I agree with one writer that Baha Mar needs to attract local, Bahamian guests first.
I lived on South Beach for forty-one years. I saw countless restaurants and hotels open with splashy marketing built around some famous sports star who was going to live their, or invest, or something. (In reality the sports star was given a condo for free, as long as he or she showed up at multiple opening parties. In reality, the sports stars wouldn't be caught dead living there.)
They were very (sometimes wildy) popular on Friday nights, but soon enough stood empty Sunday through Thursday.
They learned the hard way you must build your business around local sustainable trade, to at least break even and pay the bills. Then, and only then invest in heavy "star lives here" marketing to catch and keep the high end, movie star crowd.
I would say ninety percent never learned that lesson, and failed.
As I have written before, the only way for the Out Islands be be self-sustaining (I live on Eleuthera), is through tourism. Repeat tourism.
And tourism requires infrastructure, before all other government programs. Each island must supply consistent clean water, electricity, phone/DSL, and reasonable roads. Many other things are of great importance (police, health care facilities, etc.), but infrastructure comes first.
Then, and only then can all businesses, including tourism, grow every year.
Baha10 and several others are absolutely correct about the need to know everything about Baha Mar, including structural safety, and other issues not yet known to the public. As I stated yesterday, in another editorial on Baha Mar:
The full long-term economic impact of Baha Mar on The Bahamas will not be known, thus creating great uncertainty, until 100% of the "sealed" and "sensitive" documents relating to Baha Mar are fully revealed.
Uncertainty raises red flags with those evaluating Bahamas' financial situation.
100% must be released. And they will be eventually, anyway, voluntarily or through court action.
The longer delayed, the worse for the people of The Bahamas.
In conclusion, I do not want anyone to misinterpret or misconstrue the core of my comments:. I very much want Baha Mar to become profitable, and serve The Bahamas well. They have world class operators and may succeed. However, they are facing a long-term uphill battle. With an opening delayed too often and too long, and with constant problems with even the most basic infrastructure, they face an enormous challenge interesting the high-roller clientel required to make Baha Mar a viable and profitable business. But I sincerely hope they succeed.
As I stated before, the full long-term economic impact of Baha Mar on The Bahamas will not be known, thus creating great uncertainty, until 100% of the "sealed" and "sensitive" documents relating to Baha Mar are fully revealed.
Uncertainty raises red flags with those evaluating Bahamas' financial situation.
100% must be released. And they will be eventually, anyway, voluntarily or through court action.
The longer delayed, the worse for the people of The Bahamas.
The hidden costs to the people of the Bahamas to help Baha Mar to open were previously only mentioned briefly, as they may be now part of the yet-unsealed documents.
They include (or at least they did when reported about three months ago) $10 million per year for 'Infrastructure', and $10 million per year for 'marketing'.
Even with those two annual payments added as income to Baha Mar, the project cannot easily reach cash-flow-positive positive.
So the Bahamian Government will end up with those two liabilities (are they forever?), and no cash income from a resort, that because of it's debt load, can never reach true profitability.
Facts are facts, and the Government must accept them, and plan accordingly. Zero income, and at least $20 million per year of costs.
It is physically, fiscally impossible for Baha Mar to reach profitability while carrying a crushing debt-load of either 5, or 9 billion dollars.
The owner/operators could charge a $1,000.00 per night, for 100% of the rooms occupied 100% of the time, and still never reach not only cash-flow-positive income, but real profitability.
Simple really: do the math.
The Bahamian Government must realize analysts at Moody's, Standard and Poor's, Fitch, IMF and IDB can very well do the math, and they, our government, should plan accordingly.
I wrote: "What was meant was '..50% of available rooms..'."
I should have written:. "What the management meant was 'We hope to eventually have 50% of all available rooms occupied, including all our hotel brands at Baha Mar.', or similar.
As I previously wrote, Baha Mar must reach occupancy rates of about 65%, including all brands, to reach sustained profitability.
It is damaging to underestimate the understanding of the Bahamian people, and of even greater importance, the understanding of international lendors and financial rating agencies watching Baha Mar so closely, to state "..50% occupancy..". What was meant was '..50% of available rooms..'. If Baha Mar's operator actually meant "50%", then roughly 1,200 of the planned rooms are occupied. If so, great! Well on the way to that magic 65% of all available rooms occupancy all hotels must reach to break even.
