The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar has emphatically rejected concerns that it will “cannibalise” Atlantis’s room rates and labour market when it opens in 2015, a senior executive telling Tribune Business the project would increase the Bahamas’ GDP by “at least 10 per cent” that year.

Robert Sands, Baha Mar’s senior vice-president of governmental and external affairs, said the new hotel brands introduced by the $2.6 billion project, together with the new tourist markets it aimed to penetrate, would help generate the extra 400,000 airline seats into Nassau/Paradise Island that it needed.

He added that the Minister of Tourism’s ambition to grow stopover visitors from their current level of 1.35 million per year to 1.8 million effectively endorsed the position that Baha Mar could grow the tourist market.

And the labour market “is ripe” for Baha Mar to recruit the 5,000-6,000 permanent jobs that it needs, Mr Sands telling Tribune Business that the developer would find workers from outside the hotel industry or who were currently in high school.

“Our positions are that there won’t be a rate war and there is adequate personnel to select from,” Mr Sands said. “We’ve begun the hard work of recruiting talented Bahamians for our jobs, and we don’t particularly see ourselves cannibalising Atlantis.

“We are a brand-centric operation and they’re a family-centric operation. We believe the brands we are bringing to the marketplace will drive incremental business for the destination.

“Yes, there will be some duplication [with Atlantis], but we are satisfied there is sufficient new business in the marketplace for both to co-exist.”

Mr Sands was commenting after George Markantonis, managing director and president of Kerzner International (Bahamas), the Atlantis operator, warned that his resort and Baha Mar - and, by extension, the wider Bahamian economy and hotel industry - were looking at two potential scenarios when the latter became fully operational in 2015.

The positive one, Mr Markantonis said, was that Baha Mar would attract enough new visitors to the Bahamas to grow the high-end visitor market and generate enough business for both it and Atlantis to co-exist.

But the negative outlook, he explained, was that Baha Mar would end up splitting the high-end tourist market with Atlantis. Neither hotel would attract enough guests, forcing them into a ‘rate war’ that drove down room yields, while competition for scarce quality labour drove salary scales to “unsustainable” levels.

Mr Markantonis said the latter scenario would create “a nightmare” felt throughout the Bahamian economy, but expressed optimism that all stakeholders concerned would do what was necessary to ensure the positive outcome became reality.

Emphasising that this was how Baha Mar was viewing the situation, Mr Sands said: “The strategies we have put in place are precise.

“We are looking for talented Bahamians that are both offshore and onshore in a variety of disciplines, and we are currently working with a significant amount of new employees still in school or not at Atlantis.

“To suggest there are one or two that will be recruited for employment from Atlantis, absolutely, but not to the extent there will be cannibalisation, not at all,” he added.

“The marketplace is ripe for us to select the employees we will need. The opportunity is to make the right selection from a pool of persons currently not in the industry.”

Describing Baha Mar’s hotel brands as “world leaders”, Mr Sands added: “They are experts at driving business, and we will support the initiatives they put in place.” While the Grand Hyatt would drive Baha Mar’s groups and convention business, Rosewood had achieved the highest yield - in terms of room rates and occupancies combined - at the luxury end of the market during the recession.

Noting Obie Wilchcombe’s target of 1.8 million stopover visitors to the Bahamas, Mr Sands told Tribune Business: “The difference between where we are today and where the Minister would like us to be today, even in the short-term, can guarantee that Baha Mar can achieve occupancy levels and not cannibalise Atlantis, while giving growth opportunities to the Family Islands.

“We will need incremental airlift of 400,000 persons in the first year. It can be accomplished a number of ways - bigger size of aircraft, increased frequency and new routes to the destination.

“Heretobefore, the Bahamas has been almost North American-centric in generating airlift. We see growth in other markets; Latin America, obviously Asia, and more of out of Europe. Those are levels we have achieved before in this destination pre-2007.”

Mr Markantonis last week expressed scepticism about the Bahamas’ ability to attract significant numbers of Chinese visitors via direct airlift, due to the long distance involved and greater attraction of destinations such as New York.

Disagreeing with this position, Mr Sands said the Bahamas had “never before” placed focused attention on the Asian and Chinese tourist markets. Mass travel by Chinese visitors had only just begun, but already the Us, Australia and Europe were benefiting.

And Baha Mar planned to not only exploit strong diplomatic relations with China, but the fact two of its major partners - the China Export-Import Bank and China State Construction - were Chinese.

This will be used to drive business from China, and Mr Sands said: “These are dynamics that never heretofore existed, and you cannot dismiss the fact they will now exist.”

He added: “Certainly, the sound bite for many may appear to be the cannibalisation of rates and labour, but the reality is the possibilities indicated will take us in a different direction.

“We have some yield and rates we want to accomplish, and these cannot be achieved through cannibalisation. The reality is there are all the indications that the growth of the market is going in the right direction.

“Once we’ve completed a full year of operation, we forecast the GDP of this country should increase at least 10 per cent. We’re doing our part to make sure that happens.”