The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Electricity costs for Exuma resorts are “almost double” those faced by Nassau hotels on a per room basis, a Cabinet Minister identifying a host of infrastructure challenges as preventing the island from reaching its full economic potential.

Fred Mitchell, minister of foreign affairs and immigration, standing in for Cabinet colleague Obie Wilchcombe at the Exuma Business Outlook Conference, said the island had enjoyed 60 per cent growth in stopover visitors over the past two years.

But to achieve sustainable economic growth and development, Mr Mitchell said Exuma needed to address a host of issues, such as developing a trained local workforce, airlift, an improved airport and road transportation, and better landscaping and cleanliness.

And he also challenged those who believe large scale resorts, such as Sandals Emerald Bay, were too big to be supported by Family Island communities, questioning how else the Bahamas was going to create diversified growth.

Again identifying utility costs as a key impediment to Bahamian economic growth, in a likely reference to Sandals Emerald Bay, Mr Mitchell said: “The data examined by the Ministry of Tourism with one major resort show that although Nassau’s utilities, especially electricity costs, remain among the highest within the region, Great Exuma’s costs almost double those of Nassau on a per room, per night basis.

“This, ladies and gentleman, simply cannot be absorbed and sustained. Reflecting these exorbitant costs as a further premium to be charged for a vacation in Exuma will negate the sale. The customer will simply choose to go elsewhere.”

Pointing out that Exuma needed trained workers in sufficient numbers to support the island’s current - and future - economic development, Mr Mitchell added: “This is critical since the necessary importation of workers comes at great cost that contributes to the employer’s already very high operating cost and, by extension, operating losses.”

Turning to the quality of visitor experiences, Mr Mitchell said that while Exuma was starting to receive jet service, the Bahamas “still has a long way to go in causing for sufficient reach and frequency in airlift, along with competitive air cost”.

Noting that airlift had to match demand or business would be lost, the Minister said the recent Katie Couric interview with celebrity judge, Judith Sheindlin, on her vacation in the Exuma Cays was worth $158,000 in free publicity, having been seen by five million viewers.

Mr Mitchell also called for more off-resort campus dining options for visitors, expressing hope that the now-closed Castaways restaurant would re-emerge with the rebranding and relaunching of the Exuma Cays.

“Exuma joins with Bimini to be the two Family Islands that are responsible for the growth in overnight visitors,” Mr Mitchell said.

“Today, visitor arrivals in the Exumas remain under 40,000, reflecting a rebound from some 21,600 stopovers in 2009 - the year the Four Seasons resort closed - to 33,700 two years later.

“This increase follows the reopening of the Emerald Bay property under the Sandals brand in 2011, marking a 60 per cent growth rate in the past two years.”

Acknowledging the $80 million-plus investment made by Sandals in the resort, Mr Mitchell acknowledged that the previous owners, operating under the Four Seasons brand, had incurred recurring losses that drove the property into receivership - which was where Gordon ‘Butch’ Stewart found it.

“The Ministry of Tourism is aware that there are some in Exuma who believe we ought not to have encouraged large resorts like Emerald Bay, and/or even projects like Grand Isle in the Exumas or in any other Family Island,” Mr Mitchell said.

“There is a belief that these types of developments are too big and cannot be supported in communities outside of Nassau, and perhaps Grand Bahama.

“But we must ask of those who promote or subscribe to this, then, how are we to truly grow our economy or ensure that all Bahamians have access to employment by way of jobs and/or opportunities to create and own businesses, without having to leave behind family and homes in search of employment opportunities elsewhere?”

The Minister also called upon the Bahamas to reduce the ‘80 cents out of every $1’ tourism dollar spent leakage by establishing better links between tourism and other sectors.

And he agreed that the main solution to the Bahamas’ economic woes was swift economic expansion driven by the private sector, and “out of necessity, foreign direct investment”.