By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Baha Mar is targeting just a 25 per cent average occupancy rate for 2017, the Minister of Tourism revealed yesterday, amid questions about the Government’s $9 million “equity contribution” to the project.
Dionisio D’Aguilar disclosed details of his recent discussions with Baha Mar’s principals as he slammed Bradley Roberts, the Progressive Liberal Party’s (PLP) chairman, for suggesting his directorship on the previous developer’s Board placed him in a ‘conflict of interest’ position.
Calling on Mr Roberts to “sit small”, Mr D’Aguilar said he was a “right-thinking, business-headed” Minister of Tourism who was simply meeting with the sector’s key stakeholders to understand their plans and concerns.
Emphasising that Baha Mar’s ownership was not a subject discussed in his meeting with Chow Tai Fook Enterprises (CTFE) and resort brand representatives, the Minister confirmed that the $4.2 billion will undergo a gradual, phased opening to allow for both its construction completion and ongoing staff training to perfect the guest experience.
“Their plans are to continue to very slowly open up the property,” he told Tribune Business of the new owners. “Their goal was 25 per cent occupancy for the year, and then in the first quarter of next year to begin to complete the opening of the fourth property, the Rosewood.
“The marketing campaign will be rolled out as rooms come on stream. They believe that’s the best way to do it.”
Baha Mar’s relatively low occupancy rate target for 2017 is not necessarily surprising, given that just the casino and associated hotel, plus the convention centre, were opened in late April. The remaining room inventory, represented by the SLS and Rosewood properties, is set to come on stream when these resorts open in late 2017 and by April 2018, respectively.
However, several sources were quick to question who would cover the multi-million dollar losses and pre-opening expenses incurred during Baha Mar’s gradual ramp-up, and whether this burden has been transferred from CTFE and the project’s secured creditor, the China Export-Import Bank, to the Government and Bahamian taxpayer.
Concerns, in particular, were raised over a line item in the 2017-2018 Budget entitled ‘Equity Contribution - Baha Mar’, which appears to commit the Government and taxpayers to paying $9 million per annum to the Cable Beach development over the next three Budget years.
This totals $27 million, and appears unrelated to the marketing commitments made by the Christie administration in its April 25, 2017, Heads of Agreement with CTFE. This calls for the Government to contribute $4 million per annum over an eight-year period for a total of $32 million, and the $9 million ‘equity contribution’ is contained in the Ministry of Finance’s budget - not that of the Ministry of Tourism.
K P Turnquest, the minister of finance, could not be reached for comment before press time last night on what the $9 million ‘equity contribution’ to Baha Mar represented.
Robert Sands, Baha Mar’s senior vice-president of government and external affairs, declined to comment last night when contacted by Tribune Business, with Graeme Davis, Baha Mar’s president, said to be off-island.
However, well-placed Tribune Business sources suggested that all pre-opening expenses and losses, including the cost of keeping 1,500-plus Bahamians employed with minimal incoming revenues, would be borne by CTFE. “They are committed to making this work,” one contact said of the Hong Kong-based conglomerate.
Mr D’Aguilar, meanwhile, indicated that the Government would prefer CTFE to move faster on opening Baha Mar. He said: “Any government would be interested in getting as many rooms open as quickly as possible, and getting visitors in the country.”
Mr Roberts had accused Mr D’Aguilar of having “a vested interest” in removing Baha Mar’s ownership from CTFE, given his previous position as a Board director for the project’s original developer, Sarkis Izmirlian.
Mr D’Aguilar, in the two-year period leading up to the general election from Baha Mar’s Chapter 11 bankruptcy filing, was a leading advocate of Mr Izmirlian’s cause, arguing that the project was wrongly stripped from the latter by an alliance between the former Christie administration and the Chinese government-owned lender and contractor.
The Minister of Tourism refuted the PLP chairman’s ‘conflict of interest’ claim over his meeting with Baha Mar’s executives, stressing that he was acting in his capacity to promote and safeguard the Bahamas’ leading industry.
“There was no discussion about ownership. That was certainly not the place for it to be done,” Mr D’Aguilar told Tribune Business.
He added, though, that his personal views on the Baha Mar controversy had not altered, and indicated that the Minnis administration had not come to a final decision on the project’s ownership.
“I’m not going to get into a back and forth with Mr Roberts on what couldda, wouldda, shouldaa have happened over the past two years,” Mr D’Aguilar said. “My views have not changed.”
As for Baha Mar’s ownership, he added: “How that plays out has yet to be decided. That’s not a decision I’ll be making. That’s a decision for the Prime Minister. I don’t know where that stands.”
This sends a potentially unsettling message to both CTFE and other investors, especially given Dr Hubert Minnis’s pre-election comment that an FNM government would “engage and execute a real sale” of Baha Mar to a qualified purchaser if elected.
