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Bahamas May Have To 'Guarantee' Extra Baha Mar Airlift

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Minister of Tourism yesterday said the Bahamas may have to offer airlines financial guarantees to generate the extra 314,000 seats required for Baha Mar, promising: "We're on top of it."

Dionisio D'Aguilar told Tribune Business that this nation may have to initially underwrite the launch of additional flights, or service to Nassau/Paradise Island from new destinations, in order to convince the airlines to meet its visitor supply needs.

While acknowledging that generating sufficient airlift to meet Baha Mar's phased opening deadlines remained a concern, Mr D'Aguilar said he was "feeling better" about the situation due to collaboration between his ministry and the Nassau/Paradise Island Promotion Board.

"I think it's going well," the Minister told this newspaper. "I received a presentation by the Nassau/Paradise Island Promotion Board where they are partnering with the Ministry of Tourism to address the problem they see exists, what additional airlift we need, and are beginning negotiations with the airlines well in advance.

"They [the airlines] plan their schedules well in advance, and we have to see where we can increase that airlift and I think we'll be successful."

Previous tourism industry projections suggest that Nassau/Paradise Island needs to attract another 314,000 airline seats annually to ensure there is sufficient visitor supply to fill Baha Mar's additional room inventory and all existing hotels.

The $4.2 billion Cable Beach development will add an extra 2,300 rooms to the destination's room inventory when it fully opens in March/April 2018, with the Rosewood's launch timed for the winter season peak.

However, Nassau/Paradise Island's airlift capacity will likely have to steadily 'ramp up' over the next eight-nine months to meet Baha Mar's phased opening timetable. Its 1,800-room Grand Hyatt property is already open, and the SLS Lux is due to come online by October/November 2017.

Concerns over the Bahamas' efforts to build the additional airlift capacity were raised last week by Atlantis's top executive, Howard Karawan, who said previous "missteps" surrounding Baha Mar - its missed opening deadlines, and subsequent Chapter 11 filing and legal battle - had made airlines wary about offering additional service due to concerns over whether the demand would actually materialise.

Mr Karawan said: "We have met with JetBlue, Southwest and other airlines. I don't think you can wait until the last minute. You have to build demand.

"You have to be out in the market usually two years in advance of opening, building that anticipation, knowledge and desire, so that when you open the demand is there. If the demand is there the airlines will come.

"Given the missteps of the past, the airlines are saying we will believe it when we see it; show us the real stuff, show us new demand. If all you are doing is taking an existing customer going to Atlantis or Sandals or someplace else and going to another hotel, that doesn't create more demand for the air seats. We need new bodies; we need new business."

Mr D'Aguilar told Tribune Business yesterday that while airlift remained a concern, he had seen sufficient evidence that the tourism industry and his ministry were "all over it".

"It's not that I'm not worried about it, but I feel better about having the matter in hand," he said. "We know what the issues are, and are discussing them with the airlines.

"When they see the demand, are aware of the demand, they will be willing to provide the additional seats. But in some areas where there's a perceived risk they will want a guarantee.

"Maybe we will have to guarantee the first one, two or six months until they see the demand," Mr D'Aguilar added. "We're aware of it, have done the maths, and know how many additional seats we have to bring in.

Comments

Well_mudda_take_sic 4 months, 1 week ago

So now we may have to borrow money to make good on guarantees we give to airlines for additional passenger seats. This is the height of lunacy. Let the China Export-Import Bank rightfully swallow all costs associated with getting the additional airlift they need as it is more so in their own interest (rather than ours) to do so! It seems we are always being called on to bear costs that others stand to profit from.

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sheeprunner12 4 months, 1 week ago

Is this a part of the secret Bahamar deal?????? .......... Or is this the Chinese CTFE putting the squeeze on our government?????? ......... CTFE may have said: Get tourists for us or we will sit empty or offer $50 rooms and suck up the few tourists that are coming here ....... That's a tough situation for DD to be in.

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killemwitdakno 4 months, 1 week ago

Hell no. How much he govt spent on this hotel already?

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Socrates 4 months, 1 week ago

MOT subsidizing air carriers to this country is nothing new. because we have govt that operate in secrecy, people just dont know. millions to carriers to fly to Freeport and elsewhere ... all of this on top of the millions annually to Bahamasair.. this need to pay carriers to come to the Bahamas is the best proof of how Bahamasair has failed these past 40+ years in one of its mandates when it was formed... they cant do it all, but by now they should have developed so as to make a meaningful contribution..

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