The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

and NEIL HARTNELL

Tribune Business Editor

The Government was yesterday urged to immediately “put some cash on the ground” in Grand Bahama, an Opposition Senator describing the island’s economy as having “hit rock bottom”.

Fred Mitchell, former foreign affairs minister, warned that “serious problems will ensue” unless Grand Bahama’s hotel plant - the former Memories resort and the majority of the Grand Lucayan - were quickly reopened.

Speaking at a press conference during which the Opposition hit back at accusations of cronyism and wasteful spending in how it awarded contracts, Mr Mitchell said the issue was nothing more than a “smokescreen” to hide the Minnis administration’s lack of policies and plans.

“Why don’t they just get to work and govern?” he asked, adding: “They need to put some cash on the ground in Grand Bahama. The economy in Grand Bahama is down to rock bottom.

“We were desperately trying to get the hotel plant up and going, get construction going and, unless some money is put on the ground in Grand Bahama, serious problems will ensue.”

Tribune Business reported earlier this week suggestions that up to 95 per cent of Port Lucaya Marketplace tenants may not survive another two months, unless the Grand Lucayan’s owner, Hutchison Whampoa’s newly spun-off property division, either sells the resort or re-opens it.

Data on Grand Bahama’s hotel industry performance for 2016 shows the impact of both Hurricane Matthew and the resort closures, plus the effect of the Canadian dollar’s decline against its US counterpart - something that affected pre-closure demand from Memories’ predominantly Canadian customers.

Room revenue for the full-year, January to December 2016, was down year-over-year by $7.87 million, or 28.55 per cent, at $19.67 million compared to $27.57 million in 2015.

All other key indicators were off, with room nights sold down 25.52 per cent or 106,781 at 311,697. Grand Bahama hotels’ average occupancy rate was off by 13.62 percentage points year-over-year, standing at 51.81 per cent compared to 65.43 per cent.

Rooms available for the full-year dropped from 639,588 to 601,579 - a decline of 38,009 or 5.94 per cent. And average daily room rates (ADRs) fell by $2.68 or 4.07 per cent, hitting $63.20 compared to $65.88.

Senator Kwasi Thompson, minister of state for Grand Bahama, recently told Tribune Business that the Minnis administration was “painfully aware” of the devastating economic and social consequences resulting from the loss of more than 1,000 hotel rooms on Grand Bahama.

He said the Government was doing “all it can” to get the Grand Lucayan resort and associated amenities open as rapidly as possible, adding that it had inherited the situation from the former Christie administration. He confirmed that the Grand Lucayan’s proposed sale to Canadian-based real estate developer, the Wynn Group, had not closed prior to the May 10 general election despite the ‘Letter of Intent’ that was much-touted by the former government.

“The redevelopment and reopening of the Lucayan Strip is a major priority - not just for my office in Grand Bahama, but I believe it is a national priority,” Mr Thompson told Tribune Business.

“It is vital that we bring back economic activity to that strip, including the Port Lucaya Marketplace. Grand Bahama needs this hotel to be open, and it needs our people to be employed without question.”

He added: “The closure has had a major effect on our tourism product in Grand Bahama. We have a sense of urgency because we knew before we came to office that Grand Bahamians were suffering. They elected us for this reason.

“The Government is painfully aware of the situation. I live here and see the effects every day. It is what motivates us to work without ceasing to bring relief.”

The Minnis administration has placed Grand Bahama and Freeport at the centre of its plans to revive the Bahamian economy, unveiling plans to target specific tourism niches, the film/TV industry and financial services as growth opportunities for the island.

However, these initiatives are all longer term, and there are signs that the new government’s ‘honeymoon period’ may already be wearing off in Freeport unless it can rapidly resolve the Grand Lucayan’s closure and associated problems.