CTFE’s purchase will only close once Baha Mar’s construction is completed in late 2017, and it is highly unlikely the new government will seek to intervene given how far the deal has progressed, unless it it uncovers something untoward.
Turning to Mr Roberts’ allegations, Mr D’Aguilar said he had been invited to the meeting by Baha Mar. “It was good for any Minister of Tourism to go to such a large property and get a status report, and to discover what their plans were to get the property open, employ Bahamians and increase occupancies,” he told Tribune Business.
“Any sensible, right-thinking, business-headed Minister of Tourism will do just that. We are out of the business of campaigning, have a country to run, and run responsible. Bradley Roberts and his crew had the country for the last five years and they failed.
“The economy did not grow, and stopover arrivals did not grow. Bradley Roberts has to sit small and go to bed at night thinking about what he did wrong, instead of throwing blame at a Minister of Tourism in office for 21 days,” Mr D’Aguilar continued, “and, as any responsible Minister of Tourism is doing, speaking to tourism stakeholders to find out what their plans are and any concerns they have, and to work together to grow the number of arrivals and amount of dollars spent in this country by visitors once they get here.”
The Minister described Mr Roberts as “a political has been” who needs to “wander off into the sunset”, with the margin of the PLP’s general election defeat showing his tenure as party chairman deserved an ‘F’ grade.
Comments
proudloudandfnm 7 years, 4 months ago
I live in Freeport. I don't give a rat ass about Bahamar. Our hotels are still not open and NOT ONE FRIGGIN WORD FROM THE FNM YET.
FREEPORT IS IN CRITICAL SHAPE. WE NEED ACTION NOW!!!!
John 7 years, 4 months ago
25% occupancy cannot even cover operational costs much less pay mortgage.
banker 7 years, 4 months ago
I am beginning to like you again. The average hotel occupancy rate in the Caribbean is about 66%.
http://tribune242.com/users/photos/2017…
Reality_Check 7 years, 4 months ago
D'Aguilar (a/k/a the Customs Duty Dodger) has a very direct conflict of interest in all matters involving Baha Mar, and the fact that he denies it says much about his lack of integrity. The Customs Duty Dodger was a director of Baha Mar at the time it granted many 'favours' to corrupt senior officials and their family members in the last government, including Crooked Christie and his family, the Evil Wicked Witch (Maynard-Gibson) and her family and others. The outrageously generous concessions given to Baha Mar by the last government (that Bahamian taxpayers cannot afford and our country must now borrow to pay) were the obvious quid pro quo for the 'favours' granted by Baha Mar to senior PLP officials at the time D'Aguilar sat on the board of Baha Mar. This constantly yapping white-haired little poodle has cost our country mega-millions of dollars as a result of his role as a director of Baha Mar. As a director he certainly knew full well what corrupt deals were being cut for the outrageous concessions granted to Baha Mar, as did that other Freemason Robert "Sandy" Sands. Of course Sandy Sands's role at Baha Mar has not changed since the government has changed.....he must now just go about cutting a whole new set of corrupt deals with senior officials of a new government, no doubt with the help of his close friend, the Customs Duty Dodger! By appointing the constantly yapping white-haired little poodle as Minister of Tourism, Minnis failed to recognize the grave conflict of interest the little poodle has in all matters involving Baha Mar....and that certainly does not speak well of Minnis's own ability to see and avoid serious conflicts of interest that usually underly very corrupt activities of one kind or another.
TalRussell 7 years, 4 months ago
Comrades! If the organisers Fyre Festival [Tent Shantytown for white foreigner folks] didn't think asking their guests to brungs their own toilet paper was going be such a big deal [And, no - I I didn't make that one up] - then why not place Dionisio D'Aguilar as the minister of tourism to be responsible for getting Baha Mar up full guests occupancy - the same Dionisio that can't wait to evict the Chinese and move back-in his former boss man's Izmirlian to run the joint? [And, no - I didn't make Dionisio up either].
Conflicting or not.....you tells me, okay?
observer2 7 years, 4 months ago
D'Aguilar is absolutely conflicted in both appearance and actuality and it reflects poorly on the FNM. Remember corruption and poor governance starts in small matters and overtime escalates into what we saw in the last years of the PLP "rule".
Why was the duty on commercial washing machines and dryers reduced so quickly when the residence of Bain Town can't get their inner city tax exemptions until "next year"? Why hasn't VAT been removed on bread basket items? Who benefits from duty reductions on commerical washers and dryers? Certain not the residence of over the hill. They are still being charged the same amount to do their laundry. While multi millionaires get richer and richer. Shame. Shame. Shame.
We should follow standard practices as seen in the US. Rex Tillerson, US Secretary of State who recused himself on issues related to Russian oil drilling because he was the former CEO of Exxon with deep ties to Russia.
