The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama’s already-reeling tourism economy was this week dealt a fresh blow after its “largest supplier of room nights” and stopover visitors announced it was cancelling all services to the island for summer 2017.

Vacation Express’s withdrawal from the Grand Bahama market was said to have been sparked by a lack of available guest accommodation due to the closures of both the Memories and Grand Lucayan properties, which has taken 1,500 rooms out of the hotel sector’s inventory.

The pull-out was disclosed in a February 21, 2017, e-mail sent to members of Grand Bahama’s business community by Carmel Churchill, director of marketing services for the Grand Bahama Island Tourism Board.

The e-mail, which has been seen by Tribune Business, discloses that the Board is working feverishly with the Ministry of Tourism “to minimise the void” left by Vacation Express’s withdrawal.

Suggesting that the Board will have developed “a plan” by the end of this week, Mrs Churchill said its marketing committee had met on Tuesday to discuss the island’s tourism promotional initiatives given the “current airlift and accommodations available into the destination”.

She revealed: “We wish to advise that concerns were tabled regarding the prolonged closure of the Memories Grand Bahama Resort and the Grand Lucayan’s Breakers Cay property.

“This concern was further realised after Vacation Express, our largest supplier of room nights into the destination, was unable to secure sufficient accommodations on-island to fulfill its summer programme obligations.

“Based on this current situation, Vacation Express has now decided to cancel its 2017 Summer Charter programme into Grand Bahama.”

While not disclosing Vacation Express’s stopover market share, or the number of room nights likely to have been lost, Mrs Churchill wrote: “While these series of events present another challenge to our tourism business, the Grand Bahama Island Tourism Board and the Ministry of Tourism’s teams are in the process of finalising contingency plans to minimise the void that will be left by this programme.

“Please stand by for further updates on our next steps. We will have a plan to share by the end of this week.”

Mrs Churchill then sought the wider private sector’s support in mitigating the fall-out from Vacation Express’s summer withdrawal, saying: “We would like to take this time to encourage each of you to consider what offers you can provide to us that will assist in providing compelling offers to encourage visitors that were previously booked to Grand Bahama to continue their plans, or to encourage new ones to consider Grand Bahama at this time.

“These offers will be compiled into a coupon booklet and will be distributed on Bahamas.com, GrandBahamaVacations.com and at local hotels. If you can submit your offers by Friday, February 24 by 3pm, we would appreciate it.”

Neither Obie Wilchcombe, minister of tourism, nor Dr Michael Darville, minister for Grand Bahama, could be reached for comment yesterday on the latest reversal for the island’s tourism/hotel industry and wider economy.

The Vacation Express pull-out is the second ‘abandonment’ of Grand Bahama within one month by its immediate owner, the Sunwing Travel Group, which also controls the Blue Diamond Resorts brand that operated the Memories resort.

Vacation Express was Sunwing’s tour operator arm, providing visitors with Grand Bahama vacation packages and flying them in on charter flights, including its owner’s Sunwing Airlines.

The pull-out implies that Sunwing has reneged on the promise it made just over three weeks ago, in confirming the Memories closure on February 1, that it remained fully committed to supporting Grand Bahama’s tourism economy through the continuation of airlift.

The Canadian-headquartered firm said then: “Sunwing intends to continue supporting Grand Bahama island and its tourism economy, including its hotels, through its tour operators, Sunwing Vacations and US-based Vacation Express, as well as by continuing its airlift programmes from Canada and from the United States in the summer, subject to conditions we are discussing with Government.”

It is unclear whether the pull-out was prompted by the Government failing to meet Sunwing’s “conditions”. Other unanswered questions include whether Vacation Express’s pull-out applies just to the summer, and if services will resume for the winter 2017-2018 season; and whether Sunwing Vacations and Canadian airlift are unaffected.

However, the impact from Vacation Express’s withdrawal, and the loss of Grand Bahama’s greatest ‘room night’ source, will be felt throughout the island’s hotel industry.

Pelican Bay, Castaways, Viva Wyndham Fortuna Beach and others will all potentially suffer a loss of business as a result.

One prominent Grand Bahama private sector source, speaking on condition of anonymity, said they were not surprised by the Vacation Express pull-out notwithstanding Sunwing’s earlier promises.

“Remember when they said they were going to keep that?” the source said of Vacation Express. “That [pull-out] doesn’t surprise me one iota. We’re in a terrible way. The Government isn’t doing anything; nobody is.”

Mick Holding, the Grand Bahama Chamber of Commerce’s president, yesterday confirmed to Tribune Business he had been among those informed of Vacation Express’s withdrawal.

He described the island’s tourism economy as being “in the doldrums”, and said the closure of Memories and most of the Grand Lucayan following Hurricane Matthew had been “devastating” for numerous Bahamian-owned businesses.

“The tourist industry is still in the doldrums right now,” Mr Holding told Tribune Business, “and only earlier this week we had Vacation Express, the largest supplier of room nights to Freeport, cancelling their summer programme.

“That’s another blow to the tourist industry and the overall economy. The tourism industry really right now is in the doldrums, and somehow we have got to work to getting it back to where we were 12 months ago as a starting point, and take it from there.

“The prospects for 2017 at the moment for that sector of our economy don’t look good at all. We need to work together, the Government, the Port Authority and the Chamber of Commerce, to find new businesses to come on to the island and pick up where Memories left off.”

Mr Holding said the Memories closure had delivered “devastating news for Freeport because of the loss of 400-500 jobs”.

“The ripple effect goes down to tour operators, restaurants and bars and retail stores,” he added. “The effect can be quite significant and is very significant.”

The Chamber president said Matthew, and the subsequent Memories and Grand Lucayan closures, had been especially ill-timed because “quite a lot” of tourism industry businesses had been “on the verge of expanding and offering new products to tourists”.

“Tragically, their market has been significantly hit,” Mr Holding said of budding tour and excursion providers. “I’ve always said that what we’ve got to do is not only attract tourists in the first place, but get them to come back. A lot of places offer sun and sand, and we’ve got to offer more than that.”

He added that the Chamber “will do everything we can to support the drive to find new owners” for the Grand Lucayan. Hutchison Whampoa’s property arm, Cheung Kong Property Holdings, last year initiated an auction sales process for the resort, but has yet to announce a buyer.

The Government appears to be backing a bid led by the Wynn Group, a Canadian-based real estate developer, to acquire the Grand Lucayan. Sunwing/Memories and Hard Rock are also part of the Wynn bid, but little has been heard in recent days as to whether the offer - said to be around $110 million - is making any progress.

The silence indicates that both the Wynn-led bid and the Government are having difficulty in getting any movement out of Hutchison Whampoa when it comes to either selling or re-opening the Grand Lucayan.

Mr Holding suggested the Grand Lucayan had “suffered somewhat” through not having “an internationally recognised brand” for its hotels and casino - something that would act as a key draw for tourists.

He added that the industrial sector’s continued strong performance remained the major bright spot for Grand Bahama’s economy, as it was largely insulated from domestic economic developments.