The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s new owner yesterday said efforts to broaden its client base beyond the original developer’s “narrow focus” would not split the high-end visitor market with Atlantis to the detriment of both properties.

Graeme Davis, Chow Tai Fook Enterprises (CTFE) Bahamas president, told Tribune Business that both he and his Atlantis counterpart held the “expectation” they could collaborate on growing this nation’s tourism base for the entire industry’s benefit.

He confirmed that CTFE intended to broaden Baha Mar’s appeal beyond the casino-centred vision envisioned by the property’s first developer, Sarkis Izmirlian, to one that was also “family friendly”.

Speaking earlier at the Bahamas Business Outlook conference, Mr Davis said that among Baha Mar’s targets would be households earning more than $150,000 in annual income; adults in the 35-54 years old demographic; ‘Baby Boomers’; multi-generational families; millennials; ‘Generation X’ families and groups.

This could ignite long-held fears among some in the tourism industry that Baha Mar’s plans could result in the destination resort ‘splitting the high end market’ with Atlantis to the detriment of both, undermining profitability and driving down room rates.

Mr Izmirlian’s vision for Baha Mar had been one where the project targeted childless couples and singles, placing a heavy emphasis on the casino, in a bid to differentiate itself from Atlantis’s targeted family market.

However, Mr Davis yesterday moved to reassure on the ‘market splitting’ concerns, emphasising that Baha Mar would be “family friendly” whereas Atlantis was “family focused’.

“I think we have to,” he replied, when asked by Tribune Business if CTFE was going after a broader market than Mr Izmirlian. “We continue to say that the strategy in the past was narrow-focused, going after a niche market.

“We feel that there is a broader base of business that can be attracted to the property, and that’s in the luxury, upscale market globally. We’re focusing on a more sophisticated experience that’s family friendly, not family focused. That’s a broad niche for us.”

Mr Davis said he had already met his Atlantis counterpart, Howard Karawan, to discuss how the Bahamas’ two largest destination resorts could collaborate on areas of mutual interest, such as marketing initiatives designed to grow the customer base and drive increased traffic to both resorts.

“We certainly don’t want to,” Mr Davis responded, when Tribune Business raised the ‘market split with Atlantis’ issue. “There will be a little bit of crossover [cannibalisation]” at the start.

He added: “We both understand, Howard Karawan and I, that’s in everyone’s best interest to grow the product together, grow the volumes together, to grow into new markets and grow the market together, driving more interest to the Bahamas than in the past.

“That’s our expectation and our strategy. We’ll collaborate together.”

Mr Davis confirmed that CTFE would invest more than $100 million in pre-opening expenses, such as recruitment and marketing, prior to Baha Mar’s April 21 ‘soft opening’.

Confirming that the Hong Kong-based conglomerate would retain the Baha Mar name, due to the brand equity already built into it from previous marketing, he revealed that the ‘Bahamian Riviera’ tagline would be dropped.

“The ‘Bahamian Riviera’, that side of the marketing and the destination marketing, that most likely will fade away,” he confirmed.

Mr Davis then told Tribune Business that Baha Mar’s convention centre “certainly has more than $250 million worth pent-up demand” for group bookings over the next three years, referring to the figure that was on the Grand Hyatt’s books prior to the resort’s 2015 collapse into Chapter 11 bankruptcy proceedings and subsequent receivership/liquidation proceedings.

He acknowledged, though, that it would take time to ramp up Baha Mar’s group business under CTFE, as the meeting planners who drove high-end bookings would want to “touch it, feel it” and make sure the development was for real given its recent history.

“It’s not something you can turn a switch on and bring in vast volumes of group business,” Mr Davis explained. “But when you look at future booking opportunities for the next three years, we certainly have more than $250 million worth of pent-up demand.”

He added that Baha Mar had currently received around 6,000 applications for the 1,500 jobs that will be filled by the April 21 opening, saying that CTFE was “very encouraged by the enthusiasm and diversity” of the potential labour pool.

Mr Davis told Tribune Business that CTFE was also extremely confident of a “positive outcome” on its casino licence application.

Baha Mar is the first of its integrated resort developments where CTFE will operate and manage the casino itself, under the Baha Mar name, and he suggested this could become the conglomerate’s model moving forward.

“It’s going very well. We’ve had the probity interviews in Hong Kong and locally,” he said. “We’re very encouraged by the feedback we’ve received from the Gaming Board, and have no hesitation at all that we’ll have a positive outcome with respect to the casino.”

Mr Davis confirmed that Sky Warrior (Bahamas) is the casino management company’s name, adding: “When you buy a company off the shelf, you take whatever name is available. It has no real significance.”

Pointing out that Baha Mar’s three hotel brands, Grand Hyatt, SLS and Rosewood, have a 20 million strong client marketing database between them, Mr Davis said there were opportunities to integrate the project’s casino operations with other CTFE developments worldwide.

He added that CTFE was developing the casino gaming management expertise in-house, rather than hiring an external firm like Mr Izmirlian, and also looking to hire back many of the former casino workers terminated in November 2015.