US Attorney General Jeff Sessions recused himself of the Russian investigation of the Trump administration on the simple basis that he chatted with the Russian Ambassador during the campaign.
D'Agular was a former Director of Baha Mar and highly critical of the Chinese before the election. The former beneficial owner of Baha Mar, a foreigner, looms large as a key supporter of the FNM (appearing at the swearing in). Were there any foreign campaign monies flowing to the FNM from these sources? If so, how much? Where is the Campaign Finance Reform Act? Why doesn't the FNM disclose it campaign funding and provide complete details of where their funds came from. They will say because the PLP did not do it. When since did the PLP become a measuring rod for good governance. Shame. Shame. Shame.
You know what they will say? They will say they will do this next year....and next year will never come. Nothing will change. The FNM will become the new PLP if they don't change their ways right now.
banker 7 years, 4 months ago
Let's look at this soberly. There is no "official" owner. The government is propping up a Chinese company. The Chinese company is targeting a business rate that is not viable. What is wrong with this picture, starting at the ownership level? Anyway any reasonable person looks at this is, does not make sense. We live in a dying Clockwork Orange.
baldbeardedbahamian 7 years, 4 months ago
BANKER YOU'RE TALKING SENSE HERE. THAT MOVIE HAD SUCH A GREAT SOUNDTRACK AND STARRING JACK AS WELL.
TalRussell 7 years, 4 months ago
Comrades! I know this might sound strange to you but is it possible that Minnis is so removed from from cabinet ministerial business - that members of the Minnis cabinet, were in fact - all selected by others and not by Minnis?
banker 7 years, 4 months ago
Now you are showing your PLP predilection for prevaricating. That's just like saying "Is it possible that a sea worm got into Tal's brain while he/she was eating a bad piece of conch from Uncle Tellis' Conch Stall?"
TalRussell 7 years, 4 months ago
Comrade Banker, time will tell us a lot more about who it is who is really in charge the red Shirts cabinet - and I don't think it's Minnis . but prove me wrong, okay?
banker 7 years, 4 months ago
Tell me that there is not a sea worm in your brain. I think that there is, but prove me wrong.
TalRussell 7 years, 4 months ago
Comrade Banker, do you share the view that there exists the potential for conflict within the red cabinet - relating to who/whom/what should get to own Baha Mar? [And, why is its seriousness being dismissed?]
Comrade Banker, exactly how many red cabinet ministers may/could have the potential for Baha Mar conflict?
banker 7 years, 4 months ago
Was there not a blatant conflict of interest when the PLP Attorney General was putting her families shops into Baha Mar, and you said nothing ?????????????
May I remind you that Sarkis doesn't own Baha Mar, will never own Baha Mar (making investments in Cuba) and Dionisio was just a member of the board -- just that. He wasn't an equity owner, and there is NO CONFLICT OF INTEREST. The company is dead -- killed by you criminal PLPs.
Dionisio is doing his best to revive tourism. He is a subject matter expect and that is what is degree is about from the prestigious Cornell University. Now take your worm infested, gossiping mind and introduce it to the truth please. Honour yourself with the truth -- but I know that for PLP's, it is an impossible task because of a genetic mutation that makes you truth blind.
TalRussell 7 years, 4 months ago
Comrade Banker, strange but you are the one that mentioned Dionisio - not I?
banker 7 years, 4 months ago
There you go again with your innuendo (must have learned it from Fweddie). Dionisio is the only possible connection to Baha Mar since he was a director and a vocal critic of the PLP theft of Baha Mar. You and I both know that is who you are talking about, and now you want to play coy, childish games. I really wish that you were a Bahamian patriot instead of PLP bloodsucker on this nation.
baldbeardedbahamian 7 years, 4 months ago
NO YHIS IS NOT POSSIBLE. STUPID POST.
Well_mudda_take_sic 7 years, 4 months ago
For D'Aguilar to say he's a “right-thinking, business-headed” person is laughable to say the least. I remember his father Vince once saying after a JSJ holding company board meeting about his son Dionisio: "He's getting a very fine but costly education abroad; I just hope it will include learning some common business sense." Obviously Dionisio didn't learn the slightest thing about business ethics at his fancy expensive schools abroad, which is all too often the case for silver-spooned business people who are left to enjoy the riches of a very successful self-made parent.
Reality_Check 7 years, 4 months ago
He's certainly no Vince by a long shot and will always find himself having to live under the smothering legacy of his father. Poor unethical fella just didn't get all of the right genes from his father!
banker 7 years, 4 months ago
Talking to yourself again. It is a sign of mental illness.
Reality_Check 7 years, 4 months ago
Is that you @MassExodus....@Honestman....LOL!
Well_mudda_take_sic 7 years, 4 months ago
BOL!!!
