The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The FNM’s deputy leader fears the Government’s 2014-2015 fiscal projections will be thrown off by Baha Mar’s delayed opening, given that the mega resort’s four hotels are only likely to open fully in May at the earliest.

K P Turnquest told Tribune Business that the Christie administration’s “whole revenue forecast” was based upon Baha Mar’s successful March 27 launch - an event that will be far less spectacular than many had hoped for.

None of Baha Mar’s three branded resorts will properly open before early May, meaning that the $3.5 billion project will only impact government revenues for the final weeks of the fiscal year, which ends that month.

“From the Government’s point of view, they have to be concerned about what effect that delay is going to have on their revenues,” Mr Turnquest told Tribune Business.

“That whole forecast on revenues is based upon the successful launch of Baha Mar. We’re already almost through the first quarter, and from the looks of it, they’re [Baha Mar] going to lose much of the first half of the year.

“That will have an effect on the [Government’s] full year results expected in June.”

It is unclear, though, just how much of the Government’s 2014-2015 revenue forecast is predicated upon Baha Mar and a March 27 opening of all four of its hotels.

A more important element is likely to have been the introduction of Value-Added Tax (VAT), which is projected to generate $150 million in new revenues for the half-year to end June 30.

Still, the delayed opening of Baha Mar will do little to help the Government’s financial position, plus prospects for reducing the unemployment numbers and reviving the still-stuttering economy.

At the 2014-2015 fiscal year’s half-way point, total revenues for the period were up by 2.99 per cent or just over $20 million at $688.638 million.

The final figure, though, amounts to just 39 per cent of the Government’s full-year projected revenues, indicating that it is relying on VAT, second half ‘seasonality’ and, possibly, Baha Mar, to make up the balance.

Tribune Business reported last week that none of Baha Mar’s three branded resorts will open fully before May, with only part of the 1,000-room casino hotel set to open on March 27.

Robert Sands, Baha Mar;’s senior vice-president of government and external affairs, subsequently confirmed to Tribune Business on Friday that the “casino, resort core amenities, entertainment and recreation areas” - including the Beach Sanctuary and golf course - will be open on March 27.

He added that the Baha Mar Casino and Hotel will also be open this Friday, although it is likely to be some way short of its 1,000-room capacity.

The “public spaces” at SLS LUX at Baha Mar, Rosewood at Baha Mar and Grand Hyatt at Baha Mar will be open on March 27, Mr Sands added, with hotel rooms to “come online shortly after”.

“We are on track to have all additional areas open by our grand opening celebration in May,” he said.

Tribune Business has seen evidence showing that both SLS and Rosewood are taking room reservations consistent with a full opening for May/June 2015.

Mr Turnquest, meanwhile, said that while further delays to the opening of Baha Mar’s hotels come as little surprise, the development does little - at least in the short-term - to bolster an economy that was relying heavily on the project.

“This is what we all feared,” he told Tribune Business. “It’s not terribly unexpected, but certainly it is disappointing news.

“The Government, as well as the country, was really hopeful this project would open on time as it means so much to the recovery of the economy and government revenues.

“We trust it is a temporary setback, and they will be able to bring the expected full opening in the shortest possible time.

“It’s more important they get it right,” Mr Turnquest added, “and have the necessary infrastructure in place in time for opening, so that when they launch at 100 per cent capacity, it is the product that makes the right impression on the marketplace.”

The delayed full opening for Baha Mar’s four resorts also means they will miss the peak winter and Easter season, when Bahamian hotels generate the bulk of their revenues and profits, which carry them through the remainder of the year.

It is unknown at this particular time what impact this will have on Baha Mar, its finances and projections, but Mr Turnquest said: “It’s very difficult for them to open in the slow season.

“It’s going to be a tremendous cash drain during that critical opening period. Will it have the impact they’d like and be able to sustain their investment in a slow period.”

The FNM deputy leader, though, added that the delayed full opening might be ‘a blessing in disguise’ for Baha Mar, as this would give it more time to ensure the $3.5 billion development matched the guest experience it is portraying to potential customers.

“You don’t want to bring people to a bad show,” Mr Turnquest said. “It may be a good thing, as it will allow them to straighten out all the bugs before implementation.

“Not to be lost in this is the 5,000 jobs they were talking about, which are supposed to come on stream at Baha Mar. They are certainly going to be delayed. If you add in the school leavers coming out in June, there’s going to be some concern as to how it will offset the unemployment numbers.”

Mr Turnquest added that it was likely that the jobless figures will be flat or have declined further, given that the number of school leavers will either exceed or match the number of Baha Mar workers.

“Everyone is watching this very intently and hoping they’ll be able to bring the programme to a full start in the shortest time possible,” he said.

“It is a major undertaking, certainly a very mammoth undertaking, and we can only hope for a successful end result.”