By NEIL HARTNELL
Tribune Business Editor
Baha Mar’s new owner yesterday said it is forming its own company to operate the project’s casino, and does not seen gaming junkets as “a critical market for us”.
Graeme Davis, president of Chow Tai Fook Enterprises (CTFE) Bahamian subsidiary, told Tribune Business that the Hong Kong-headquartered conglomerate is creating “a new entity” specifically to manage Baha Mar’s 100,000 square foot casino, the largest in the Caribbean.”
“We’re operating the casino ourselves, through CTFE, one of our subsidiaries,” Mr Davis revealed to this newspaper, emphasising that CTFE was hiring a “world class leadership” team to manage both that facility and Baha Mar’s hotels.
CTFE’s casino management structure thus appears to be little different from that of previous developer, Sarkis Izmirlian, who had engaged a management firm to operate the facility under Baha Mar’s own brand name.
The casino’s performance will be key to CTFE’s Baha Mar success, given the facility’s size and central location within the resort campus, with all hotels spinning off from it.
Mr Davis yesterday distanced CTFE’s plans from the Macau casino industry model, telling Tribune Business that Baha Mar’s gaming business model would not be focused on junkets - parties of gambling high-rollers put together by promoters.
These have been increasingly viewed as susceptible to money laundering, but Mr Davis told Tribune Business: “We certainly don’t see junkets as a critical market for us.
“We are certainly going to be focused more on mass gaming, premier gaming and VIP gaming. Our first approach is to ensure we operate in an exceptional way for the casino operations, provide that experience for gaming and hotel guests, and ramp up our marketing efforts and approach across the globe.”
Mr Davis added that the casino would “absolutely be a Baha Mar experience”, and said: “It will certainly be an iconic experience.
“It’s a world-class facility, it’s stunning, and has the connections to gaming clients from around the world.”
The CTFE executive added that Baha Mar’s casino was comparable to “anything in Las Vegas”, and had the added advantage of being located in the Bahamas’ tropical destination.
Mr Davis declined to comment on the price CTFE has paid the China Export-Import Bank to purchase Baha Mar, or how it was selected as the buyer when it did not enter the formal sales process run by the Deloitte & Touche receivers.
He also declined to discuss the value and nature of the investment incentives CTFE had obtained or was seeking, including whether it will pay the 10 per cent ‘transfer tax’ on the sales price, citing commercial confidentiality and the fact some details were still being discussed with the Government and China Export-Import Bank, respectively.
Mr Davis, though, confirmed that CTFE would retain the Baha Mar brand and name, believing it had not been tarnished beyond repair by the missed March 2015 opening and subsequent reservation cancellations.
He added that the new owner, together with its resort brand partners, Grand Hyatt, SLS and Rosewood, had the marketing ability to repair any damage.
“We believe there’s tremendous brand equity in Baha Mar as a destination brand,” Mr Davis told Tribune Business. “We’re very confident, with our global brand partners that we’re currently in discussion with, that we’ll create a significant brand opportunity between them and ourselves.
“We will be very thoughtful on our opening plan to ensure the guest experience is exceptional. We’ll be taking reservations based on the temporary certificate of occupancy, which is being worked on. We’re confident in the opening dates.
“When you talk about brand damage, people have short memories. When it comes to Baha Mar, it didn’t open, yes, but there’s a tremendous amount of anticipation and excitement for the brand to open.”
Mr Davis said “most” of Baha Mar’s existing retail and restaurant tenants, who have invested millions of dollars in their operations, would be retained under CTFE’s ownership.
He added that the new owner had met “with most of the local Bahamian partners”, and new lease agreements would be signed with them.
Mr Davis said there were no current plans to incorporate CTFE’s Chow Tai Fook Jewellery Group, an $8 billion business with some 2,460 stores in Asia, into the Baha Mar retail mix despite the obvious synergies.
“It’s premature to talk through the strategies of Chow Tai Fook Jewellery,” he told Tribune Business. “We have no immediate plans to bring in Chow Tai Fook Jewellery.”
Mr Davis said CTFE was seeking to recruit “the best and brightest that the Bahamas has to offer us”, adding that the developer was seeking persons with expertise, experience, personality and attitude for the thousands of jobs that will come on stream, starting with the recruitment of 1,500 in the 2017 New Year.
He indicated, though, that the 2,000 former employees released in late 2015 would not be given an automatic first preference on available jobs.
And the CTFE executive expressed optimism that, once Baha Mar comes fully on stream, it will grow rather than split the Bahamian tourism market with Atlantis, as some have feared.
“We certainly want to collaborate and grow the destination as a whole,” he added. “Similar to Las Vegas, as you build more iconic destination resorts, it grows the overall market.
“We expect to do the same. We feel we’re a different product [from Atlantis], and we expect fully to grow the market together.”
Mr Davis, who as regional head for Starwood, and then Rosewood, has been involved with Baha Mar himself for more than a decade (via the resort brands), said CTFE was currently “master planning” potential uses for the Crystal Palace casino site, plus Long Cay.
He suggested these were likely to include additional family amenities and entertainment venues, plus residential and resort ownership opportunities such as timeshare.
Promising that CTFE would invest “tens of millions” in Baha Mar pre-opening activities, Mr Davis said it had the necessary resources and expertise to “manage through the soft opening and ramping up” into the winter 2017-2018 season.
“We believe further investment will continue to unlock the value of the project,” he told Tribune Business, “and we are confident in its future success. We understand the challenges of operating in the Caribbean environment.”