‘Full steam ahead’ for Royal Caribbean on PI

• Regulators give Beach Club environmental go-ahead

• Cruise line hopes for early 2024 construction kick-off

• Working to value Gov’t stake; capital raise by year-end

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Royal Caribbean’s Bahamas chief has hailed as “a critical milestone” the environmental go-ahead for its Paradise Island beach club “that could benefit hundreds of businesses and tens of thousands of Bahamians”.

Philip Simon, the Royal Beach Club’s president and general manager for the cruise line’s Bahamas operations, told Tribune Business there “has never been any confusion” as to how important approval of its Environmental Impact Assessment (EIA) and related issues were to the $100m project’s ability to move forward.

He spoke after Dr Rhianna Nelly-Murphy, the Department of Environmental Planning and Protection’s (DEPP) director, affirmed in an August 15 letter to Jason Mayes, Royal Caribbean’s senior investments manager for private destinations, that the cruise line has “substantively addressed the environmental concerns” surrounding the western Paradise Island project and can move forward with submission of its Environmental Management Plan (EMP).

“The department is satisfied that Royal Caribbean International has substantively addressed the environmental concerns associated with the development of the Royal Beach Club at Paradise Island,” Dr Neely-Murphy wrote. “The DEPP is also satisfied that Royal Caribbean has demonstrated a high degree of of representation throughout the public consultation process and ensured that all key players were involved.

“In our review of the processes undertaken, in correlation with the final report, Royal Caribbean provided access to information, transparency, confidentiality of information and dedicated resources to achieve the goal of facilitating the public consultation requirements as ascribed by law.”

Branding Royal Caribbean’s report on the EIA public consultation as “thorough”, and containing “the necessary responses” to all questions that were raised, Dr Neely-Murphy said the DEPP “now closes” the consultation process. She added that the Government’s environmental watchdog “offers no objection” to the terms of reference, outlining the EMP’s scope, and that it now awaits this document’s submission by Royal Caribbean.

Mr Simon confirmed that the DEPP’s approval “takes us to the next step” of submitting the EMP and, following the agency’s review and hoped-for approval, a Certificate of Environmental Clearance (CEC) to confirm the Royal Beach Club has satisfactorily addressed all issues relating to this topic.

He acknowledged, though, that the CEC “does not negate” the need for Royal Caribbean to obtain the necessary permits and approvals from other government agencies given that it confirmed in its 169-page public consultation report that it has “not received approval from Town Planning” yet.

Still, Mr Simon told Tribune Business that while the environmental process “has taken a little longer than expected” the cruise line’s ultimate goal of having its 17-acre Royal Beach Club open by summer 2025 remains on schedule. He voiced optimism that Royal Caribbean will be in position to start construction on Paradise Island, beginning with site preparation and the demolition of existing structures, in the first or second quarter next year.

As for the Royal Beach Club’s economic impact, the cruise line’s Bahamas chief said its ambition to increase the number of passengers it brings to Nassau by 150 percent compared to pre-COVID levels - from one million per year to 2.5m by 2027 - will “no doubt” generate sufficient customers to ensure all businesses - as well as the Paradise Island destination - benefit.

“By 2027, we expect between 900,000 and one million guests will visit the Royal Beach Club each year. As a result, we would expect an annualised maximum daily capacity of [around] 2,750 guests per day. This translates to 171 guests per acre (assuming one acre is removed for back of house needs),” the cruise line said in a response to questions submitted as part of the EIA consultation.

That means 40 percent of the 2.5m passengers it plans to bring to Nassau in 2027 will go its its Paradise Island destination. Asserting that “everyone should benefit as that pie continues to grow”, Mr Simon explained that his reference to “hundreds of businesses and tens of thousands of Bahamians” benefiting from the Royal Beach Club alluded not only to spin-off opportunities involving the supply of goods and services but the opportunity for locals and the Government to collectively own a 49 percent equity stake in the project.

Besides the environmental aspects, he confirmed that Royal Caribbean has already initiated the process to value the four Crown Land acres that will be included in the overall 17-acre site. This valuation will be used to monetise the Government’s contribution in the project and determine the size of the equity stake it will hold via the National Investment Fund, the country’s sovereign wealth fund.

Once the value of the Government’s equity stake is determined, the balance of the collective 49 percent Bahamian interest in the Royal Beach Club that will be held by private investors can be calculated. That will then set the stage for the equity capital raise from Bahamian investors, with Mr Simon confirming that Royal Caribbean is still aiming for this offering to take place before year-end.

“That’s an ongoing process,” he affirmed of the Crown Land valuation. “We have had evaluators and surveyors working on that. We hope to complete that process in full very shortly and present that to the Government. We are very satisfied with the work done thus far.”

