By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
A key Cabinet minister said yesterday that Morgans Hotel Group’s move to terminate its management agreement with Baha Mar was not “overly concerning”, suggesting that other brands would be “clamouring” to get on-board with the $2.6 billion development.
Khaalis Rolle, minister of state for investments, told Tribune Business: “Baha Mar represents a major development, it represents a major economic potential in the country, and it reprints a major business opportunity for multiple brands.”
Adding that he would be updated on the details yesterday afternoon, Mr Rolle added: “I don’t know that any one brand pulling out will have a medium to long-term impact. I think brands will be clamouring to get into Baha Mar, so I don’t think that’s something to be overly concerned about.
“I believe that with the quality that Baha Mar represents, and the opportunity that they represent, we will see a number of brands looking to do business with them.” Mr Rolle’s comments came after it was revealed via Internet reports published last week that the Morgans Hotel Group was moving to terminate its 20-year hotel management agreement (HMA) with Baha Mar.
Baha Mar and Morgans Hotel Group entered into the HMA on July 31, 2011, for Morgans to develop and operate the 300-room ‘Mondrian at Baha Mar’ hotel.
K. Peter Turnquest, MP for East Grand Bahama and FNM shadow minister for finance, told Tribune Business: “It would be presumptuous, I think, for us to really make any significant statement on this other than that obviously we would be concerned at this early stage that there appears to be some break down in the relationship between Baha Mar and the group.
“The success of Baha Mar is critical to the further recovery of the tourism sector as well as the economy of the Bahamas in general. It is obviously a significant concern.”
Mr Turnquest added: “Nevertheless, Baha Mar continues, as far as we are aware, to have some other notable names in terms of brands involved in the project, which we hope will keep it in good stead and progress.
“Obviously this kind of news is not welcome and does raise some concerns.” The $2.6 billion resort development, which is scheduled to open in December 2014 with a 1,000 room hotel and 100,000 square foot Las Vegas-style casino hotel as its centrepiece, will also feature a 700-room Grand Hyatt and the 200-room Rosewood Hotels & Resorts.
Back in December, the Spanish hotel brand Meli� took over the operation of the 694-room Nassau Beach Resort, formerly the Sheraton Nassau Beach Resort.
“One of the concerns I always had is the sheer scale of the project and whether they were trying to do too much at one time. I don’t know the size of this element versus the overall scope of the project, and how it fits in the business plan in terms of the sustainability of the project, but it’s something to think about. Hopefully they will be able to find a replacement,” said Mr Turnquest.
He also questioned what impact the finalisation of the Government’s contribution to the Cable Beach infrastructure works, the plan to implement VAT and Chinese financing for the project had in Morgans’ decision to pull-out of the Baha Mar development.
Comments
BahamianDiaspora 10 years ago
Yea right, who is young Rolle trying to fool. Which reputable hotel management company would want to operate when they can not secure a "non-disturbance" clause in any event of default. Come on, from the beginning Baha Mar was something that was meant for the vegas strip. These google-eyed incompetent PLPs just jump at any pie in the sky idea from foreign investors who promise to provide subservient jobs for the Bahamian folk. Another example is Ginn over in Freeport - hundred of acres of land just sitting idle and now under the portfolio of massive banks.
John 10 years ago
"Don't shoot until you can see the whites of their eyes"....so close but yet so far!~
bahamalove 10 years ago
As they say, "the Devil is in the details". It is easy to sell the 5,000 potential jobs (1/2 of the 10,000 Brave Davis promised by the way), the largest casino in the Caribbean and all the possible economic benefits to the Bahamas, but the reality is that any reputable company will read the fine print to reduce their risk to any potential failings. For a resort that is so highly leveraged with the Chinese, the Morgans Hotel Group were right to demand a 'non-disturbance agreement'. Just look at what the last recession did to Atlantis' finances. The fact is that Baha Mar represents a huge risk that may deliver in the short-term because it will be the newest thing on the block, but the long-term prospects are still uncertain. But I guess, 'no risk, no reward'.........??
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