The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Developers are “kidding themselves” if they think Family Islands can sustain resorts larger than 75 rooms, a leading Bahamian hotel executive urging such properties to “tie” into an island`s special attractions.

Robert Sands, addressing the HVS Caribbean Hotel Investment Conference & Operations Summit (CHICOS) conference, said between 25-75 rooms was the maximum size Family Island boutique hotels should aspire to.

Baha Mars senior vice-president of government and external affairs said that outside of Grand Bahama and Abaco, visitor demand, airlift, and the islands infrastructure and local population would be unable to support larger resorts.

“I think 25-75 rooms maximum,” Mr Sands replied, when asked about the ideal template for Family Island resort development. “I think you`re kidding yourself in terms of local support for the facility and airlift” if you build larger properties.

“The dynamics of a facility larger than a 75-room hotel...... other than going to Abaco and Grand Bahama, boutique size is critical,” he added. “The demand flow must be really clearly evident for you to make (larger resorts) work.”

Mr Sands has thus become the latest voice in the debate over how Family Island development should go forward. Many observers believe niche, boutique resorts that match the size of island economies, and their infrastructure and populations, are the way to go, rather than looking at New Providence-style mega resorts.

To ensure the success of boutique Family Island properties, Mr Sands said they should link with attractions specific to their island, and which make the destination stand out in the marketplace.

“You have to match it with the particular market elements of a particular island,” he said. “Tie in some of those elements, such as bonefishing. There has to be a lot of ability to match the competitive elements of these islands with boutique hotel facilities.”

Khaalis Rolle, minister of state for investments, who was a panellist with Mr Sands in the HVS Chicos session on the Bahamas` investment outlook, said there was often a “fine line” between success and failure when it came to selecting Family Island resort development models.

He acknowledged that the anchor property model championed initially by both the Ingraham and Christie administrations for the Family Islands had not always worked, citing the example of Emerald Bay when it was under the Four Seasons brand.

“It really depends on the carrying capacity of the Family Islands,” Mr Rolle said. “Some islands are able to accommodate more, and there`s a fine line as to the choice of top-level carrying capacity, and whether a boutique or brand would work.

“Weve seen the experience of Four Seasons in Exuma. The model did not work. The model fit was more than the carrying capacity of Exuma.” While Emerald Bays new owner, Sandals, had a “greater opportunity” to succeed because of its all-inclusive pricing structure, Mr Rolle said the property still had to be matched to airlift and demand.

In his earlier comments to the HVS Chicos session, Mr Rolle said that during his 2002-2007 term in office, Prime Minister Perry Christie had seen so-called anchor projects as the only way to develop the Family Islands. These projects were seen as creating a base for increased economic activity and entrepreneurial spin-offs, and the minister said they had “a measurable effect on many of the Family Islands”.

Many, though, believe the mega anchor property strategy has failed to deliver the promised results, in some instances changing the character of Family Islands - the very things that attracted tourists there in the first place.

Meanwhile, Bahamian hoteliers argued that the $2.6 billion Baha Mar redevelopment would provide a spin-off stimulus for Family Island resorts and economies, helping to attract “two-stay vacationers” who stayed in the Bahamas longer and spent more money.

And they urged the Government to replicate the quasi public-private structure pioneered for the $409.5 million Lynden Pindling International Airport (LPIA) upgrade at all other Bahamian airports, removing the burden on the Treasury by bringing in private sector management and capital.

Mr Sands said visitor demand for a Bahamian vacation had traditionally been determined by “two-and-a-half hours” flying time from this nation, restricting the visitor market largely to the US east coast.

However, Baha Mar`s development and Atlantiss continued success “was causing us to look further afield” in a bid to fill the more than 2,000-room increase in New Providences inventory come 2014, when the former project came on stream.

Not only was the Bahamas` marketing pushing into the US mid-West, Mr Sands said, but it was also targeting Europe, Latin and South America. Given that visitors from these markets would travel longer to get here, they would also likely stay longer and spend more money, and potentially be attracted to island hopping in the Family Islands.

“That new traveller is going to want to experience New Providence, but also experience the Family Islands,” Mr Sands said. “Were going to have the ability to expand the two-stay vacationer coming from longer distances. Theyre into cosmopolitan islands, but will also want the tranquility and beauty of the Family Islands.

“Attracting new tourists from further afield will cause a direct stimulus for the Family Islands, changing the type of visitor from a getaway to a real island-hopping individual.”

Frank Comito, executive vice-president of the Bahamas Hotel Association (BHA), another HVS Chicos panellist, said the new Marsh Harbour International Airport terminal was scheduled for completion next year, while its runway had already been extended. Cat Island was being targeted for airport upgrades, while Bimini was “�n the drawing stage”.

Acknowledging that it was “essential” that airports were up to standard to attract Family Island airlift, Mr Comito said the basic infrastructure now in place was being worked on and improved.

“Nassau Airport Development Company is a model wed like to see extended to Family Island airports,” he said. “Theres a quasi structure, and a private contracted manager, NAD, was able to raise $409.5 million at the depths of the recession.

“Taking that private model into Exuma, Eleuthera, would take the burden off the Government having to find capital to build and invest in these airports. Making it a more entrepreneurial airport, like NAD, would spur further growth for those islands.”

Mr Rolle said the Family Islands were “a major priority” for the Government, given that “to get the Bahamas where it needs to be, we need balanced development”. Joking that every second word uttered by Obie Wilchcombe, minister of tourism, was airlift, he added: “Government has to ensure access to the Family Islands is a lot better.”

David Kosoy, chairman of the Nassau-based Sterling Financial Group, said sustainable economic development of the Family Islands would be good social policy for the Bahamas, as it would likely encourage many Bahamians to move back home and relieve overcrowding and congestion on New Providence.

Agreeing that Baha Mar could attract visitors who later became buyers of Bahamian second homes and Family Island real estate, Mr Kosoy said there was room for both boutique and branded hotels in the Out Islands.

He added, though, that more Family Island resorts would be of the niche. boutique type such as Pink Sands and Coral Sands on Harbour Islands.

“That`s where the future is for the Family Islands, and people going to the Family Islands will not want to be going to the Hilton in Eleuthera or something like that,” Mr Kosoy said. “You will have high-end tourists in the Family Islands with longer stays. Eleuthera has 75 per cent occupancy, which is pretty good on an annual basis.”