The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Atlantis’s top executive is remaining cautious despite a group booking pace for 2015 and 2016 that is 25 per cent faster than this year’s, adding of 2014 to-date: “We’re exactly where we thought we’d be.”

George Markantonis, president and managing director of Brookfield Hospitality, told Tribune Business he was not reading too much into the improved group booking pace due to the possibility it could be “a timing issue”.

However, he said Atlantis’s occupancy levels for 2014 to-date were in line with the 70 per cent level that the resort’s management had forecast for the full year.

Hinting that planned upgrades to Atlantis were awaiting completion of its $2.3 billion debt refinancing, Mr Markantonis suggested this would likely close imminently, saying: “I don’t think you are going to be waiting to hear from me at the end of June.”

Tribune Business sources close to the resort’s $175 billion owner, Brookfield Asset Management, have indicated that it is aiming to complete the refinancing/restructuring of the debt it inherited from Kerzner International by end-June - some three months ahead of the September 2014 deadline it originally obtained from the remaining lenders.

“The refinancing is progressing very, very well,” Mr Markantonis said. “We’ve had excellent co-operation and assistance from the Government.”

Three teams, located on Paradise Island, Florida and New York, are “working very diligently on it”, the Atlantis chief hinting strongly that it is on track to complete by month’s end or even before.

Asked whether existing, and potential new, lenders were concerned about the $2.6 billion Baha Mar resort’s potential to split Atlantis’s market, Mr Markantonis suggested he and the management team had managed to allay “concerns about a variety of factors”.

Apart from the increased competition and room inventory that will be offered by Baha Mar, Mr Markantonis said other questions had focused on whether the Bahamas had sufficient airlift capacity to meet the combined needs of Cable Beach and Atlantis.

“There were questions raised about whether the labour market pool could adequately supply the room inventory,” Mr Markantonis told Tribune Business. “We were able to soothe those kinds of fears.”

This newspaper understands that Brookfield is likely to use part of the $140.5 million proceeds from the One & Only Ocean Club to assist the debt refinancing, possibly offering existing lenders a ‘cash downpayment’ on what is owed to them.

Mr Markantonis described that property’s new owner, Ukrainian-born billionaire Len Blavatnik’s Access Industries, as “an excellent investor for the Bahamas. They’ll be great for the Bahamas and great for the property”.

As for Atlantis’s operational performance, Mer Markantonis told Tribune Business: “We’re exactly where we thought we’d be. April was huge, very strong.

“Management forecast to be around 70 per cent occupancy for the year, and that’s where we are now.”

While May had been relatively quiet due to the re-start of the school year, he added: “We run into very high occupancies, almost sold out starting from next week, when school breaks.

“We’ve got a lot of exciting plans going on. We’re waiting for this refinancing to be done, and we will go on from there. We’ve got a lot of things under design, but nothing I can reveal yet.”

Looking ahead to 2015 and 2016, Mr Markantonis said: “Our group pace is extremely strong for both those years - stronger than the group pace was for this year.

“We were running about 25 per cent faster, but I don’t want to make too much of it because it could be timing.”

Atlantis is also seeking to expand its catchment area beyond its core US east coast market, having launched a major TV and print media promotional campaign in Texas, targeting Houston and Dallas, in particular.

Mr Markantonis said Atlantis was expecting “some definitive answers” and “some kind of resolution very shortly” on the proposed Casino Gaming reform Bill, which has been with the Government for some months.

The legislation, which is seen as vital to ushering in changes that will maintain the Bahamas’ competitiveness as a casino gaming destination, was delayed when it became caught up with web shop gaming.

“It’s important to stay up with the competition in North America,” Mr Markantonis said. “We need to have private gaming rooms, we need to look at mobile gaming in more depth to help us to keep up with the competition in Florida, Atlantic City, New York and the east coast of the US. That’s where we get our customers from, including quite a few significant charters.”

Reserving further comment on the Government’s revised Value-Added Tax (VAT) proposal until more details were released, Mr Markantonis said he was anticipating “a lot of speed in the next few days” on this issue.