The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government will give its “full support” to whatever deal is reached between Sunwing and Hutchison Whampoa over the Grand Lucayan, the Minister of Tourism confirming talks between the two had moved to a “lease to own” arrangement.

Obie Wilchcombe told Tribune Business that the two companies had been in discussions for several months over expanding their relationship beyond the initial Memories Grand Bahama agreement.

“It started off as lease to manage, and went to lease to own,” Mr Wilchcombe told Tribune Business of the nature of the current talks between Sunwing and Hutchison Whampoa.

“I think it’s all on the table, and whatever works in favour of all, we look forward to. Let’s hope we get a good Christmas present.”

He added: “We understand they’ve been in discussions for several months. Memories has done a tremendous job in Grand Bahama. They’ve proven to be a good partner to have, and we’re hoping they move along the same lines with Hutchison Whampoa.”

Numerous Tribune Business sources close to developments have told this newspaper that Sunwing is interested in expanding its Grand Lucayan involvement, and presence, beyond the deal that saw its Memories brand lease the Reef property from Hutchison Whampoa under a management/operator agreement.

This newspaper was told that Sunwing is also interested in taking over the two remaining Grand Lucayan properties, the Lighthouse Pointe and the Manor House.

One would be branded by Sunwing’s Royalton concept, with the other turned into an adult all-inclusive resort called ‘Chic’.

“They haven’t identified what they want to do, but they certainly want to have a variety of brands,” Mr Wilchcombe said of Sunwing’s plans.

“We have met with Stephen Hunter [Sunwing’s chief executive] and given him our full support, and hope things move progressively. We’ve told Stephen Hunter that we fully support him, hope Hutchison and Sunwing arrive at a favourable agreement.”

Prime Minister Perry Christie recently alluded to talks between Hutchison and Sunwing over a deepening of their relationship when he recently announced new cruise/ferry services to Grand Bahama, although he did not go into detail.

Mr Wilchcombe’s comments indicate that the Government is taking a ‘hands off’ approach to the negotiations, letting the two private companies see if they can work out a deal that meets their requirements before presenting it to the Christie administration.

Tribune Business’s contacts confirmed that the talks had moved to a ‘lease to own’ arrangement some weeks ago, although they had no information on how far discussions had progressed.

They expressed doubts, though, as to whether Hutchison Whampoa would ever relinquish ownership of all or part of the Grand Lucayan, suggesting it was a useful ‘bargaining chip’ for the Hong Kong conglomerate to have when dealing with the Government.

This, the sources said, was because Hutchison’s main Grand Bahama interests were the Container Port and Harbour Company (including the airport), as opposed to the resort and the real estate (DEVCO).

The Grand Lucayan, though, was more important to the Bahamas and the Government, given its employment impact and position as the island’s ‘mega resort’.

Memories and Sunwing, though, have been credited with improving Grand Bahama’s arrivals figures and tourism product.

The vertically-integrated company, which includes a travel/tour operator as well as an airline and resort operator, was viewed as an ideal partner for the Bahamas, given that its structure better enables it to control operating costs.

Sunwing has expanded the number of Canadian cities it connects to Grand Bahama to eight, with the addition of Vancouver and Calgary, a development the Ministry of Tourism believes will boost the island’s air arrivals by 35 per cent.

Tribune Business understands that Memories generated average monthly guest occupancies of between 62 per cent to 66.4 per cent for the July-September period, up from 44.46 per cent in June 2014.