The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government is aiming to close "fluid" negotiations for the Grand Lucayan's sale by year-end, as its chairman hit out at the "shocking" state of Grand Bahama's main airport.

Michael Scott compared the facility's current appearance to a "Red Cross relief shelter" even amid hopes that US aviation regulators will today give the all-clear for it to begin receiving international commercial flights.

He confirmed that the absence of meaningful airlift was impacting occupancies and business prospects for the Grand Lucayan, as well as other Freeport resorts that have opened post-Hurricane Dorian, although the property's performance had been "significantly" better under the government than former owner, Hutchison Whampoa.

The Grand Lucayan chairman added that while there was "a lot of talk and noise" on restoring the Grand Bahama International Airport to its pre-storm condition, more action was required to make this happen.

"We're trying to get a signing of the documents by the end of the year, within the next two weeks," Mr Scott revealed in relation to the Grand Lucayan's sale to the ITM Group/Royal Caribbean joint venture.

"There's a lot of things that are fluid right now, so I can't say too much. The aim is to get everything done by the end of the year." The Royal Caribbean/ITM project, which involves the creation of some 2,000 jobs via a $195m first phase investment that includes the resort purchase price, is among the projects the Government is banking on to revive the Bahamian economy post-Dorian and return it to 2.1 percent growth by 2021.

"The project is poised to act as an economic stimulus to Grand Bahama, bringing approximately two million passengers annually to make use of the associated facilities which will include a five-star hotel property, water-based family entertainment, as well as dining, gaming and other entertainment options," the Government's just-released Fiscal Strategy Report said.

"The additional cruise passengers will also present an opportunity for local vendors, taxi drivers, arts and crafts artisans and other souvenir businesses to benefit from increased sales. Negotiations to finalise this sale are expected to be completed by end-2019."

The Government is also likely to be extremely eager to exit the resort ownership business, and get the Grand Lucayan off its books, given the $43m that it pumped into the hotel to cover its operating losses and other costs during the 2018-2019 fiscal year.

Selling it will also reduce its contingent liabilities by some $35m. While the $65m purchase price may not recover the Government's entire Grand Lucayan outlay upfront, it will be hoping that the increased economic activity and extra employment created by the Royal Caribbean/ITM project will more than offset this on the back end.

The ITM/Royal Caribbean project was branded "a game changer" for Freeport's economy when revealed by this newspaper earlier this year, as it promises a revival of the tourism industry that could - together with Carnival's $100m cruise port - help drag the city out of a 15-year slump.

Mr Scott, meanwhile, confirmed that the Grand Lucayan's present occupancy levels at the 196-room Lighthouse Point - the only part of the complex currently open - were "off" due to Grand Bahama International Airport's inability to accept international flights.

"Until we get this situation resolved and get the airport back up and running as soon as possible, and pass muster with the FAA and TSA (US aviation regulators) it's not going to be business as usual," he told Tribune Business.

"It's a critical situation, and the Government is going to have to take the initiative in dealing with both Hutchison and the families. I hear a lot of talk but don't see a lot of action."

Mr Scott said the airport would have to rebuilt within the 21-24 month construction timeline envisaged by Royal Caribbean/ITM for redeveloping Freeport harbour and the Grand Lucayan, whether by the current ownership or the Government "stepping in to take control of this dismal current state of affairs".

"The airport is obviously of great concern," he added. "The other point I would make, and it's shocking to me, is we've heard noise from the families (the Haywards and St Georges, owners of the Grand Bahama Port Authority) about how they're really working overtime to get the airport up, but I think that's just noise.

"They're not approaching it with the degree of urgency, seriousness and real progress on the ground given that we're in mid-December and that hurricane happened three-and-a-half months ago. From my perspective it's absolutely shocking. There are a number of initiatives that are going to have to be taken by the Government, but I will not - and should not - comment on those."

Mr Scott said it was "a fact" that the Grand Lucayan had performed "significantly" better under government ownership than Hutchison Whampoa's over the past 15 months, given that the latter was "never interested in running a resort operation".