DDK 7 years, 4 months ago
Why in the name of all that is Good can we not be told WHO OWNS THIS MONSTROSITY?
"“There was no discussion about ownership. That was certainly not the place for it to be done,” Mr D’Aguilar told Tribune Business."
What is this? What IS our Government in the Sunshine doing?
Reality_Check 7 years, 4 months ago
You honestly expected Minnis to make good on his election campaign promise that his FNM government would be the most transparent government ever when it comes to respecting the public's interest and right to know?!! My oh my.....I sense unsettling reality may be settling in.
DDK 7 years, 4 months ago
I DO believe many of us were hoping for the best. I do NOT believe we should accept any more BS from ANY government.
Reality_Check 7 years, 4 months ago
Whole heartedly agree with you on that score!
Alex_Charles 7 years, 4 months ago
It's hilarious to see how in both of these administrations there are conflicts of interests. Just fix this fucking country. I really don't give a crap about what an alleged (and formerly accused) rapist has to say nor do I honestly give a shit about this feud between the PLP and the FNM. Get this in order goddamn it!
TalRussell 7 years, 4 months ago
Comrades! The belief that your voiced 'personal' views and intended objectives prior to May 10, 2017 - can exist side by side whilst serving as a crown cabinet minister - MUST remain subject to open and transparent public discussions.
After all - isn't that the much promised red way to prove they're sincere about - " It's the Peoples time" - not to come on here to be hauling insults to close out discussion on a very import cabinet ethics matter - or is it going to be just more conducting the People's affairs - behind closed, policeman's secured doors?
proudloudandfnm 7 years, 4 months ago
If this is the best CFTE can do then by all means sell the property...
proudloudandfnm 7 years, 4 months ago
I'm glad Dinisio sees how important is is to get updated on Bahamar's situation.
We can use an update here in Freeport on the closed Grand Lucayan and casino.....
Economist 7 years, 4 months ago
I agree with Alex_Charles. I don't care about who did what. Tell us how you are going to fix the problem and get the occupancy rate up.
At the same time tell us where you are with the hotels in Freeport as Grand Bahama is in dire straights.
NO PAST.....JUST THE FUTURE
concerned799 7 years, 4 months ago
I wonder how the Bahamas economy would look if the Bahamas and the Caribbean as a whole depermitted all cruise ships and all the new hotels could filled up?
Alex_Charles 7 years, 4 months ago
there would be a lag in tourism that would do tremendous damage to the economy.
The_Logician 7 years, 4 months ago
You people need to pull your collective heads out of your backsides. He has been on the on the job for what, 2, 3 weeks? Running what is probably a half a billion dollar enterprise when you consider the extent of his portfolio? And you want instant answers?? Get real. Obviously NONE of you have the faintest idea of what it takes to run, direct or put in place policy for a multi-million dollar operation. If he has a Fyre Festival abortion in, say, 6 to 12 months from now, then go at it. Until then, given him (and the other ministers) the opportunity to get on top of what has been a basket case of mismanagement and/or corruption (take your pick or both) for the last 5 years.
Reality_Check 7 years, 4 months ago
Stop preaching patience! Most of the more significant and troublesome matters confronting the new government have been known for many years now. Time is of the essence in righting a ship that is seriously listing with ominous approaching storm clouds on the horizon. Minnis is not a newcomer.....he served in Ingraham's last cabinet as minister of health and as the leader and later member of the opposition under the recently deposed Christie-led government. He should be well equipped and therefore expected to hit the ground running. If he is incapable of doing so, he will quickly find himself forced to step aside and make room for a leader within the FNM who can get the job done to the satisfaction of the people. Yes indeed - It's the people's time!
ashley14 7 years, 4 months ago
Most tourists won't know the history of BahaMar, I do and will not stay there. I think about all of the corruption and Bahamians screwed out of jobs and pay. No, my money will go to other locals that deserve the business. I'm not a gambler so the casino doesn't attract me either. If I was I would go to Atlantis.
banker 7 years, 4 months ago
Not true. Several high profile weddings were scheduled to be held there on the very very first original opening day. Rooms were booked, caterers aligned the whole bit. When it all came crashing down, the travel forums, travel agent chat rooms, travel magazines and online blogs were full of the news.
Baha Mar advertised in high end magazines for the rich, and they too booked and lost their faith.
The name Baha Mar is poisoned in the travel industry, and many agents will not recommend it to their customers.
OldFort2012 7 years, 4 months ago
Anyone who has been there can see there is nothing to recommend. No original restaurants, no bars, no entertainment, no vision. One final thought: it is the tallest building in the Bahamas. There must be a wonderful view from the top floors, looking toward the Berries. So, what do they do? They put the restaurants in the basement! All there is to be said about their competence.
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