The Tribune

• Hotelier concern at early GB airport close

• Doesn’t signal ‘we’re ready for business’

• Hotel buyer must have Kerzner impact

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to fix “the low hanging fruit” by ensuring Grand Bahama International Airport remains open beyond 6pm while it moves to close the sale of the island’s major resort.

Magnus Alnebeck, Pelican Bay’s general manager, told Tribune Business that the airport’s early closure was creating inconvenience and concern - especially for the island’s corporate visitors and travellers - while failing to “send a signal that we are ready for business”.

Questioning why “one of The Bahamas’ major airports is the only one that closes at 6pm” despite the post-Dorian restoration of its night lights, with those in remoter Family Islands staying open longer, he suggested the situation may be a legacy of the operating situation that existed under its previous owner, the combination of Hutchison Whampoa and the Grand Bahama Port Authority’s (GBPA) Port Group Ltd.

Agreeing that the Grand Lucayan’s prospective purchaser, Electra America Hospitality Group, must do for Freeport what Sol Kerzner achieved on Paradise Island in the early to mid-1990s, Mr Alnebeck told this newspaper: “We need some action in Grand Bahama, but at the same time we have some low-hanging fruit we can address immediately.

“I think we have the only airport in The Bahamas that closes at 6pm, and nobody has explained why. It used to be 9pm-10pm until Hurricane Dorian came and we lost the lights, but now they’re back and nobody can explain the early closure. Even in the small Family Islands it’s a dawn to dusk operation.”

Mr Alnebeck said the situation was impacting private aviation traffic in particular, with international arrivals as well as those who have to journey to Nassau, needing to be “wheels down” before 6pm. Commercial aviation is also enduring reduced operating hours as a result.

“People flying back and forth on private planes are having a big problem with this, and people coming in to attend meetings are asking why the airport is closed at 6pm,” he told Tribune Business. “We’re getting that from businesspeople who have been coming in since Hurricane Dorian two-and-half years ago. 

“The lights aren’t even an issue. We should at least be open dawn to dusk. It doesn’t make any sense. While we’re waiting for big things to happen, let’s address the small things.” The Government, via the Airport Authority, acquired Grand Bahama International Airport from Hutchison Whampoa and Port Group Ltd for a nominal $1 under the former Minnis administration.

However, the Government’s (taxpayer) share of the severance paid to then-airport staff was around $1m, and as part of the deal’s terms, it allowed the former owners to depart while retaining a multi-million Hurricane Dorian insurance claim payout that sources suggested was worth up to $25m. None of these proceeds was invested in restoring the Dorian-devastated airport.

Since taking office on September 17, 2021, the Davis administration has focused on near-term repairs at Grand Bahama International Airport. It has moved to acquire generators and a new elevator for the control tower, plus make further upgrades to the latter, while also improving the working conditions for staff and the numerous government agencies that are stationed at the gateway.

These upgrades are due to be installed imminently, but the Government has made no mention of the early closure concerns raised by Mr Alnebeck. It has moved to secure the airport’s long-term future, in preparation for upcoming tourism investments, by launching the pre-qualification phase of a bid process seeking a private sector partner to finance and oversee a post-Dorian transformation as well as manage the facility. Early 29025 is being targeted for the first phase of a revived airport. 

Mr Alnebeck said the hours’ issue was likely “a left over from the previous airport owners [Hutchison] who were more focused on saving costs than building a destination, and since the Government took it over they were probably not really able to focus on it.

“It seems odd that one of the major airports in The Bahamas is the only one that closes at 6pm,” he added. “People coming to attend meetings or flying from Nassau are wondering why there is such an early closure. If we want to send a signal we are ready for business - it’s not big numbers coming in at the moment - we should have an airport that is at least open as long as North Eleuthera and Marsh Harbour.”

Meanwhile, Florida-headquartered Electra America is to acquire the Grand Lucayan for $100m. It plans to invest some $300m in transforming the property via a project billed as creating 2,000 construction jobs (likely spread over the duration of the building phase) and 1,000 full-time posts.

The buyer has agreed a Memorandum of Understanding (MoU) with the Government and will pay a $5m deposit once a sales agreement is signed. That deposit becomes non-refundable after a 60-day due diligence period closes, with the $95m balance to be paid within 120 days of the MoU signing.

Mr Alnebeck said it was too early to judge Electra America’s plans, or its chances of success, but agreed that its impact on the Grand Lucayan and Freeport needed to be the equivalent of what Sir Sol Kerzner achieved for Nassau/Paradise Island with Atlantis.

“It’s 1,300 rooms in a destination that, today, I think is struggling to have 400 hotel rooms open,” he added of the Grand Lucayan. “Whoever comes in has to be the driver of the destination, be the one that takes it on and pulls it in the right direction. It’s very similar to what happened on Paradise Island in the early 1990s, when everything was a bit of a mess there.

“I’m not sure whether what worked 30 years ago will work now, but all we can do is help, hope and work hard. Sometimes we get so pre-occupied by the dollar amount. I keep saying the biggest amount that has been invested in the tourism industry in Grand Bahama in the last 20 years was $120m in the Ginn project and look what we got for that.”

Electra America’s plans rely on bringing in brand names to flag and operate its three resorts, casino and golf and country club. However, Mr Alnebeck said the best fits may not be internationally-known resort names, pointing to the Grand Lucayan’s failure under the Westin and Sheraton brands as well as the fate of the Four Seasons Emerald Bay.

The latter was rescued by Sandals, with the Pelican Bay chief again pointing to what Sir Sol achieved with Atlantis. “It needs the right brand for the destination,” he added. “When Sir Sol came to Nassau nobody knew of Atlantis; that was a brand he created. Maybe there’s a brand being created that really fits. That’s always the challenge; to make sure it works.

“That becomes more an owner issue than a brand issue since they’re [the brand] just interested in making money and have no equity interest whatsoever. The good owner makes sure they get the right brand. It may not be the most internationally-known brand; it may be their own brand. Pelican Bay is its own brand, and we’re one of the hotels on Grand Bahama that has survived.”

Three resort properties have been detailed by Electra America. A four to five-star branded luxury lifestyle hotel, featuring 198 rooms and 24 villas and targeted at corporate and leisure business; a four-star convention hotel with 535 rooms, featuring an amphitheatre and convention centre; and a 257-room condo-hotel style family resort with suites that are double the size of the Grand Lucayan’s existing rooms.