Mr Simon declined to be drawn on a timeline for completing the valuation, but added: “We understand how important that is to the economic model,” he added. “We have to ensure that we do things the right way, and that we’re not unduly taking our time doing that. We’re trying to that as expeditiously and efficiently as possible given the timelines are expected to potentially have the Beach Club open and operational by summer 2025.

“We are going to push as hard as we can, full steam ahead, to meet our goals and objectives.” Asked about how far efforts to structure the Bahamian capital raise have progressed, Mr Simon added: “We’re still aiming and pushing, and committed to keeping this timeline towards the end of the year. We are having rigorous conversations with potential stakeholders and partners in that regard.”

The Royal Beach Club’s local equity raise will be structured similar to that of the Nassau Cruise Port. In the latter, Bahamian investors acquired shares in an investment fund, the Bahamas Investment Fund, which hold the collective 49 percent equity interest in the Nassau Cruise Port on their behalf. This will likely be the model employed for the Royal Caribbean project.

Mr Simon described this equity model, where The Bahamas and Bahamians hold a collective 49 percent ownership interest in a tourism development alongside a major investor, as “just representing such a unique and tremendous opportunity”. He added: “If we get it right, it has the potential to be a wonderful model.”

Royal Caribbean, in answers submitted to questions posed as part of the EIA public consultation, confirmed: “Bahamians will have the opportunity to own equity in up to 49 percent of the Royal Beach Club at Paradise Island joint venture.

“That equity is made up of two parts: Equity that will be granted to the Bahamas National Investment Fund for the fair market value of the four acres of Crown land, and individual Bahamians will be invited to own equity through an investment fund that will be created for Bahamian investors.”

It added: “As an illustrative example, if the valuation of the Crown land is determined to be worth 9 percent of the value of the joint venture, then 40 percent of the total value of the joint venture’s equity will be made available to individual investors. The profits generated by the joint venture will be distributed to all equity partners (including the Bahamas National Investment Fund) based on their proportional share of equity in the total joint venture.

“As an illustrative example, if the Bahamas National Investment Fund owns 9 percent equity in the joint venture (in exchange for four acres of Crown land) it would receive 9 percent of the total profit available for distribution.”

The DEPP’s decision that Royal Caribbean has “substantively addressed” these concerns brings the investment opportunity for Bahamians one step closer to fruition. “It’s a critical milestone,” Mr Simon told Tribune Business of the DEPP go-ahead. “It’s been any number of months and, for some, even longer than that. This entire process, which again is a very important process for the company and the country, and of course it has gotten a lot of attention.....

“Royal Caribbean has been committed to this from the very beginning. There’s never been any confusion as to how important the environment and environmental protection is, and obviously the plans and policies relating to marine life and land use. This is a very important and critical milestone. It takes us to the next step, which is completion of the EMP and Certificate of Environmental Clearance approval.”

Mr Simon added: “Everything is moving ahead. Looking at the timelines, we are on schedule right now. The environmental process has taken a little longer than expected, but it has not impacted the overall timeline we have set for the project thus far.

“We’re almost at the beginning of where we can move into phase one, which involves the site preparation, demolition of existing structures and getting construction drawings so we can send our requests for proposals (RFPs). Hopefully we can commence construction in the first quarter or second quarter of next year.”

Asserting that Royal Caribbean plans to grow the cruise passenger market, rather than seize it all for itself, with only 40 percent of the 2.5m it brings to Nassau in 2027 visiting its Paradise Island destination, Mr Simon said: “The company has committed quite a lot of of its resources to the Bahamian market.

“Through the Royal Beach Club at Paradise Island, just a limited number of persons will experience that on an annual basis. The number of passengers coming to The Bahamas from the company will increase. We have ships that are on screen, bigger vessels, that will bring a greater number of visitors to our shores and there will be the need to have as many options as possible within the destination and other areas of Nassau and The Bahamas for them to experience.

“If we are all as stakeholders building a better product, offering more attractions and delivering greater service to our guests, as that pie continues to grow everyone should benefit from the oval.” Mr Simon said the ultimate goal is to create a “win-win-win” where Royal Caribbean, The Bahamas, its people and businesses, and the Government all benefit.

“It just represents such a unique and tremendous opportunity,” he added. “The potential benefit to out country.... that was the deciding factor for me, a model that could benefit hundreds of businesses and tens of thousands of Bahamians through the spin-offs and equity.”

Comments

JackArawak says...

