The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar will use the former Crystal Palace Hotel and casino to train more than 3,000 potential staff for its $3.5 billion development, as it moves to structure its workforce for the late Spring 2015 opening.

Robert Sands, Baha Mar’s senior vice-president for government and external affairs, told Tribune Business that the Crystal Palace “hadn’t had paying guests for a long time”, as he explained Friday’s decision to terminate 190 employees.

The property’s appeal to visitors had been impacted “by its proximity to the construction” that has taken place on Baha Mar’s Cable Beach expansion for the past several years, and it has effectively been employed as a lodging facility for building personnel and sub-contractors working on the project.

In reality, the ‘writing had been on the wall’ for Friday’s action for some time. Baha Mar had made no secret of its plans for converting the Crystal Palace into a training facility, and had already prepared the ground through last February’s terminations of 130 Wyndham/Crystal Palace staff.

The Wyndham/Crystal Palace has not been profitable for some time, and with paying guests dwindling, it appears that Baha Mar acted to both stop the ‘financial bleeding’ as well as initiate the training phase for its $3.5 billion project.

However, ‘reading between the lines’, it appears that Friday’s terminations are also designed to ‘restructure’ Baha Mar’s workforce ahead of its recruitment of around 5,000 persons prior to the late Spring opening.

None of the terminated 190 employees appear to have been guaranteed a job, or given ‘right of first refusal’ should they apply for one, on the workforce for Baha Mar’s $3.5 billion project.

Mr Sands pointedly did not say anything on this when questioned by Tribune Business, but both he and the Baha Mar press release on the redundancies emphasised the ‘new and heightened’ standards Baha Mar and its brand partners - Hyatt, Rosewood and SLS - will demand.

“Once they meet these standards, all are welcome to reapply,” Mr Sands said.

And the press release added: “All Baha Mar employees are being held to the highest standards of performance and service that will distinguish Baha Mar as a global destination resort.

“We offered extensive additional training to all Crystal Palace employees to educate them to the luxury service standards that will be key to the new Baha Mar brand and image.

“We’re further investing in training literally thousands of future employees at the Crystal Palace facility, and we encourage all current and potential Baha Mar employees to strive for growth and professional development.”

The inference is that Baha Mar is seeking a fresh, younger, service-oriented and tech-savvy workforce that it can inculcate from scratch in the culture that both it and its operating partners will demand.

The developer has already ‘cherry picked’ the 100 workers from the former Crystal Palace staff that it wants to retain, redeploying them to its Melia Nassau Beach Hotel, which is believes can handle existing tourist demand on Cable Beach.

It thus seems that Friday’s exercise was, at least in part, a ‘workforce restructuring’ designed to shed some of the older, unionised workforce that is more ‘set in its ways’ and harder to re-train.

This was not confirmed by Baha Mar executives, though. And Mr Sands was at pains to separate Friday’s 190 redundancies at the Crystal Palace (and former Wyndham property) from the $3.5 billion Baha Mar development, saying the two were unconnected.

He said the redundancies were “a Cable Beach Resorts issue”, referring to the Baha Mar subsidiary that owns both the Melia and Wyndham/Crystal Palace properties.

“This issue has not been caused in whole or in part by anything to do with Baha Mar,” Mr Sands said. “It’s totally unrelated to any of our opening plans.”

He declined to comment on the cost of the severance package given to the affected 190 employees, or the annual salary savings that would accrue to Baha Mar, other than to say the resort owner had fulfilled all its obligations under the Employment Act.

Mr Sands said Baha Mar took the upcoming Christmas season “into consideration” when deciding to release its former staff, and said it had provided “ex-gratia” payments over and above what the law required.

The Baha Mar executive confirmed that the Crystal Palace would now be employed to train more than 3,000 potential staff, with some 360 persons enrolled in casino training already since June/July this year.

Breaking down the numbers by line function, Mr Sands said the former resort would be used to train 700 food and beverage workers; 230 culinary staff; 400 persons in housekeeping; 125 engineering staff; 120 security personnel; 85 spa staff; 720 casino workers; and 490 managerial and supervisory personnel.

“All of these people we recruit will be training in this facility as well,” Mr Sands said, adding that the Crystal Palace would train 800 graduates from Baha Mar’s Leadership Development Institute (LDI), and 600 pre-selected high school and college students.

There is no doubt, though, that Friday’s redundancies are a personal blow to those affected and their families due to the loss of income, especially with Christmas on the horizon.

And there is also a macroeconomic impact, as it counters efforts to get the Bahamas’ already stubbornly high unemployment rate down further.

Last year’s downsizing at the Wyndham still left the property’s staff per available room ratio above the industry average by 30 basis points, despite cutting the workforce by 27 per cent.

The 130 lay-offs, which were in line with the Wyndham’s 25-30 per cent room inventory reduction, were designed to reduce the resort’s losses and work towards a ‘break even’ financial position.

A senior Baha Mar executive told Tribune Business then that the resort has “consistently been unable to generate positive income for many years”.

The Wyndham at that time was left with 350 employees, and it is likely the financial drain for Baha Mar will only have worsened as paying guests declined further over the past 12-8 months.