And please: Baha Mar's management should not exclude separately branded sections of the hotel so that "50%" seems more believable. It is not. We all know there were between 2,200 to 2,400 rooms originally planned. (Depends what news release one refers to.)
Baha Mar can ill afford for further red flags to be waved by the world's financial observers.
Please, for honesty's sake, how many rooms in Baha Mar, regardless of brand, are actually available and how many occupied?
As I commented before, in U.S. courts, Izmirlian would indeed have something to stand on. Here, and I agreed with others, it may be very dicey.
What is most troubling is the sale -the final sale that has not actually happened, I think?- was conducted mostly 'in the dark' by Deloitte and Touch.
Legally, something is wrong.
In U.S. Izmirlian could, through proper courts and US Marshalls, have a chain put on Baha Mar's doors until the questionable 'sale' is worked out.
I saw that happen, right in front of my eyes, in Miami. All of a sudden, forty storey office tower full of mostly lawers, ended up with the front doors chained shut.
Believe me, they worked out a comromise very very fast indeed!
turtle777 says...
I agree with one writer that Baha Mar needs to attract local, Bahamian guests first.
I lived on South Beach for forty-one years. I saw countless restaurants and hotels open with splashy marketing built around some famous sports star who was going to live their, or invest, or something. (In reality the sports star was given a condo for free, as long as he or she showed up at multiple opening parties. In reality, the sports stars wouldn't be caught dead living there.)
They were very (sometimes wildy) popular on Friday nights, but soon enough stood empty Sunday through Thursday.
They learned the hard way you must build your business around local sustainable trade, to at least break even and pay the bills. Then, and only then invest in heavy "star lives here" marketing to catch and keep the high end, movie star crowd.
I would say ninety percent never learned that lesson, and failed.
Sad, but lessons must be learned.
Tom Rickards
On Baha Mar occupancy numbers ‘kind of low’
Posted 3 November 2017, 10:48 a.m. Suggest removal
turtle777 says...
As I have written before, the only way for the Out Islands be be self-sustaining (I live on Eleuthera), is through tourism. Repeat tourism.
And tourism requires infrastructure, before all other government programs. Each island must supply consistent clean water, electricity, phone/DSL, and reasonable roads. Many other things are of great importance (police, health care facilities, etc.), but infrastructure comes first.
Then, and only then can all businesses, including tourism, grow every year.
TR
On Small Family Island model ‘unsustainable’
Posted 14 September 2017, 10:06 a.m. Suggest removal
turtle777 says...
Baha10 and several others are absolutely correct about the need to know everything about Baha Mar, including structural safety, and other issues not yet known to the public. As I stated yesterday, in another editorial on Baha Mar:
The full long-term economic impact of Baha Mar on The Bahamas will not be known, thus creating great uncertainty, until 100% of the "sealed" and "sensitive" documents relating to Baha Mar are fully revealed.
Uncertainty raises red flags with those evaluating Bahamas' financial situation.
100% must be released. And they will be eventually, anyway, voluntarily or through court action.
The longer delayed, the worse for the people of The Bahamas.
In conclusion, I do not want anyone to misinterpret or misconstrue the core of my comments:. I very much want Baha Mar to become profitable, and serve The Bahamas well. They have world class operators and may succeed. However, they are facing a long-term uphill battle. With an opening delayed too often and too long, and with constant problems with even the most basic infrastructure, they face an enormous challenge interesting the high-roller clientel required to make Baha Mar a viable and profitable business. But I sincerely hope they succeed.
TR
On ‘Unacceptable’ that Baha Mar closed doors to guests in storm
Posted 12 September 2017, 10:08 a.m. Suggest removal
turtle777 says...
As I stated before, the full long-term economic impact of Baha Mar on The Bahamas will not be known, thus creating great uncertainty, until 100% of the "sealed" and "sensitive" documents relating to Baha Mar are fully revealed.
Uncertainty raises red flags with those evaluating Bahamas' financial situation.
100% must be released. And they will be eventually, anyway, voluntarily or through court action.
