The Tribune

By NATARIO McKENZIE

Tribune Staff Reporter

nmckenzie@tribunemedia.net

HOTEL rates on Grand Bahama are "collapsing", one resort general manager told Tribune Business yesterday, saying the Grand Lucayan was discounting its prices so low that smaller properties were finding it difficult to survive.

Magnus Alnebeck, general manager at the Pelican Bay Resort, told this newspaper that the property had been doing fine until the beginning of May.

Mr Alnebeck said: "We were doing fine up until the beginning of May, but with Grand Lucayan then going out and promoting a very low local rate, we are now seeing the effects of that for May and June.

"I see a lot of my commercial business just going to the lowest possible rate. The scenario is a little bit the same as if someone in Nassau were able to stay at Atlantis cheaper than at Comfort Suites; you could imagine what that means for Comfort Suites. That's the situation we are in."

Mr Alnebeck added: "Pelican Bay is not a tourist resort, we are more a commercial business hotel. My problem is that they are now out there promoting a local rate in the Bahamas that is extremely low and, quite frankly, probably below their cost. It's difficult to understand how they can sustain it. The rates are just collapsing here, and Grand Lucayan is working a little bit as a vacuum cleaner in trying to take all of the business that is there."

Mr Alnebeck said the Grand Lucayan's diminished visibility in the marketplace has had a negative impact on the Grand Bahama tourism sector He added: "Their visibility in the marketplace, and their ability to market themselves, is just diminishing as we go by. We all need to find a stable solution to Grand Lucayan so that they are not discounting themselves in such a way that it is impossible for smaller hotels to survive."

The Grand Lucayan resort has stunned many in the hotel/tourism industry by withdrawing from the Grand Bahama Island Tourism Board, with the Ministry of Tourism currently locked in talks to resolve the situation by June 13.

David Johnson, director-general of tourism, recently confirmed to this newspaper that the Government was locked in "serious negotiations" with the troubled Grand Lucayan and its owner, Hong Kong-based conglomerate Hutchison Whampoa, after a move that drastically slashed the Board's joint marketing/promotional budget.

The reasons for the Grand Lucayan's withdrawal from the Grand Bahama Board are still unclear at this stage. Tribune Business has made inquiries with Sherry Brooks, head of corporate affairs at the Freeport Container Port, with the hotel having been placed under the control of Hutchison's Ports group. No response has been given as yet.

But Mr Alnebeck told Tribune Business: "They wrote a letter to the Board basically resigning, and saying they were not happy with the workings of the Board, which is quite interesting because they have actually chaired the Board for a little over a year.

"The Board has always functioned in a way that everybody on the Board realised that we need to get Grand Lucayan to work. All of our other businesses and investments are totally dependent on if that hotel works."