The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

and NEIL HARTNELL

Tribune Business Editor

The Minister of Tourism yesterday said the potential sale of Freeport’s Grand Lucayan resort could mean “big things” for Grand Bahama’s if a major hotel brand is secured to operate it.

“I think what you’re looking at is the fact that Hutchison Whampoa has long held the position that the hotel was not truly within their ambit of what their specialities are, and they had long talked about the possibility of moving on and causing for the sale of the property,” Obie Wilchcombe told Tribune Business.

“I think the approach they are taking is the right approach. They have brought in a very dignified and specialised group, and they have invited brands to participate. Many brands have expressed interest already. Some of those brands will certainly submit.”

However, K P Turnquest, the Opposition’s deputy leader, questioned whether Hutchison Whampoa’s decision to exit the Grand Lucayan signalled any intent to “divest” its other Grand Bahama assets, which include equity stakes in the Freeport Container Port, Grand Bahama Development Company (DevCo), and Freeport Harbour Company (including Grand Bahama International Airport).

“I’m much more concerned about any potential other divestment by Hutchison Whampoa, or any plan they may have to further divest in Grand Bahama,” the east Grand Bahama MP told Tribune Business.

“This is a very interesting development. Another thing that comes to mind is what relationship does this delay with the Hawksbill Creek Agreement have to do with the offload of this property?

“The third thing that comes to mind is has Hutchison Whampoa lost faith in this government, and its ability and efforts to revitalise the tourism product in Grand Bahama?

“Something we also have to be concerned about is what price the property sells at, because it will give an indication of any property devaluations in Grand Bahama.”

Hutchison Whampoa and its real estate affiliate, Cheung Kong Property Holdings, have appointed HVS Capital Corporation as its adviser and manager for the sale of the 409-acre Grand Lucayan resort via a sealed bid auction on June 10, 2016.     

While Hutchison Whampoa’s preference is to sell the Grand Lucayan complex as a single transaction, bids for individual hotel, casino and other assets will be considered. It will also provide financing to “appropriate bidders” to assist any purchase.

“There is the  caveat that financing is available in the event that there is a situation, but obviously if you are going after a top brand for Grand Bahama it could mean big things for Grand Bahama and fit in with our development,” said Mr Wilchcombe.

“We don’t see this as a negative. We’re going to be working and monitoring, and obviously encouraging those brands that believe they can bring more to Grand Bahama and help Grand Bahama grow its tourism industry.”

Mr Turnquest, meanwhile, acknowledged that Hutchison Whampoa had “not done all we would like” with the Grand Lucayan.

Much, he added, would now depend on the identity of any purchaser, and whether it has the financial wherewithal, vision, strategy and Bahamian/Caribbean operating experience to turn the resort around.

“We want to make sure that they will create the kind of environment that will attract tourists and visitors to the island,” Mr Turnquest said.

“There needs to be created a reason for being, a reason to come, so whoever takes it needs to have a vision for a complementary tourism product that will help to sell the destination.”

He also suggested that Memories, the resort brand operating the 522-room property at the Grand Lucayan, was “at the table” and among the likely bidders.

Memories has leased the property for seven years from February 2014, with the option to renew for another five years. Hutchison Whampoa is said to have invested $38 million into the property since 2013, with $20 million injected into refurbishing the Memories hotel.

The Grand Lucayan Resort complex has a total of 1,271 guest rooms. The resort complex includes four hotel elements: the 10-storey, 528-room Breaker’s Cay tower; 198-room Lighthouse Pointe, newly renovated as all-inclusive; and 23 Lanai Suites - all with 12 food and beverage outlets and three swimming pools; plus the 522-room Memories Beach Resort (presently leased to a third-party operator).

Other amenities include a  40,000 square feet conference centre, including a 15,000 square feet ballroom, 16 breakout rooms, plus 50,000 square feet of outdoor function space; a 23,375 square feet casino with 25 gaming tables, 195 slot machines; a  25,000 square foot destination spa and fitness centre; two golf courses; four multi-surfaced tennis courts and approximately 15,000 square feet of retail space.

The sales website for the Grand Lucayan suggests that the Lanai Suites could be converted into a timeshare or ownership vacation product, while there is also room to add a marina.

The 6,824-yard Lucayan Golf Course has been closed since 2011.