The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Royal Caribbean is targeting a 13 percent increase in passenger volumes brought to The Bahamas in 2025, it was revealed yesterday, while also aiming for completion of its Beach Club IPO early in the new year.

Philip Simon, the cruise line’s top Bahamian executive, told Tribune Business that it wants to complete the initial public offering (IPO) - which will give local investors an ownership interest in its multi-million dollar Paradise Island investment by “the beginning” of the 2025 second quarter at latest.

While providing no details on the IPO, other than to say these will be disclosed in January, he added that the cruise line is “endeavouring to do our best” to meet the budget and “very ambitious timeline” for opening the first-ever Royal Beach Club by December 2025.

Forecasting that construction work on the project, which is located on Paradise Island’s western end in the vicinity of Colonial Beach, will begin to go vertical during the 2025 first quarter, Mr Simon told this newspaper that cruise tourism “remains a very hot ticket” with Royal Caribbean bringing some two million passengers to Nassau and the wider Bahamas in 2024.

Based on his 2025 forecast, these numbers will jump to 2.26m next year for an increase of around 260,000. Mr Simon, who is president and general manager for both the Royal Beach Club project and Royal Caribbean International Bahamas, said the cruise line’s 2024 arrivals equated to a “$450m economic impact” for this nation based on per capita visitor spending and other spin-off effects.

With 2025’s projected arrivals increase part of Royal Caribbean’s “trending” towards bringing 2.5m total passengers to The Bahamas by 2027, he reiterated that the expanding customer base provides “a great opportunity” for The Bahamas to improve the visitor experience and develop new attractions/tours to increase their spending and deepen the economic impact.

Speaking after the cruise line yesterday confirmed it is targeting a December 2025 opening for the Royal Beach Club, Mr Simon told Tribune Business: “Our numbers continue to increase. It’s not just ours. It’s global in the industry. People are looking at travelling, and cruise remains a very hot ticket.

“We brought in two million passengers into The Bahamas in 2024, and that’s an economic impact of $450m. We expect a 13 percent increase in arrivals numbers in 2025. We expect to have north of 2.5m guests by 2027. Everything has been trending in this direction. We are trending towards that 2.5m-plus target by 2027.”

Mr Simon said Royal Caribbean has invested in expanding vessel capacity to The Bahamas through “the tremendous addition” of the Utopia of the Seas, which is “dedicated” to serving The Bahamas through calls on Nassau and the cruise line’s private Coco Cay destination in the Berry Islands.

However, he reiterated that The Bahamas also has to do its part to ensure it maximises the economic benefits and returns it is extracting from the increase in cruise passenger arrivals. “While we are making plans for a first-of-a-kind Beach Club at Paradise Island, we as a destination and a country are still going to have to figure out how we’re going to accommodate and entertain this growing number of arrivals,” Mr Simon said.

“I don’t think it’s a great problem but, rather, a great opportunity to figure out over the next several years how we improve the destination, improve the guest satisfaction, create new businesses and experiences that truly represent The Bahamas.

“There’s only a small number of those passengers that will be able to go to the Beach Club on Paradise Island. It’s a fixed number. It’s a good opportunity for the country and something we should be pleased about and talking about even more.” 

Royal Caribbean has repeatedly said that the daily number of passengers visiting the Royal Beach Club will be capped at no higher than 2,500-2,700. This, it said, will leave sufficient other visitors to ensure all tourism operators enjoy their share of a growing customer base, although not all are likely to agree.

As for the long-awaited Beach Club IPO, which will give Bahamian investors the opportunity to acquire an equity ownership interest in the project, Mr Simon pledged: “We’re going to make that announcement full in January in terms of the prospectus and the partner we will be using as a fund manager.

“Our goal is by the end of the first quarter, the beginning of the second quarter, to have completed the IPO.” Mr Simon’s reference to a fund manager seemingly signalled that the IPO may be structured along similar lines to the Nassau Cruise Port’s, where Bahamian investors acquired an interest in the Bahamas Investment Fund, a vehicle that holds the collective local 49 percent equity interest in that facility.

Mr Simon, though, refused to be drawn on this or confirm any details regarding the likely share price and total value of the IPO’s equity capital raise. “The main thing is we are planning to have completed the equity raise by the end of the first quarter or beginning of the second quarter,” he reiterated. “That’s what we’re looking at for 2025.:

The last proposed Royal Beach Club structure was for the cruise line to have a majority 51 percent ownership interest, with the remaining 49 percent equity stake to be split between the Government and Bahamian retail and institutional investors. The size of the Government’s interest was to be based on the value of the four Crown Land acres it was contributing to the project’s total 17 acres.

Once the value of this land was appraised, the size and value of the collective equity raise from Bahamian investors was to be determined. It was thought the IPO would take a similar form to the Nassau Cruise Port offering, where investors acquired shares in an investment/mutual fund that will own the collective local interest in the Royal Beach Club.

 Mr Simon, meanwhile, told this newspaper that Royal Caribbean aims to begin vertical construction on the Paradise Island project’s vertical structures early in the New Year. “We are still at the beginning stages of construction, moving ahead with the horizontal works,” he said.

“The site clearance has been completed. We are still doing site preparation. We have been excavating the three pools to go with the two beaches and putting up site walls; sea walls. What we call the horizontal works are well underway and we hope to begin to have the structures start to come out of the ground in the first quarter next year.” Island Site Development (ISD) is the main contractor.

As for the December 2025 opening, Mr Simon conceded it was a “very ambitious” target. He added: “We are endeavouring to do our best. We do not have a day we can waste with the project. It’s a very ambitious timeline to get it completed and open by December 2025, but that’s our objective. 

“Hopefully there are no surprises that crop up along the way, but we hope to keep the timeline and budget that the project is set for.” Royal Caribbean has already begun recruiting the Royal Beach Club’s senior management team, having already advertised the general manager, chief financial officer and director of engineering posts.

Mr Simon, who confirmed the cruise line is seeking to recruit a 100 percent Bahamian workforce, said each of these positions had sparked “a robust response” with “dozens” of highly-qualified applicants already applying. Royal Caribbean is aiming to fill these positions by February 2025, and the director of human resources position is set to be advertised next week.

Disclosing that recruitment will take place in “three waves”, Mr Simon said the Beach Club is expected to employ “hundreds”. He explained that the precise number will depend on the third-party operators that will provide much of the activities, services and support to the project.

“It’s a unique business model,” he added, revealing that Bahamian companies will have opportunities to participate “straight across the board” in areas such as entertainment; beach and sports activities; IT, engineering, logistics; waste management; environmental services; security; landscaping; and food and beverage. Mr Simon said the Beach Club’s impact will extend to potentially hundreds of companies.

“The Royal Beach Club Collection is designed for every type of family and vacationer to get everything they want out of their ideal beach day, no matter the vibe they’re looking for,” said Michael Bayley, president and chief executive, Royal Caribbean International.

“With the first-of-its-kind Royal Beach Club Paradise Island, we continue to super-serve our guests with a tailored experience at one of our most highly visited destinations, building on nearly five decades of collaboration with the community and government of The Bahamas.”