokeyJack says...

The vaccine will do nothing. The CDC will reduce the magnification cycles count on the testing, and will stop paying hospitals to write Covid on the death certificates. Magically cases will drop and deaths will drop. This will happen after Biden signs all the new trade agreements with China, not before. You may recall that the CDC is an "independent" agency and did not answer to Trump. Well, they don't answer to Biden either my friend.

Remember when Trump said hospitals have to send their stats to HHS instead of CDC? Nothing changed. Media kept reporting (and still does) figures from Johns Hopkins University. LOL. No change whatsoever.

Posted 22 January 2021, 2:24 p.m. Suggest removal

tribanon says...

Aahh yes, the $160 million ($160,000,000) Grand Lucayan debacle that Minnis personally saddled all Bahamian taxpayers' with. Right now our country sure could use the mega millions of dollars that Minnis so foolishly had government squander in buying that hotel property.

Posted 23 January 2021, 2:19 p.m. Suggest removal

donald says...

Government should get out of all private business, hotels, airlines, phone, cable, banks. When will we learn???

Posted 23 January 2021, 3:52 p.m. Suggest removal

TalRussell says...

**From day one** what has been claimed to be **the process in place** that was used in the purchase, operating, and closing down of the Grand Lucayan Hotel, **never existed.** More like an **OBAN 11.**
And, in terms of what's really unfolded the last 72-hours over the purported sale of the Grand Lucayan Hotel as is being laid out before the PopoulacesOrdinary at large - **simply isn't true.** The whole scamming of the PopoulacesPurse affair to buy votes blunder has been directed straight out of the office of the prime minister.
This all started going astray when the Seller, packed up and trucked away all the hotel's cases and opened rolls of toilet papers. **Shakehead** a quick once for Upyeahvote, twice for Not?

Posted 23 January 2021, 6:41 p.m. Suggest removal

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