The longer delayed, the worse for the people of The Bahamas.
TR
On EDITORIAL: The final destruction of Baha Mar
Posted 11 September 2017, 11:39 a.m. Suggest removal
turtle777 says...
The hidden costs to the people of the Bahamas to help Baha Mar to open were previously only mentioned briefly, as they may be now part of the yet-unsealed documents.
They include (or at least they did when reported about three months ago) $10 million per year for 'Infrastructure', and $10 million per year for 'marketing'.
Even with those two annual payments added as income to Baha Mar, the project cannot easily reach cash-flow-positive positive.
So the Bahamian Government will end up with those two liabilities (are they forever?), and no cash income from a resort, that because of it's debt load, can never reach true profitability.
Facts are facts, and the Government must accept them, and plan accordingly. Zero income, and at least $20 million per year of costs.
TR
On Liquidators disclose no adverse Sarkis findings
Posted 1 September 2017, 12:16 p.m. Suggest removal
turtle777 says...
It is physically, fiscally impossible for Baha Mar to reach profitability while carrying a crushing debt-load of either 5, or 9 billion dollars.
The owner/operators could charge a $1,000.00 per night, for 100% of the rooms occupied 100% of the time, and still never reach not only cash-flow-positive income, but real profitability.
Simple really: do the math.
The Bahamian Government must realize analysts at Moody's, Standard and Poor's, Fitch, IMF and IDB can very well do the math, and they, our government, should plan accordingly.
On Liquidators disclose no adverse Sarkis findings
Posted 31 August 2017, 1:50 p.m. Suggest removal
turtle777 says...
Precisely correct. If steps are not followed, a down-grade is inevitable.
On EDITORIAL: Two pathways to Bahamas Recovery, Government Austerity, Economic Stimulus
Posted 30 August 2017, 8:44 a.m. Suggest removal
turtle777 says...
I would like to clarify my post on August 15th.
I wrote: "What was meant was '..50% of available rooms..'."
I should have written:. "What the management meant was 'We hope to eventually have 50% of all available rooms occupied, including all our hotel brands at Baha Mar.', or similar.
As I previously wrote, Baha Mar must reach occupancy rates of about 65%, including all brands, to reach sustained profitability.
rickards.
On Baha Mar occupancy at 50 percent and growing
Posted 17 August 2017, 7:20 a.m. Suggest removal
turtle777 says...
It is damaging to underestimate the understanding of the Bahamian people, and of even greater importance, the understanding of international lendors and financial rating agencies watching Baha Mar so closely, to state "..50% occupancy..". What was meant was '..50% of available rooms..'. If Baha Mar's operator actually meant "50%", then roughly 1,200 of the planned rooms are occupied. If so, great! Well on the way to that magic 65% of all available rooms occupancy all hotels must reach to break even.
And please: Baha Mar's management should not exclude separately branded sections of the hotel so that "50%" seems more believable. It is not. We all know there were between 2,200 to 2,400 rooms originally planned. (Depends what news release one refers to.)
Baha Mar can ill afford for further red flags to be waved by the world's financial observers.
Please, for honesty's sake, how many rooms in Baha Mar, regardless of brand, are actually available and how many occupied?
A simple question gentlemen.
Tom Rickards
Windemere
On Baha Mar occupancy at 50 percent and growing
Posted 15 August 2017, 2:14 p.m. Suggest removal
turtle777 says...
As I commented before, in U.S. courts, Izmirlian would indeed have something to stand on. Here, and I agreed with others, it may be very dicey.
What is most troubling is the sale -the final sale that has not actually happened, I think?- was conducted mostly 'in the dark' by Deloitte and Touch.
Legally, something is wrong.
In U.S. Izmirlian could, through proper courts and US Marshalls, have a chain put on Baha Mar's doors until the questionable 'sale' is worked out.
I saw that happen, right in front of my eyes, in Miami. All of a sudden, forty storey office tower full of mostly lawers, ended up with the front doors chained shut.
Believe me, they worked out a comromise very very fast indeed!
rickards
On Bad advice for Sarkis on Baha Mar
Posted 29 June 2017, 7:24 a.m. Suggest removal