By NEIL HARTNELL
Tribune Business Editor
The Government will be able to cut its annual $18 million subsidy of Grand Bahama’s tourism industry by 60 per cent through the Reef Village re-opening, a Cabinet minister yesterday describing the deal as “some stroke of genius”.
Khaalis Rolle, the minister of state for investments, said the beauty of the agreement involving the 400-room property, part of the Grand Lucayan, lay in the fact that the investor was a “vertically integrated” operation.
The Canada-based Sunwing Travel Group, a subsidiary of TUI, the world’s largest travel operator, is also both a hotel operator through its Blue Diamond Resorts brand and an airline.
This enables it to find the tourists, transport them and look after them once they are in the Bahamas, making it easier for Sunwing to control its costs - a key factor in operating in this nation - through having oversight of all elements involved.
Addressing a Bahamas Chamber of Commerce and Employers Confederation (BCCEC) luncheon, Mr Rolle confirmed that the Reef Village was set to re-open as a five-star Blue Diamond Resort, potentially creating up to 1,000 full-time jobs, by year-end.
“There was some stroke of genius in developing this relationship, because it’s a vertically-integrated operator,” Mr Rolle said. “I thought it was a very good deal that was struck.”
As for the benefits of the Reef Village re-opening, the minister disclosed: “This allows us to reduce the amount of subsidy that Government offers to Grand Bahama over the years.
“The early estimates reduce that subsidy by 60 per cent.”
He added that the Government currently spent $18 million annually subsidising Grand Bahama’s struggling tourism product, much of which goes to help the Grand Lucayan and its casino operation. The $10.8m saving can now be redirected to other government priorities.
Sunwing’s involvement will see more private sector dollars placed behind the marketing of the Grand Lucayan and Grand Bahama as a whole, with the resort’s performance also improving in theory.
Meanwhile, describing Freeport’s infrastructure and industrial investments as “world class”, Mr Rolle described the Container Port as “a gem of a facility”.
He argued that it gave the Bahamas the platform to develop a competitive advantage in the emerging global logistics/trade/distribution economy, describing the Container Port as the only near-US east coast facility of its kind that could leverage the Panama Canal’s expansion.
“That provides for us, particularly in the Caribbean, and this Hemisphere for that matter, a sustainable competitive advantage in the short-medium term,” Mr Rolle said.
The Bahamas Oil Refining Company (BORCO) is projecting a 20-30 per cent increase in tanker traffic when the Panama Canal expansion is complete in 2014, and believes both itself and Grand Bahama - positioned on the major shipping routes - are perfectly situated to benefit from this.
Mr Rolle echoed this theme yesterday, noting that Freeport’s harbour and Container Port were able to serve the Panamax and post-Panamax tankers now dominating the shipping industry.
“We are adequately positioned to benefit from that,” he added.
Conducting a brief tour of ongoing investment projects, Mr Rolle said the Baker’s Bay Golf & Ocean Club development on Abaco “didn’t lose a beat” during the global recession.
The developers, Discovery Land Company, had continued to invest, “and enjoyed last year $115 million of real estate sales”.
“There were only two resorts in the Caribbean during the crisis that enjoyed such success, and they are both in the Bahamas,” Mr Rolle said, in a nod to the Albany project.
Elsewhere, the $2.6 billion Baha Mar project was set to “transform Cable Beach”. Seeking to downplay the recent public rift between the Government and the developer, Mr Rolle added: “I firmly believe that at the end of the day we will enjoy a very close relationship.”
On Paradise Island, the minister said Brookfield Asset Management “has made clear their future commitment to develop the [Atlantis] property” as its new owner.
Turning to the Family Islands, Mr Rolle touted the $15 million redevelopment of The Cove property by owner Sidney Torres.
Noting that the project had been approved in June 2012, just after the Christie administration took office, Mr Rolle said The Cove had been expanded from 15 rooms to 60, with another 60 to be constructed before year-end.
Noting that The Cove re-construction had created sustainable employment for Bahamians throughout the project’s duration, the Minister added: “The quality of the property is first class”. It also stood on “a truly beautiful piece of real estate”.
Mr Rolle said the impending expansion of Eleuthera’s Coco di Mama resort, and the ongoing French Leave project at Governor’s Harbour, would create further job opportunities and economic activity for Bahamians.