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No Plans Provided By Grand Lucayan Buyer

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Cabinet minister yesterday said that while the Christie administration reached an agreement for the Grand Lucayan's sale, the potential buyer had not presented plans for the hotel and casino operations.

Kwasi Thompson, minister of state for Grand Bahama, pledged that the resort's redevelopment and reopening was a "national priority", adding that the Minnis administration had made "progress" on the sale.

"It is vital that we bring back economic activity to that strip, including the Port Lucaya Marketplace," Mr Thompson said. "The first priority of our vision plan is to bring life back to the Lucayan strip.

"The former government announced just prior to the election that a deal was made for the purchase of the three-hotel strip. As it turns out, there was an agreement for the sale of the property. However, the potential buyer had not presented specific plans on management and operation of the hotels and casino."

Mr Thompson did not identify the potential purchaser, although he was likely referring to Toronto-based developer, the Wynn Group.

"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," said Mr Thompson.

Tribune Business recently reported 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.

The 409-acre Grand Lucayan Resort property consists of three hotels, with a combined total room capacity of 1,271. Two of the hotels are closed due to extensive damage caused by Hurricane Matthew last October. An unsettled insurance claim continues to delay restoration of the 500-room Breaker's Cay Hotel, and the 522-room Memories Beach Resort that was previously leased to Sunwing, which pulled out in February over failed negotiations with Hutchison Whampoa regarding hurricane restoration.

During an April election rally on Grand Bahama, former Prime Minister, Perry Christie, revealed that a Letter of iIntent for the sale and reopening of the Grand Lucayan had been signed.

Mr Thompson said yesterday: "The Government is doing all it can to complete the redevelopment. Although a sale was announced, the details of the sale and development were not completed prior to election. It is important that the hotel strip is not just sold but redeveloped and reopened for the benefit of the island. This is what this government is working diligently to ensure, that is, arriving at the best redevelopment deal."

He added: "The Government is treating this matter with urgency while it proceeds through the usual processes prior to approval. This Government has made progress on this deal. We are communicating with those involved almost on a daily basis to ensure that the Government does all it can to redevelop and re-open the hotel strip in the shortest period of time.

"The Government is very aware of the plight of the Port Lucaya tenants. We must deal with the situation that was left in place and that is exactly what we are doing. The tenants should be assured that we were elected to bring relief and will not rest until this is done."

Mr Thompson told the Senate that the Minnis adminsirtalton's vision for Grand Bahama includes "tackling the difficulties with the International Bazaar, the Royal Oasis and Xanadu. We will be working closely with the present owners. These properties should be sold to appropriate persons who have the vision and capital to develop these properties.

"We must be proactive in our approach even if it requires providing incentives and tax concessions," he added. "These are iconic locations in Grand Bahama, and until we see movement we have not fully recovered."

Comments

proudloudandfnm 1 year, 10 months ago

We are in month 10 now with no hotels and casino. If Wynn does not have a plan what about the other two buyers that are interested? AT what point will you forget Wynn and move on to the others?

This is month 10. May family and I are now committed to leaving Freeport, actually our plan it to leave the Bahamas. Nassau is not an option for us and never will be.

I would not want to be in Freeport by September. At the rate we're crashing by September the Port Lucaya area will be the next International Bazaar. When the entire Port area is a ghost town our fall will be even faster.

And obviously the FNM has no idea what to do to stop our fall.

Goodbye Bahamas, you have a very long, hard road ahead. And no government to smooth it out.....

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