The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport must attract a Sol Kerzner or Sarkis Izmirlian to “ completely revolutionise its tourism product”, a well-known businessman yesterday warning there was a “horrible disconnect” between visitors’ service expectations and the reality.

Addressing a Grand Bahama Chamber of Commerce luncheon, Dionisio D’Aguilar said Freeport’s moribund tourism industry needed “an individual with money, vision, passion and experience to make something happen”.

The Government is pinning its hopes on the agreement with Blue Diamond Hotels, the resort operator component of Sunwing Travel Group and TUI, to re-open the Grand Lucayan’s Reef Village property, a move billed as creating 1,000 full-time jobs.

Yet Mr D’Aguilar yesterday described the city’s inability to “grow and sustain” a distinct tourism product as “the biggest failure of the Freeport model”.

He added, though, that the blame lay not just with the likes of Hutchison Whampoa and other foreign investors, but Bahamians, too.

And, tackling concerns that Freeport’s real property tax exemption - if extended beyond 2015 - would encourage property owners to ‘land bank’, the former Chamber of Commerce president said the tax should be levied on those who failed to develop their land within 10 years.

Noting that Freeport provided the ideal platform for the private sector and authorities to be “on the same page, working in the same direction to get to the same goal”, Mr D’Aguilar said this rarely occurred in Nassau.

Yet, while joining others in describing Freeport as “an untapped opportunity” and a city that “should be a thriving hub”, the Superwash president also agreed that it had lost its way.

He acknowledged the feelings of many that Freeport was a city in slow decline, its 17 per cent unemployment rate above the national average, and constant indications of a population shift to Nassau. New major investments were also few and far between.

Drawing on previous Tribune Business articles featuring attorney Terence Gape, Mr D’Aguilar said: “The biggest failure of the Freeport model has been its inability to grow and sustain a respectable tourism product.

“Hotel room visitors amount to 25 per cent of what they were in 2004, and while there have been substantial increases in cruise ship visitors to Freeport, [the city] has been unable to leverage that increase into more spending on the ground.

“In fact, it is reported that only 10 percent of the passengers that come to Freeport actually get off the boat.”

Complaints about the quality of visitor service and experience abounded, and Mr D’Aguilar added: “Freeport needs to attract a Solomon Kerzner or a Sarkis Izmirlian or a Ken Dart to completely revolutionise its tourism product.

“Deep pockets, vision and a commitment to developing a workforce that is customer friendly and understands the word service is what is needed.

“Hutchison Whampoa has failed in its bid to grow this sector, and the papers abound with stories of its troubles and downsizing over at the Grand Lucayan. But we as Bahamians must accept some of the blame, too. There is simply a horrible disconnect between what visitors to Freeport expect in terms of service.......and what they are delivered.”

Turning his focus to the impending negotiations between the Grand Bahama Port Authority (GBPA) and the Government over Freeport’s Business Licence and real property tax exemptions, which expire in 2015, Mr D’Aguilar said there was no consensus on whether the latter should be extended.

This, he warned, “will only make an already indecisive government even more confused about what to do”.

As a result, a decision on the real property tax exemption was only likely to come at the “11th hour”, with the lingering uncertainty likely to further depress real estate investments in Freeport.

“Vast tracts of real estate remain undeveloped despite the fabulous infrastructure that supports it,” Mr D’Aguilar said.

“I think the clever thing to do would be extend the exemption until 2054, once you develop your property or provide a minimum investment therein.

“If you fail to develop your property within the next, say 10 years, property tax will begin accrue using the same rates applied in rest of the Bahamas. This should incentivise persons sitting on vast tracts of land to start thinking about what to do with this property and thereby stimulate economic activity to avoid the tax.”

Freeport’s problems over the last eight years, Mr D’Aguilar added, had been exacerbated by now-resolved shareholder battle at the GBPA, something that had given the outside world the impression no one was in charge in Freeport.

“The entire experience has left Freeport scared and the business of developing Freeport was allowed to languish,” Mr D’Aguilar, adding that a Nassau-centric government was ill-placed to fill the void.

He said the “jury is still out” on the Ministry of Grand Bahama, questioning whether this “incredibly underfunded arm of the Government really has the authority to make a difference”.