By Roderick A. Simms II,
BCCEC director, Family Island Division Chairperson
There is no doubting the treasures of Eleuthera and Harbour Island, which are found in their miles of coastline, pink sand beaches, sweet pineapples and unique architecture. While rich in history, the island offers an even greater learning experience when it comes to analysing the impact of foreign direct investment (FDIs) on the Bahamas. Eleuthera and Harbour Island have caught the eye of many high net worth individuals and stopover visitors, making room for more vacation rentals and luxury real estate. Despite the Bahamas' challenges as it relates to the ease of doing business, it is still not enough to keep visitors and investors away from this tropical paradise. Now, more than ever before, is the time to take a deeper look into the economic activity and challenges facing the birthplace of our nation.
Luxury Real Estate and Vacation Rentals
Climbing the ladder of economic activity in Eleuthera and Harbour Island is the rise of boutique hotel offerings, rentals and high-end homes. In Governor's Harbour, the island's capital, properties range from anywhere between $150,000 to well over $1 million. Spanish Wells, which sits off the tip of North Eleuthera, also fits well for buyers interested in waterfront properties or picturesque island-style homes. However, this diverse price range cannot be guaranteed in Harbour Island, where offerings tend to be pricey. After all, Harbour Island is known for lifestyle activities geared towards shopping, nightlife, fashion, hotels and restaurants.
The power of the Internet, and platforms such as AirBnB, have allowed residents and property owners to turn their residential dwellings into vacation rentals. This makes up for the lack of room inventory located typically supplied by hotels and resorts. That is not to say Eleuthera does not have prosperous, open resorts. However, there has been a cycle of depression throughout the island that has left hotels and villas abandoned.
Though the economy shows some signs of improvement, there is still significant work to be done. More hotel and resort developments would be ideal because it would mean more jobs. The Bahamas' tax structure caters to investors who can potentially further revive the island's tourism product. In the interim, however, there is a story not being told about the daily struggle of locals in this diverse island economy, which is skewed towards meeting the demands of the rich and famous. Can residents really afford to live in Eleuthera?
The island is split into three parts: North, Central and South. And in each area there is much more to survival than just hospitality. But is there enough access to education surrounding opportunities such as eco-tourism, small-scale tourism ventures and conservation research?
Hotels and Resorts
Eleuthera and Harbour Island have experienced the 'highs and lows' associated with local and foreign direct investment. Yet there are no words that can truly do justice to the beauty of upscale waterfront offerings such as the French Leave Resort, Autograph Collection, Cape Eleuthera Resort and Hotel, The Cove Eleuthera or Valentines Resort on Harbour Island to name a few.
The island is no stranger to wealthy international and local investors wanting to utilise its natural beauty. And while tourism appears to be thriving after the 2008 financial crisis, history has a different story to tell. The 1980s were a time of transition for the Bahamas in terms of economic and political policies, and once-popular and exclusive resorts such as Club Med, Cape Eleuthera and Cotton Bay eventually failed to continue their operations, leaving the ruins of their former glory days to decay on prime Eleuthera properties.
Fortunately, resort-based development projects have been underway on Eleuthera in recent years. One of them is to develop a resort community at Cotton Bay, not too far from its former site.
The island's weary foreign direct investment (FDI) history has led some residents to prefer boutique hotels over large scale projects. This is a valid and favoured sentiment, since the island's economy is small and open, which makes it more investor-friendly. Eleuthera's previous experiences with large-scale foreign investment raises the question of whether or not these projects are sustainable for the island and other Family Islands.
But, to some extent, this question also has to assess the impact of poor management and political interference on these types of investments, be they large or small. There should be minimal interference from government, given that Bahamians are protected by legislation against the possible failures of medium to large-scale investments. Therefore, it is not so much about whether foreign direct investment is good or bad for the island, but how these investments are managed and whether there is enough consultation with local stakeholders.
Air Arrivals and Marinas
Boaters visiting Eleuthera have jumped from a mere 128 in 2005 to more than 2,000 last year. The island is gearing up to create a competitive edge over other popular destinations for marinas, such as Bimini, Abaco, Grand Bahama and Exuma. Harbour Island has also experienced an increase in boaters through the years, recording 310 in 2005 and growing to 859 by 2016. Eleuthera is also on the radar for offshore boaters and mixed-use accommodation visitors. Marinas are spread across the island - from Rock Sound to Spanish Wells and Harbour Island. There is definitely a market here to further tap into.
Eleuthera has three airports to facilitate airlift. Most visitors arrive at North Eleuthera Airport. This year's first quarter was a good period for the island, as it saw the arrival of more than 6,000 air arrivals in the month of March alone. These numbers highlight the need for Eleuthera's air transport system to become more integrated.
The Government is set to receive a $35 million loan from the Inter-American Development Bank (IDB) to improve four Family Island airports, inclusive of North Eleuthera. The loan is expected to tackle key areas of airport development such as lighting, runway beacons, mobile airport equipment, parking platforms and passenger terminals. The move marks one step in the right direction.
The famous Glass Window Bridge, Preacher's Cave, Hatchet Bay Cave and Boiling Hole Cave are just some sites that can be added to a long list of adventures which Eleuthera has to offer. The island is also well known for its migratory birds, which can be a huge deal for bird lovers. If that is not enough, then perhaps going down to the southern end of Rock Sound and Ocean Blue Hole will ignite a love for aquatic wonders. However, apart from the growing demands of eco-tourism, there is concern around the environmental risks and impact. For instance, some heritage sites are not well kept and not protected. Support to mitigate these risks is offered by the One Eleuthera Foundation and Cape Eleuthera Institute.
Because most of the economic activity occurs in northern Eleuthera, many observers argue that the south is being neglected, as air arrival numbers seem to indicate. In 2013, Eleuthera residents came together to oppose the $20 million sale of the 700-acre Lighthouse Point peninsula. This piece of land is considered 'a jewel of the south, and the idea of a large-scale foreign direct investment (FDI) project was rejected.
Many residents saw another, more sustainable way to revive economic activity in the south. The One Eleuthera Foundation, for example, seeks to find ways to enhance Bahamian ownership by enhancing skills and education. The Foundation's chief executive, Shaun Ingraham, has often argued that there are opportunities for small businesses centred on eco-tourism and cultural heritage.
There is no escaping the economic and social challenges facing Eleuthera. These are the same difficulties familiar to most island states. However, there is a spirit of resilience among residents combined with a vision to make Eleuthera the booming economic engine it once was. It will take time, private-public collaboration, capital and access to resources in order to achieve this task. However, it can be done. The tax incentives are there, the human capital is available, the infrastructure is in place and all procedures are geared towards incentivising local and foreign investors to get started. Whether the island is a second home, a potential location for a boutique hotel or a grocery store, or just a getaway for adventure, Eleuthera has proven that it can offer all of these things and more.