The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has just "two to three years" to upgrade Nassau's cruise port before passenger volumes start falling by five to ten percent annually, a major global operator warned yesterday.

A spokesman for Global Port Holdings, which partnered with two Bahamian entities to submit an unsolicited bid to take over Prince George Wharf's management, told Tribune Business that "bad" customer experiences and satisfaction threatened to undermine this nation's earnings from the cruise ship industry.

Noting the frequent complaints about Nassau from the major cruise lines, the Global Port Holdings spokesman pledged that its partnership with BISX-listed Arawak Port Development Company (APD) and CFAL (Colina Financial Advisors) would double cruise passenger spending from the current near-$60 per head within four to five years if given the go-ahead.

Dionisio D'Aguilar, minister of tourism and aviation, earlier this week said the Government planned to obtain bids for the cruise port's management from all-comers by opening up the process via public Request for Proposal (RFP).

Confirming Global Ports Holding's intention to bid after investing "quite a lot of money" in its efforts to-date, the spokesman told Tribune Business: "We are ready."

They added that the majority Bahamian ownership of their consortium, named Nassau Cruise Port (NCP) Ltd, was structured to deliberately target investment "by the small guy on the street" in the CFAL-created Bahamas Investment Fund (BIF).

The spokesman explained that the fund, which will own 49 percent of NCP, has a retail investor-friendly minimum investment threshold of just $1,000. And Global Ports Holding will make available a $10m credit facility, repayable over 24 months with no interest, to help finance the share ownership ambitions of ordinary Bahamians.

Emphasising the urgency for Nassau's cruise port to be upgraded, the spokesman said The Bahamas could ill-afford to delay much-needed infrastructure improvements given the significant upcoming cruise line expansions and growing competitiveness of rival Caribbean destinations.

"If nothing is done in two to three years, we wouldn't be surprised if passenger numbers start to drop by five to ten percent because the customer experience, customer satisfaction, is bad," they told Tribune Business.

"Overall it's not good customer satisfaction. That's what we hear from the cruise lines. We don't have studies in hand but are going to start doing them." Global Ports Holding currently manages 14 ports in eight countries, including the likes of Barcelona, Venice and Lisbon in Europe, and Singapore in the Far East, and the spokesman said passenger satisfaction was "over 90 percent" at each.

Nassau's high cruise passenger volumes and strategic location as the closest nation to the lines' home Florida bases represents an obvious attraction for the publicly-listed company, which is also seeking management/concession agreements to run Havana and other Caribbean cruise ports.

Its proposal with APD/CFAL promises to make Nassau its regional headquarters if selected for Prince George Wharf, with the Global Ports Holding spokesman revealing that the consortium is focused on increasing cruise passenger spending yields rather than just numbers.

"The important thing is not the number of passengers but the per diem spend by the passengers," they added. "It's around $64 right now. The goal is to get that to $120 and pretty fast; in the next five years." With 30-40 percent of cruise passengers repeat visitors, they reiterated that the creation of new and exciting tours/attractions by Bahamian entrepreneurs was also critical to this goal.

The Global Ports Holding-led consortium plans to do that by better connecting downtown Nassau and Bay Street with the cruise port by an entertainment-based waterfront park, which will be created by filling in the sea between the harbourfront and first pier.

Outlining their strategy in the 49-page document obtained by Tribune Business, they said: "The current limited port infrastructure and the passenger's experience at the port arrival limits the growth and decreases the customer's satisfaction, respectively.

"Both aspects have damaged the image of Nassau as a cruise destination. The opening of new call options and infrastructure improvements in the Caribbean region... obliges Nassau to make the necessary investments if it wants to keep its leading position in the Caribbean cruise industry.

"The project aims at positively repositioning Nassau both to consumers and the cruise lines. The immediate term goal will be ensuring that cruise line expectations match those of the local community, while the long-term objective will be to reposition Nassau as a must-call port among Caribbean itineraries."

The Bahamas, until Cuba's opening up, long held a strategic advantage as it was the only destination where cruise lines could fulfill the US Jones Act's requirements for three and four-night cruises. This required foreign-flagged cruise vessels to call at a foreign port before they could return to their Florida home ports.

Many observers believe that the Bahamas has failed to leverage this strength to extract more economic benefits from the cruise lines, which are heavily investing in their private islands - Mediterranean Shipping Company (MSC) at Ocean Cay, Royal Caribbean at Coco Cay, and Disney looking at Lighthouse Pointe - in a bid to retain more monies for themselves.

The Global Port Holdings spokesman, meanwhile, said their proposal was structured to maximise Bahamian participation and ownership in the transformation of Nassau's cruise port through the CFAL-created fund.

"There are two factors to make sure the country benefits out of it," they said, "not only by increased spending but by becoming a shareholder with a voice in NCP so they can financially benefit.

"I'm not talking about large, well-to-do people. I'm talking about the small guy on the street." Shareholders who avail themselves of Global Ports Holding's credit line will pay back the loan through dividends, ultimately giving them free and clear ownership of equity in NCP.

"The core shareholder is the retail guy, the $1,000 guy," the spokesman said. "The BIF is the core shareholder. That's the way for us to process everything smoothly. A happy Bahamian means a happy government, and a happy government means we are happy as well. If Bahamians are unhappy, the Government is unhappy, and so are we. It's a chain reaction.

"The primary goal is to make sure Bahamians are happy. The secondary goal is to make cruise passengers happy, and then the cruise lines will be happy. That's the way we structure satisfaction."