The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Minister of Tourism yesterday said the Government has restructured Grand Bahama ferry/cruise ship incentive packages that previously "screwed the Bahamas".

Dionisio D'Aguilar told Tribune Business that his ministry had sought to move away from "marketing deals" where operators received a fixed, lump sum upfront to incentive packages that were linked to performance.

He explained that the Ministry of Tourism had "entered into arrangements" with Balearia, Grand Celebration/Paradise Cruises and FRS Caribbean where departure tax rebates will be based on the volume of passengers brought to Grand Bahama.

And the rebates will be greater, or 'double', for stopover passengers as opposed to 'day trippers', Mr D'Aguilar revealed, as the Ministry of Tourism sought to build a visitor base to sustain a revived tourism product based on the hoped-for Grand Lucayan purchase.

The Minister also revealed that a deal had been struck with Sunwing and its Vacation Express tour operator affiliate to resume their summer programme, which is expected to bring more than 20,000 extra visitors to Freeport.The withdrawal of that programme this year, in response to the lack of room inventory caused by the Grand Lucayan's post-Hurricane Matthew closure, cost the city 30 per cent of its summer market. Mr D'Aguilar yesterday admitted that Freeport "can't take another year like 2017" and, while optimistic that the Wynn Group will close their Grand Lucayan purchase, warned "we're not out of the woods yet".

"We're very excited about the signing of the Letter of Intent," he told Tribune Business in relation to the Grand Lucayan, "but in the meantime we've been striking deals and entering into relationships with the ferry companies; Balearia, Grand Celebration and FRS.

"The relationships we've entered into with all of them are very wise and very sound because their compensation is based on the number of passengers they bring to the island. We have struck deals so that the incentive is greater if they bring a stopover visitor than if they bring a day tripper."

Mr D'Aguilar said the ferry operators would receive a $10 per head departure tax rebate on every stopover visitor they brought to Grand Bahama, who spent at least one night in a hotel. This rebate, though, will be cut by 50 per cent to $5 for every 'day tripper' who travels to Freeport and back to south Florida the same day.

The structure is designed to ensure the ferry companies promote Freeport's wider tourism product and hotels to their passengers, thereby ensuring an increase in higher-yielding stopover visitors and rise in total tourist spend that benefits Bahamian businesses and workers.

"The ferry companies will get a rebate on the departure tax based on the type of passengers they bring," Mr D'Aguilar reiterated. "A day tripper will earn them a smaller rebate than if they bring a stopover visitor.

"In the past these companies would secure marketing deals whereby the Ministry of Tourism would give them a fixed amount, and there was no relationship between performance and pay.

"We want to incentivise them to bring as many passengers as they can, and the more they bring the more they recover, as opposed to marketing support deals. I don't like these marketing support deals because inevitably the Ministry of Tourism gets screwed and the country gets screwed," the Minister told Tribune Business.

"We're trying to move away from these fixed marketing deals that don't reward you for performance... The past deals had no relationship with passengers brought to the island. They are good deals for Freeport, and these are the future we are going to use to negotiate deals with people bringing passengers to the island."

Mr D'Aguilar said tying departure tax rebates to volumes would encourage the three ferry operators to bring more passengers to Freeport, while also "getting the stopover component of their business to grow".

He added that a further boost will come when Paradise Cruises adds a second ship between Florida and Freeport in April 2018, supporting the Grand Celebration's Christmas Eve return from hurricane relief duty in the southern Caribbean.

As for stopover airlift, Mr D'Aguilar told Tribune Business: "We've also signed a deal with Sunwing to resume a service they did not offer this year, but did in 2016, that covers the summer months from May to October.

"We're hoping they will bring in excess of 20,000 people during that period. They're your preferred stopover visitors."

Tribune Business revealed last year how Sunwing/Vacation Express's decision to withdraw from providing summer airlift cost Freeport/Grand Bahama 30 per cent of its market for that period.

The loss was described as a "devastating" blow that exacerbated the Grand Lucayan's loss and the lingering effects of Hurricane Matthew, given that the service had generated 236,000 room nights since starting in 2014.

Vacation Express brought 68,587 room nights to Grand Bahama in 2014, and peaked the following year at around 110,000, before dropping to 57,800 in 2016 - a figure influenced by Hurricane Matthew.

However, the resumption of Sunwing/Vacation Express's service will likely raise hopes that Memories is poised to return as an operator for one of the three Grand Lucayan properties, given that all three entities are part of the same group owned by the tour operator giant, TUI.

Mr D'Aguilar attributed their 2017 pull-out to the Grand Lucayan's closure and loss of 1100 rooms, accounting for 59 per cent of the island's room inventory, which left Sunwing/Vacation Express with a lack of accommodation for their clients.

He conceded, though, that despite the potential Wynn purchase and re-opening of the Grand Lucayan, Freeport's tourism product may not be back to full speed until late 2018 due to the $30-$70 million renovations required at the property.

"It needs significant renovations," Mr D'Aguilar said, "and by Christmas next year we're hoping to be ready to roll. That's the plan for Freeport. We're optimistic now there's this Letter of Intent.

"It all depends on when Freeport's room inventory comes back on stream, but 2017 was a horrible year for the city because of lack of inventory. Things can only move up from here. Freeport can't take another year like this one."

Noting that Grand Bahama elected FNM MPs to the House of Assembly, Mr D'Aguilar added: "We owe it to them to make sure they get a better deal for 2018. We're very optimistic things will improve in 2018.

"It may be a little slow at the outset, but as the year progresses things will pick up. The first hurdle is to negotiate the Heads of Agreement and re-open the Grand Lucayan. We're not out of the woods yet, but it's a first step and we're making good progress."