And this could benefit tens of thousands of Bahamians LOL. I'm really sorry that we haven't heard anything from the government for Toby. Absolute shame. I know for sure that in Abaco the Americans and the Haitians get way more respect from the government than the Bahamians do, That's a fact. In that regard it's not a new day, just the same ol ting

Posted 21 August 2023, 8:40 a.m. Suggest removal

Sickened says...

I think that 10 thousands includes all of the family members of the few Bahamians that will be picking up towels, stacking chairs at night and washing the dishes etc. Grandparents, aunts and uncles, 1st & 2nd cousins and maybe even the guys at fish fry where the family may hang out.

Posted 21 August 2023, 9:33 a.m. Suggest removal

DonAnthony says...

Great news for Bahamians, great news for the Bahamas. A fantastic opportunity for Bahamians to leverage the expertise and business of RCI to get their share of the tourism wealth creation in the Bahamas. It’s about time.

Posted 21 August 2023, 11:12 a.m. Suggest removal

JokeyJack says...

Ever notice how every time Lucy tells Charlie Brown to go ahead and try kick the ball and she won't yank it away this time?

No Don. You have not. Cause you're running towards the ball again. OMG how many times will these two governments be able to fool Bahamians?
Like Jesus said in Mathew 18:22: ...7 times 70. And at 5 years each, that's nearly 2500 years.

They just finished building whole new docks for cruise ships with unfilled promise to fix Bay Street and now yall listening to bull again? Muddo.

Posted 21 August 2023, 12:27 p.m. Suggest removal

moncurcool says...

How many Bahamians will be able to sign the front of the check and not the back from this?

Posted 21 August 2023, 9:05 p.m. Suggest removal

TalRussell says...

.... Back @ Comrade Don Anthony, who got me, myself, thinking aloud about 'some local wealth creation' --- As to how, and if, there is still room on Royal Caribbean’s lavish '$100 million' Hog Island (HI) beach for accomating Comrade Toby and his Dog's (HI) more modest '$1 million' Lighthouse project. --- Yes?

Posted 21 August 2023, 12:02 p.m. Suggest removal

ExposedU2C says...

CIA test

Posted 21 August 2023, 4:53 p.m. Suggest removal

ExposedU2C says...

LOL

Posted 21 August 2023, 4:54 p.m. Suggest removal

BONEFISH says...

This project was going to approve by which ever party is in power. Whether it was the PLP or FNM. Most bahamians are blissfully unaware of certain aspects of the tourism industry.

Dionsio D'Aguilar said this when he was tourism minister. The big jump in tourism arrivals to the Bahamas since 1990 was through cruise arrivals. More visitors come to the Bahamas on cruise ships than by air. The cruise lines going forward will increasing exert their influence in this economy.

Posted 21 August 2023, 9:32 p.m. Suggest removal

ThisIsOurs says...

And Pamela Musgrove said about 5 years ago, ~*the model is wrong*. More tourists diminishing returns. It doesnt make sense.

Why is our infrastructure crumbling as tourism minister after tourism minister gets up to crow about cruise arrivals? It doesnt make sense. The model isnt working. The focus on body count hides the true picture

When you said most Bahamians are blissfully unaware of certain aspects of the tourism industry, I thought you were getting at the reason the project was approved, i.e. "*money and where it goes".... and it's not trickling down

I see they sell off Long Island too. We'll soon see another black token telling us how wonderful it will be for the local economy with 1 fire truck and a broken down "*regatta site*" more minimum wage jobs for us, yay (not knocking honest work, but where the billions going?"

Posted 22 August 2023, 3:48 a.m. Suggest removal

John says...

The cruise ships are getting bigger and bigger, growing in numbers, becoming more and more all inclusive and excluding Bahamians more and more from the lucrative cruise ship industry. As cruise line profits grow by leaps and bounds, Bahamians are finding it more and more difficult to sell even a t shirt to cruise ship passengers or even rent out a jet ski or a beach chair. And no one else to blame but our ‘silly and brainwashed ‘ government who has bought into the LIE that Bahamians don’t belong in this industry, except as servants . Yes sir massas! Truth an average of 10,000 cruise passengers in Nassau Port daily, every Nassau resident should not just be fully employed , but have opportunities to earn additional income. In fact what plans does this government have to increase its revenue as cruise ships overflow this country and its ports? They bring thousands of hotel rooms, hundreds of shops and casinos, entertainers and entertainment and all these amenities are serviced by foreign staff . Supplies are not purchased in The Bahamas and all they leave here is sewerage and garbage, basically. Cruises that include The Bahamas can sell from 65% to 100% more than other Caribbean cruises and The Bahamas and other Caribbean countries must actively and aggressively seek to get their fair share of tge mulit/-Billion dollar profits t this industry generates annually.

Posted 22 August 2023, 7:31 a.m. Suggest removal

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