The Tribune

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By HUBERT EDWARDS

As keen observers of the economic activities of the country, we tend to pay special attention to developing trends, carefully analyse stated economic opportunities and seek to understand potential longer term economic ramifications of whatever is being discussed or assessed. Often some of the conversations around developments are abstract and narrowly focused without ultimately taking into consideration the need for new means of scaling for economic growth and the impacts thereof on the lives of the people from a financial, social and standard of living perspective. Beyond the immediacy of jobs and revenue there should always be an overarching question as to whether the decisions being taken are advancing the growth potential of the country. The development of the Bahamian economy demands consistent holistic consideration of the pros and cons at play and an intellectually honest and balanced assessment of the tradeoffs necessary to achieve those ends.

According to the World Bank, “the Caribbean is expected to see moderate economic growth in 2025, with most forecasts projecting around 3.9% growth, primarily driven by the continued expansion of the tourism sector” This contrasts sharply with the expectation for the Bahamas, by multiple international agencies and the Government’s own projections, being below 2%, indicative of the need for new models which could be market shifting and will positively affect the growth potential of the economy. The Bahamas Ministry of Tourism, Investments & Aviation invests millions of dollars each year to attract visitors to our shores. The traditional markets are well known and significantly exploited.

The tourism product has and continues to experience a somewhat disruptive shift, from an earnings perspective. Diversification within the sector demands consideration of variations in the product offering which not only serve as a model for future eco-friendly and sustainable development but with the ability to appeal to brand new markets and with a view of becoming competitive within appealing non-traditional segments of the tourism market. This is underlined by the World Bank Group’s chief economist and senior vice president, Indermit Gill, who stated that “Four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying.” He goes on to highlight the fact that “…growth is at lower levels than before 2020…Developing economies will have to find ways to encourage private investment, reduce public debt, and improve education, health, and basic infrastructure” Contextually, this defines the future economic path for The Bahamas.

Assessment of the project

To that end, we were asked to review and express a view on the Rosewood Exuma project that is proposed to be developed on Sampson Cay, Exuma. Having regard for previously made public statements I considered the request very carefully. I understand why the location was selected. The allure of the Exumas is undeniable - its pristine waters, unique culture, and extraordinary biodiversity draw visitors from around the globe. In analysing the issues, I took into consideration the fact that a global luxury brand like Rosewood Hotels and Resorts, with a significant brand reputation at risk, must have been convinced of the benefit of associating its name with the effort. While this presented a starting point, fundamentally, the approach taken was to seek to understand what the real impact would be on the environment, the tourism industry, the local economy, and the people within the immediate environs of the project, those who will seek employment or seek to plug into the spin-off economic activities of the project will undoubtedly create. The decision to express any view was based on one critical condition: access to detailed information about the project’s economic, environmental, and community impact. We took an analytic approach to assessing the information and formed an opinion based on the information presented.

Direct and indirect economic impact

Rosewood Exuma is proposed to be a $200m investment, and it is projected to create 500 jobs for Bahamians, including 150 permanent positions during operations. An economic impact report from Tourism Economics, an Oxford Economics company, states that over the next 20 years, this project is expected to inject $336m in additional wages into the economy, enhancing disposable income and stimulating spending across retail, food services, and related industries.

The construction phase is expected to emphasize local sourcing for goods and services, channeling immediate benefits to Bahamian suppliers. Once operational, the resort’s estimated 5,500 annual visitors are expected to contribute significantly to local businesses in hospitality, transportation, and recreation. Moreover, an estimated $176m in tax revenues is projected over two decades.

The value proposition of environmental sustainability

Based on publicly available information, the Rosewood Hotel and Resorts brand has displayed an exemplary record of environmental stewardship and has obtained a number of environmental awards and certifications. Clients pay to stay at Rosewood Hotels around the world, in part, because of their appreciation of its approach to environmental preservation. In other words, environmental sustainability is a critical part of the brand’s value. In The Bahamas, Rosewood Baha Mar has been awarded a “Preferred By Nature” certification, indicative of its in-country commitment to sustainable practices and partnerships with local producers would be expected that Rosewood Exuma would implement similar practices as it relates to the Sampson Cay project.

Addressing concerns

Understandably, valid concerns have been raised about high-density developments having a negative environmental impact. Upon reviewing the information, prepared by a very reputable engineering concern here in the Bahamas, Bron, we gleaned that less than half of the 124-acre cay will be developed. A total of 1.7 acres per unit will be developed. In terms of the density of the project this represents a ratio comparable to or better than other similar developments in The Bahamas. Based on the foregoing, having regard for stated industry standards, it is fair to say that a project executed as stated would not meet the definition of a high-density development.

There have been expressed environmental concerns about the project. This is critical to acknowledge in providing an economic perspective because much of our economy relies on the environment and the unique ecosystems as part of the overall value proposition for the tourism sector. From the information presented we generally conclude that there will be environmental impacts as a result of development. Important for the identified issues, there have been detailed mitigation measures laid out regarding the environmental impact of the development and to address the concerns of the environmental experts and the people who live in the surrounding communities. Critically these measures are subject to review and approval of governmental authorities.

The project’s environmental impact assessment report provided demonstrates what appears to be reasonable well considered mitigation measures, based on environmental studies conducted by its environmental consultants, the project’s environmental consultants, and in answer to the policies and requirements of the relevant regulatory bodies. Based on the information shared, to date, the developer’s environmental consultants have provided the Department of Environmental Planning and Protection Preservation with detailed replies regarding how environmental concerns highlighted during the public consultation will be addressed.

Community support

Community perception and support are critical for the economic performance of such projects. Beyond direct economic metrics, communities rely on the indirect economic impacts of investments. Persons in the immediate and nearby communities who will be the most impacted by the presence of the project appear to have generally embraced its possibility. The community feedback appears generally positive. Residents in Black Point have gone on record to voice their support for the possibility of jobs, training, and economic stimulation this project is expected to deliver.

Impact and growth for the future

Tourism is the moist significant contribution to the economy. Having regard to the current circumstances of the economy, growth will be dependent on diversification within the industry itself and deepening potential for impacting the local economy. Attracting visitors and expanding the offering requires increasing the room inventory. Importantly creating differentiated offering which has the ability to target elements of the American market that seek touristic services further afield is important for growth. Based on the information provided, this is a guiding vision of the project.

The stated target market of the project represents an interesting foray into a marketplace that could create a fundamental shift in the growth opportunities for environmentally sensitive areas such as presented by the Exumas. The project’s principals have secured the commitment of a luxury hotel operator with a loyal following, the expertise to deliver on the promise of bringing positive economic impact, and a proven global track record for environmental sustainability.

Against this backdrop and having reviewed the project data, reflected on the reputation of Rosewood Hotels and Resorts, and considered what seems to be genuine community support for the development, we believe this project can add to the value proposition of the country’s offering in an environmentally friendly and sustainable manner, while creating opportunities for local persons to improve their personal circumstances, both socially and financially.

• Hubert Edwards is the principal of NL Solutions Limited. He is a former banker, a fellow of the Association of Chartered Certified Accountants, and a commentator on economic issues.