The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Lucayan’s chairman last night said the government-owned resort will not necessarily re-hire former staff among the 50-60 persons it is seeking to recruit for the re-opening.

Michael Scott, head of Lucayan Renewal Holdings, the special purpose vehicle (SPV) that holds the resort on the government’s behalf, told Tribune Business that the March 25 re-opening was effectively a bridge to the hoped-for conclusion of the resort’s sale to the Royal Caribbean/ITM joint venture.

“We’re not recalling people. We terminated them, and the end is the end,” he said in reference to the permanent lay-offs that occurred last summer in anticipation of the sale closing then. “We’ll be engaging in the first instance between 50-60 people.

“It all depends on the volume of business. Let’s just leave it this way; we are going to hire people, and are not going to confine our horizons to people who formally worked in the hotel. That’s as precise and firm as I’m prepared to be.”

The Lucayan Renewal Holdings Board had aimed to re-open the resort, long viewed as Freeport’s so-called “anchor property”, on February 1 but this was pushed back to the latest date of March 25 amid the wait for the Minnis Cabinet to approve the move.

Mr Scott described the re-opening of the 196-room Lighthouse Point property as a “stop-gap, interim situation designed to “get something stimulated” in terms of tourism and economic activity amid the COVID-19 pandemic.

“We had some bookings and reservations when we had planned to open at the beginning of this month, but we couldn’t get confirmation,” he added. “We had to cancel those bookings, and now we’re starting the process of marketing outreach again.”

Mr Scott’s confirmation that the Grand Lucayan is seeking fresh hires is unlikely to go down well with Obie Ferguson, the Trades Union Congress (TUC) president, with whom he clashed repeatedly after the Government acquired the resort from Hutchison Whampoa’s real estate arm in September 2018.

Mr Ferguson, who heads the Bahamas Hotel Managerial Association (BHMA), the bargaining agent for the Grand Lucayan’s former middle management staff, has previously stuck to the position that the Employment Act changes in 2017 require terminated staff to be given “first preference” when a shuttered hotel re-opens and starts hiring.

Speaking to Tribune Business yesterday, he argued that the hotel should never have been closed last summer and, in so doing, the Government “effectively” wasted several million dollars in adding to the total $11m in severance it has paid out since taking over the Grand Lucayan.

Backing the re-opening, Mr Ferguson said: “We had adopted the position that the hotel ought not to have been closed because it knocked the whole economy of Grand Bahama.”

When this newspaper pointed out that the savings from not having to pay a $1m-plus monthly subsidy to keep the Grand Lucayan operating were probably equivalent to the extra severance pay, Mr Ferguson replied: “There would have been some losses from the continuation of the hotel, yes, but the employees’ incomes and wages would have been spent in Grand Bahama.

“If the volume of business is not there it would impact on the profitability of the company, but they would have been dealing with businesses and communities in Grand Bahama. You have to take the bigger picture into consideration. There was no need to go through with that redundancy exercise.”

However, another Freeport hotelier previously warned that the Grand Lucayan’s re-opening threatens to inflict more losses on Bahamian taxpayers because it lacks the “three legs” required to sustain its revival.

Magnus Alnebeck, the nearby Pelican Bay resort’s general manager, told Tribune Business that the Government and its Grand Lucayan Board have yet to reveal whether a hotel operator has been hired to manage the property or if marketing and airlift initiatives have been readied.

While acknowledging that it was better for Freeport’s ‘anchor resort’ to be open than closed, he voiced fears its Lighthouse Point property will “just stand there because no one is coming” and cause “a big expense” for taxpayers unless these three elements are in place before February 2021.

“By itself it’s not going to bring any guests,” Mr Alnebeck said of the planned re-opening. “Grand Bahama has really been closed to the tourist market for almost four years since Hurricane Matthew. It’s a bit better that the hotel is open than closed, but opening by itself is not going to solve the problem. Having an open hotel with no guests is not the solution.

“It needs to open with the right operator and right product so there’s demand for it, there needs to be a marketing programme in place and, what is really important, is that full airlift is in place. It’s good that they’re going to open, but they need to open it right as opposed to saying let’s open it and see, especially if people are going to a destination that’s been closed down for four years more or less.

“It’s really three legs that are needed to open the hotel. The first is having an attractive product consumers like, and second, they need to market so people understand it’s open. Then you need to have the airlift and boat lift so people can get to Grand Bahama otherwise it’s just going to end up costing you money.”

Mr Alnebeck said that if an operator, marketing initiative and air/sea lift for the Grand Lucayan were in place “they haven’t been announced yet”. He added: “What would have made sense to me would be to get an operator like Sunwing or someone who knows what they’re doing, come in with airlift and a marketing plan, and get the numbers to work.

“Otherwise the danger is that the hotel opens at a big expense but it just stands there because no one is coming. It needs to be combined with a serious airlift programme and serious marketing plan. All the airlift we have for Grand Bahama at the moment is one American Airlines flight per day from Miami, Silver from Fort Lauderdale five days a week, and whatever Bahamasair flies.”