The Tribune

By NEIL HARTNELL Tribune Business Editor WHILE occupancies at Baha Mar's two existing Cable Beach resorts are trending 3-4 per cent ahead of 2012 forecasts, the resort developer yesterday said they had yet to reach "levels considered acceptable", following declines of up to 10-15 per cent at the recession's peak. Robert Sands, Baha Mar's senior vice-president of external and government affairs, told Tribune Business that increasing growth in the group business segment - a trend being seen across the Bahamian hotel industry - was likely the primary reason why the Sheraton Nassau Beach Resort & Casino and Wyndham Nassau Resort were performing slightly ahead of 2012 forecasts. As for progress on Baha Mar's $2.6 billion Cable Beach redevelopment, Mr Sands said the developer was "very confident" that its main construction partner, China State Construction, would hit the July target to have the main casino hotel some 100 feet above grade level. This is a key trigger threshold as per the Heads of Agreement with the Government. And, by year-end, Baha Mar is expecting to have awarded more than 75 per cent of the $400 million in construction contracts reserved exclusively for Bahamian contractors, having created over 1,500 Bahamian construction jobs to-date. "We've started strongly compared to recent years," Mr Sands told Tribune Business of the Sheraton and Wyndham's early 2012 performance, "and are currently trending ahead of occupancy forecast levels, by about 3-4 per cent. "It's still early days, and we'll see how it all of this pans out. Those increases are coming off less than satisfactory results over the last three-four years. "Even though there's been an improvement in occupancies and revenues, it's not to where we want it to be. They're going in the right direction, but it's fair to say they've been off by as much as 10-15 percentage points. "We've gained some of that back over the last couple of years, but even though we're showing improvement, we're not back to levels considered acceptable." In common with Atlantis and other Bahamian resorts for whom conventions and conferences comprise a significant part of their occupancy book, Baha Mar's Sheraton and Wyndham properties have seen the group business volume rebound that began in 2011 continue into 2012. "It's slowly coming back, and last year actually, and this year's forecasts, are showing growth. It's beginning to plough itself back," Mr Sands said. "The group bookings are encouraging compared to last year. They're part of the reason for the percentage improvement, and could be the primary reason. "The environment is still sluggish, and it's taking a long time for us to get back to the levels of three-four years ago." The Baha Mar executive said the $100 million improvements already made to the Cable Beach strip, including the re-routed roads, and re-located Craft Market and Commercial Village, were already having "a positive impact" on the guest experience at the Sheraton and Wyndham. The developer was also working to minimise the impact on the two existing resorts from the nearby construction. "There's no question in my mind that it will have an impact, but we're doing everything in our power to mitigate and insulate the properties from external construction," Mr Sands added. "It's to a lesser degree at the Sheraton, but there will be a higher impact at the Wyndham property." To-date, Chinese construction workers brought in to work on the $2.6 billion project's core number in the 400's. Pilings for the core casino/hotel are in the ground, and construction is already at 20 foot above grade level, Mr Sands said. "We have a milestone to be 100 feet above grade level round about July 2012," he told Tribune Business. "That ties to a number of trigger points in terms of certain actions that we can take, and concessions and other things as per the Heads of Agreement. We are very confident we will meet that." Total construction spend on the $2.6 billion Cable Beach redevelopment will hit $831 million in 2012, some $625 million of that being the Chinese component, and $206 million worth of contracts going to Bahamians. Combining that with the $90-$100 million already awarded, and Baha Mar will be over three-quarters of the way towards its goal of handing $400 million in contracts to Bahamian contractors. Pledging that construction efforts would ramp up during the 2012 first quarter, Mr Sands added: "We're close to the 1,500 mark in terms of employment opportunities created to-date for Bahamians in one year, and we still have three years to go to meet the 4,000 threshold. "There's no question in my mind that Baha Mar has had a positive impact on the construction sector in the last 12-15 months, and we will continue to see that."