By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian developer is urging tourism to adopt the “small lateral development” model that has enabled his resort group to “grow revenues and profits by 400 percent” over a ten-year period.

Ben Simmons told Tribune Business that the expansion of his Little Island Hotels group, now three properties strong with plans for a fourth well underway, is proof that this concept - and moving away from the “single intensive development” strategy - offers a more sustainable, environmentally-friendly model for hotel and tourism growth especially in the Family Islands.

Instead of developers placing “all their eggs in one basket” through investing huge sums of money into just one project, with the likelihood they will never generate the targeted returns, he urged that they and The Bahamas adopt a development model that spreads their investment through multiple islands and properties.

While his group is now one of North Eleuthera’s and Harbour Island’s major employers, with staff levels expanding ten-fold to 150 since its first property opened ten years ago, Mr Simmons told this newspaper that Little Island Hotels’ growth has been achieved “without taking a single concession from the Government” in the form of tax breaks and other incentives.

And, with the group’s third boutique resort, The Farm, focused on agri-tourism and hydroponic and aquaponic growing techniques, he revealed that Little Island Hotels has slashed its food costs by 18-20 percent across all properties through growing its own produce.

Mr Simmons, who also operates Ocean View and The Other Side resorts on Harbour Island and mainland Eleuthera, argued that the development model he is pursuing is more resilient and better suited to “ride out” global economic shocks such as the continuing confidence-damaging uncertainty caused by Donald Trump’s trade and tariff policies.

He also suggested that Little Island Hotels’ growth has been at a pace the local community can match and absorb rather than outstripping its capacity to provide the necessary workforce and supplies/resources the group requires. This, Mr Simmons said, had also made it easier for employees to stay with the business and progress from entry-level jobs to “senior posts”.

“One of the things I spoke about at the recent [Harbour Island] Business Outlook is sustainable tourism with an agricultural component, and an eco-sensitive approach to tourism, are more likely to withstand economic contractions or any environmental shocks,” he told Tribune Business. “When you are a small-based business it’s easier to ride these things out.

“I was advocating or sharing that we look at this as the future for our development. So, similar to what we’re doing with Little Island Hotels, it’s an example of small lateral development rather than single intensive development.

“Let’s say you’re going to put a $20m investment into the country. Why are you putting all that energy and effort into one spot as opposed to investing more laterally across The Bahamas. Your eggs are then not in one basket. That takes a bit of know how, but intensive development takes a skill set and more capital development than the original investment that was sent in.”

Mr Simmons’ argument is that resort investors/developers should diversify their investments and activities across multiple Bahamian islands with involvement in more than one small, boutique resort. This, he said, would be both less risky and more beneficial to the Bahamian communities that host such projects rather than attempting to pull-off a single mega resort that is out of scale and character with the Family Islands.

The Bahamas is littered with so-called ‘anchor projects’ that have either been abandoned or closed by the developer. These sites often remained tied-up in disputes and litigation with the financiers for years, as the sheer expense tied up with the necessary infrastructure investments and other ‘sunken’ costs makes it impossible to earn an investment return, generate cash flow and service debt funding.

For these very reason, it is often the second or third purchasers of Bahamian resort developments or properties that often earn the returns because they are able to acquire such assets at low or significantly discounted entry prices. One example of such a price was Exuma’s Emerald Bay resort, which Sandals purchased for around $25m-$30m, when the Japanese insurer holding it had been trying to recover $130m.

“With Little Island Hotels, we’ve completed three hotels, are about to start on the fourth, and want to do five, six, seven,” Mr Simmons told this newspaper, asserting that the group’s success to-date serves as “proof of concept” and that such a development model works.

“We’re one of the largest employers in the community, starting with 15 and going to 150 between the three properties. You’re looking at a ten-fold increase in employment over ten years. There’s other projects that have been around that long and have not got there. They’re trying to build one thing and there’s still a lot to do.

“In the same timeframe, we have enjoyed a ten-fold increase in employment, and from a revenue and profit standpoint they’ve increased by 400 percent. We give back to the community with donations on a huge level. One percent of our top line is reinvested in education within the community,” he added.

“We allow people to grow with us and grow to the senior ranks, and because we are a smaller operator and formulaic to a certain degree it makes it easier to train people to occupy management roles. Whereas if you try to build a company with 300 employees in one go it’s going to take tremendous expertise.

“We’re trying to make the argument that this style of development is better for the country in the long-run and, if we can do it in Eleuthera we can do it elsewhere and maybe the Government needs to look closely at it. We’ve done it without a single concession from the Government. It’s not cost the Government anything.”

Kerry Fountain, the Bahama Out Island Promotion Board’s executive director, recently told Tribune Business he was encouraging member hotels to follow Mr Simmons’ lead with The Farm and grow some of their own food “to cut down on what we import from the US” given the Trump trade and tariff upheaval.

“What we’re trying to encourage our hotel members to do is how we can create greater linkages with our farmers and purchase from them some of the goods they consume on an annual basis,” Mr Fountain added. Mr Simmons said the Little Island Hotels group was again proof that such initiatives can work especially given current inflationary pressures and the high cost of living.

“By adding the agricultural component we’ve been able to reduce food costs across all businesses by 18-20 percent,” he told Tribune Business. “All of these things combined make for a more robust business model. We only expand when we have the revenues to do so, so it’s tethered to when the workforce is available and makes for a more robust operation.

“While we have not taken the concessions, it would be nice to know we’re supported by the Government and this form of development, they’re advocating for it and want to see it succeed, and more people are likely to embrace it.”

Mr Simmons said Little Island Hotels’ fourth property will be constructed on land that was formerly part of The Current Club, which was demolished by Hurricane Andrew in 1992. Construction of what is anticipated to be a 22-room property will likely take 18 months, once all permits and approvals are obtained, and another 20-30 jobs will be created to take the group’s total workforce to 180.

With all relevant submissions made to the Department of Environmental Planning and Protection (DEPP), Mr Simmons said he is now simply waiting for “the green light” and to “make sure we do it right” in terms of whether any Environmental Impact Assessment (EIA), Environmental Management Plan (EMP) and public consultation is first required.

Pledging “to go from there” once The Current is completed, he added of further expansion: “Who knows? Hatchet Bay, Governor’s Harbour, other islands.. Who knows?”