The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Atlantis is hoping its 10-year franchise deal with Marriott International will generate an extra 50,000-100,000 room nights per year, its top executive describing the agreement as “the most significant tourism stimulus for the Bahamas this decade”.

George Markantonis, Brookfield Hospitality’s president and managing director, told Tribune Business that by becoming part of Marriott’s signature Autograph Collection, the Atlantis resort hoped to see “somewhere in the region” of a 10-15 per cent increase in annual room nights.

He confirmed that Marriott’s $100 million mezzanine loan to Atlantis was part of the latter’s $1.9 billion refinancing concluded earlier this week, while access to the former’s 45 million-strong global customer base was “not a kick in the pants”.

The agreement, designed to benefit both parties, gives Atlantis direct access to the 45 million customers in the Marriott Rewards loyalty programme.

The Paradise Island resort will also become part of the latter’s global sales, reservations and distribution network, and its frequent traveller programme.

“I believe this could arguably be the most significant tourism stimulus for the Bahamas this decade,” Mr Markantonis told a press conference to announce the Marriott tie-up.

“We are announcing something innovative, something new and something specifically designed to make sure Atlantis and the Bahamas are successful moving forward.

“Tourism is an evolutionary process, and we have to keep working at it. Business doesn’t just show up. Atlantis doesn’t let the moss grow under our cheek. It’s important we are proactive. We feel we are leading a new, revolutionary tourism product.”

Mr Markantonis later confirmed to Tribune Business that the Autograph Collection franchise agreement was for 10 years, and that Marriott’s $100 million loan was part of the debt restructuring.

Explaining that it was normal for Marriott to engage in such financing arrangements, the Atlantis chief told this newspaper: “I think it’s very good for the country. A 45 million person database is not a kick in the pants. We can’t wait for things to happen to us.”

Mr Markantonis said it was difficult to project how much additional business the Marriott deal might drive to Atlantis, but expressed hope that the resort’s status as a unique, tropical destination product might attract more points seekers/redeemers than other Autograph Collection properties.

“We’re hoping that it drives between 50,000 and 100,000 additional room nights. But we don’t know,” he told Tribune Business. “Somewhere in that region of a 10-15 per cent [increase] we’d like to think. I really do hope so.”

Mr Markantonis also indicated that the Marriott agreement was designed to further strengthen Atlantis’s competitive position prior to Baha Mar’s opening, as he said the deal “couldn’t have been better timed”.

From Atlantis’s perspective, the deal is a strategic partnership engineered to drive more tourists, and especially group business, to it. The benefits from the alliance with a strong, world-leading hotel brand should, in theory, show up in all its financial performance indicators and the bottom line.

Atlantis will also retain its name and brand identity, remaining an independent destination resort owned by Brookfield and managed by Mr Markantonis and his team.

As for Marriott, adding Atlantis to its 60-strong Autograph Collection of lifestyle hotels will enable its Rewards members to earn and redeem points in the Bahamas for the first time.

Apart from becoming the Autograph Collection’s first property in the Bahamas, Atlantis - with its 3,400 total rooms - will be its largest resort property in the world.

Mr Markantonis described the agreement as “a fantastic blend of two brands very well known throughout the world”. He added that both sides were targeting a fall 2014 start for the tie-up.

Marriott International executives seemed just as excited to add Atlantis to their portfolio,. Rick Hoffman, its executive vice-president of business development, promised to “bring as many” of its 45 million customers to Atlantis as possible.

Describing Atlantis as “a unique place”, he added: “We are very excited about what we can bring to the management team here.”

Pointing to the Paradise Island property’s “multiple price points” and numerous amenities/experiences as a major draw for Marriott’s customers, Mr Hoffman said Atlantis would also be featured on the brand’s website - a booking engine that produces $9.6 billion in gross room sales annually.

He added that Marriott would also use Atlantis to target its group booking client base. That is a key segment for Atlantis and other hotels with convention centres, accounting for between 20-30 per cent of annual bookings, and providing a long-term business source around which they can arrange their leisure traveller guests.

Mr Markantonis said the Autograph Collection agreement would be “a big stimulus for our groups”, joking that Atlantis would “take a lot of point redemptions” away from the next largest resort - the 3,000-room Cosmopolitan in Las Vegas.

Dave Grissen, Marriott International’s group president, said hotels joining the Autograph Collection on average saw a 20 per cent increase in revenue per available room (REVPar) - arguably the most important performance indicator - within 12 months.

He added that Marriott International hoped to have 80 properties in its Autograph Collection, which launched in 2014, by year-end.

Atlantis will become the 80th hotel in Caribbean and Latin America to be branded by Marriott, which has another 50 properties under development in the region.

It aims to have 150 hotels, spread across 10 lodging brands and 27 countries, by 2017.

Mr Grissen said luxury and lifestyle hotels account for 25 per cent of Marriott’s resort development pipeline, and some 200 properties are being developed under the group’s Ritz-Carlton, Renaissance, Autograph and AC collections. The total investment in these hotels, he added, was likely to be $15 billion.

With 26,000 new hotel rooms opened across Marriott International’s different brands in 2013, Mr Grissen said agreements for a record 387 projects - a rate of more than one per day - had been signed last year.

Those projects would add a collective 67,000 hotel rooms globally, and Mr Grissen said 195,000 rooms were in development across five continents.