The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government and major hotels need to collaborate on a "brand Bahamas" strategy to prevent 'cannibalisation' and ensure the industry remains on "an even keel", a former tourism minister urged yesterday.

Obie Wilchcombe told Tribune Business that the Government and Nassau/Paradise Island Promotion Boards should each commit half their annual marketing budgets to promoting the wider Bahamas, as opposed to specific locations and hotels.

Acknowledging the concerns expressed by Howard Karawan, Atlantis's top executive, Mr Wilchcombe said the Government needed to assist in developing a co-ordinated strategy between the Paradise Island resort and Baha Mar to ensure both could thrive and grow the Bahamas' tourism market.

"I think what has to happen is that the leaders of that industry have to meet and arrive at a paradigm that is equitable to all," the former minister told Tribune Business.

"Certain things can result if we don't sit down and talk. You have to decide what the room rates are that you're offering, and how you can offer a strategy to the market that is best for both Paradise Island and Cable Beach."

Mr Wilchcombe suggested that his successor, Dionisio D'Aguilar, and tourism director-general, Joy Jibrilu, needed to call all the major Nassau/Paradise Island resorts together and lead the discussions.

"They have to sit down with the players and make sure there's an even keel," he added. "If there's anything else, it could be devastating." Mr D'Aguilar was in a meeting when contacted by Tribune Business yesterday and, despite saying he would call back, no such contact was received before press time.

Mr Wilchcombe was speaking after Mr Karawan admitted to fears that Baha Mar's opening could 'cannibalise' Atlantis's existing business and that of other New Providence-based resorts unless the Bahamas could grow its visitor market.

Mr Karawan warned that such growth "does not happen overnight", and said he was seeing the impact from "new developments" reflected in pricing pressures going into the 2017 Christmas season.

Fears that Baha Mar may split, rather than grow, the market for high-end visitors with Atlantis have been present ever since the $4.2 billion Cable Beach development was conceived in 2003-2005. Paul O'Neill, Atlantis's former top executive, publicly voiced such concerns during that period at a Bahamas Chamber of Commerce luncheon.

Should these fears come to pass, it would create downward pressure on room rates at both New Providence's mega resorts and, potentially other hotel properties, with none generating the profits they need to keep Bahamians employed and maintain a sustainable business model.

Acknowledging the validity of these concerns, Mr Wilchcombe told Tribune Business: "We have a limited amount of rooms in the Bahamas, and we have have to maintain particular room and occupancy rates and levels.

"To do that, all players have to agree. If you have filibustering, it's difficult to sustain. You cannot leave the hotel developers to it; you need a national plan, and have to think about how to do this and how it works.

"One of the problems we had before was, when Paradise Island lowered its rooms rates, how was Grand Bahama going to compete with that?"

Baha Mar's net 2,300 room increase is the first significant expansion of the Bahamas' hotel inventory for two decades, and an additional 314,000 airline seats per year are required to fill both this and existing hotels.

Despite the concerns that room supply will outstrip demand, and depress rates, Mr Wilchcombe said it was essential to increase the Bahamas' room inventory given that global competition will only intensify further.

"If they can sit down and talk," he said of Atlantis and Baha Mar, "we have a tremendous opportunity to grow the industry and sustain the growth of the industry.

"Atlantis has a great brand, Baha Mar has great brands, and so do Sandals and Breezes. The players are good. Howard Karawan is wonderful. He's outstanding. He's an expert and he helped to build that Atlantis brand. Graeme Davis at Baha Mar is also very good."

Mr Wilchcombe said a co-ordinated marketing strategy that grow the Bahamas' visitor base was essential to avoid the feared 'cannibalisation'.

With the Nassau/Paradise Island Promotion Board spending $30-$40 million per year on marketing, and the Government allocating $15-$20 million via the Ministry of Tourism, the former minister suggested both allocate have their budgets to a joint promotional spend focused on the Bahamas' brand.

"The money has to come into one bucket, and we use that bucket to market the Bahamas," Mr Wilchcombe told Tribune Business. "If we take what the Government has, and what the Promotion Board has, we have a lot of money. Put that together in a plan."

He added that such a promotional fund could be used to target markets in North America, Europe, Latin America and Asia.

"We have the players," Mr Wilchcombe reiterated. "The players are good. We have some of the best. If they are going to compete against each other, there's a problem. They ought to be partners, not competitors.

"We have to think about what we're doing as a destination. Let's market brand Bahamas, not individual hotels. You go to Florida, New York, not the hotel. It's the brand, brand Bahamas, that we ought to be focusing on."