The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Marketing Freeport as a sports tourism destination is a 'Plan B' strategy if the Grand Lucayan fails to re-open, a Cabinet Minister yesterday admitting the city needs "something transformational".

Dionisio D'Aguilar, minister of tourism, told Tribune Business that re-opening Freeport's 'anchor' resort property - either under existing or new ownership - was "the quickest" way to revive the city's tourism industry.

But, should a sale or re-opening fail to materialise, Mr D'Aguilar said Ministry of Tourism officials believed they could exploit Grand Bahama's proximity to the US to position the island as a destination for sporting tournaments, health and wellness, and training camps.

He added that the Minnis administration was moving "with enormous energy and enormous haste" to resolve the Grand Lucayan situation but, indicating that no resolution has been reached, described the property's fate as "a work in progress".

With 59 per cent of Grand Bahama's hotel room inventory still off-limits almost nine months after Hurricane Matthew's passage, Mr D'Aguilar said the island's accommodation supply shortages were preventing the Ministry of Tourism from executing on its marketing strategy.

"The problem with Grand Bahama is that we don't have any rooms," he told Tribune Business. "In excess of 50 per cent of the rooms are out of commission. It's very hard to grow Freeport without supply.

"The issue in Freeport right now is supply. We need to get supply up. That requires a deal; that a deal is completed for someone to take over the Grand Lucayan, bring in recognised operating brands and get airlift in there.

"We haven't got to the issue of marketing yet. While we can market Freeport as a destination, you're operating with less than 50 per cent of your current room inventory, and that's killing you."

Mr D'Aguilar said the Government was seeking a Grand Lucayan purchaser with the ability to attract recognised hotel and casino brand operators, and the necessary airlift to fill its room inventory.

"It's critical to get a deal as quickly as possible from someone who wants to own and operate it," he acknowledged to Tribune Business. "Someone needs to purchase it, get operators to operate it, and get airlift in there to fill the hotel.

"The Government would like a deal where all these issues are addressed. One, someone to buy it, then flag it with operators who are experienced in hotel and casino operations, and are well known, and get airlift in there. That's the quickest way to get people employed and the destination moving."

Hutchison Whampoa's property arm, Cheung Kong Property Holdings, into which the Grand Lucayan was spun, initiated a formal process to sell the resort prior to Hurricane Matthew.

Tribune Business exclusively revealed earlier this year that the Toronto-based developer, the Wynn Group, emerged from that process as the front-runner to acquire the resort. Its plans included branding an expanded casino under the Hard Rock label; the construction of two new condo hotel towers; and a potential tie-up with former Memories operator, Sunwing.

Perry Christie announced before the May 10 general election that a Letter of Intent (LOI) had been signed between Wynn and CK Property Holdings for the Grand Lucayan's sale, but little concrete progress towards closing a deal appears to have been made since then.

Bradley Roberts, the Progressive Liberal Party's (PLP) chairman, accused the Government of "being eerily silent" on the Grand Lucayan situation.

He said in a late Sunday evening statement: "With all the hurting and suffering going on in Grand Bahama, conventional wisdom dictates that the expeditious completion of this agreement and getting these hotels open and operational should be a top priority for the Minnis government but, alas, their silence is deafening.

"That sales agreement is in the final stages of negotiations with the Canadian investment group headed by Steve Wynn, where an agreement has been signed and a deposit made. Is Minnis seeking to dishonestly shaft the Wynn Group and, under the cloak of darkness - and in an underhanded and devious manner - double cross the Wynn Group and steer that Freeport hotel deal into the waiting arms of Sarkis Izmirlian as an election payback?"

Several sources had suggested to Tribune Business that Mr Izmirlian had been asked by the Government to look at the Grand Lucayan hotel. However, contacts close to the original developer dismissed such assertions, and his weekend press release indicates he is firmly focused on Baha Mar.

However, other Tribune Business sources confirmed that Wynn has been seeking other investors and joint venture partners to help share the financial risk/burden, raising questions as to whether it has the necessary financing in place to complete a purchase and execute on its plans.

High-level Minnis administration contacts have also confirmed to this newspaper that the Government is talking to at least two other parties besides Wynn in relation to the Grand Lucayan.

"The Government is moving with enormous energy and enormous haste to close a deal," Mr D'Aguilar reassured yesterday. "That's our primary focus, but a deal is always a work in progress.

"There are persons interested and at the table, but it's difficult. We are expending a lot of energy to try and get something done because we understand the urgency of the situation."

Mr D'Aguilar declined to provide specifics on the Grand Lucayan sale's progress, referring this newspaper to Kwasi Thompson, minister of state for Grand Bahama. Mr Thompson last week also failed to provide details, although he - like his fellow Cabinet minister - underscored that the Government understood the need for urgency given the continued deterioration of Freeport's economy and society.

The Minister of Tourism, meanwhile, disclosed that the Freeport element of the Government's 'three-pronged' tourism marketing strategy was a 'Plan B' or fall-back strategy should the Grand Lucayan remain closed.

"That's the quickest and fastest way to do it. A deal would be ideal," Mr D'Aguilar said. "If not, we're trying to create downtown Freeport as a mecca for training camps, soccer tournaments.

"We're going to have to make some investments in that regard, but we have to have a Plan B and other ideas bouncing around."

He explained that Ministry of Tourism officials felt they could capitalise on the Bahamas' US proximity to attract sporting events and teams to the island, although this would require existing facilities to be upgraded.

"The quickest shot is Plan A," the Minister reiterated of the Grand Lucayan, "but if that doesn't work, what happens next? The Ministry of Tourism officials feel Freeport can be a sports tourism centre, and we're going to start moving in that direction.

"Freeport is in urgent need of help. The PLP left it in an appalling state. We're 40 days in. The Ministry of Tourism, in the absence of a large deal and a financially-constrained government, feel this is the best route to take. I don't disagree with it."

Mr D'Aguilar warned that Freeport's recovery would not take place overnight, and acknowledged: "The people down there are hurting bad, bad, bad.

"We hear the hue and cry. Freeport is an essential but difficult nut to crack, and we need to do something transformative to get that place going down there.

"Everything about Freeport is in a bloody mess. We have a tourism sector in enormous pain following the hurricane, and Hutchison Whampoa is seemingly not interested in resuscitating that property."