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Closure Threat Forced Our Hand

Grand Lucayan

Grand Lucayan

photo

Dionisio D’Aguilar

By AVA TURNQUEST

Tribune Chief Reporter

aturnquest@tribunemedia.net

TOURISM Minister Dionisio D’Aguilar said yesterday the government was forced to act to save the Grand Lucayan hotel properties because its owner Hutchison Whampoa has been threatening to shut down the property.

Mr D’Aguilar stressed the move was “the best of a bad choice” in an “emergency” situation.

He told media outside Cabinet he personally discouraged such acquisitions as a former private sector professional, adding it was too early to tell whether the government’s purchase would increase tourism revenue for the island.

“There are so many things you need to do to correct that property,” Mr D’Aguilar said, “but you know the purchaser is threatening every day to close it and lay off all these Bahamians and to close it, and once you close it, it’s so difficult to reopen. So we’re making the best of a bad situation and we are trying as best as possible to be a kind and caring government.

“I know there are many naysayers out there. I’m from the private sector, trust me when I say I don’t want governments to buy assets like this. But the evidence is there, when we didn’t act in the past, the results were devastating. So we have to do something, we have to do something for the economy of Freeport.”

The Grand Lucayan resort, which consists of three properties, has been closed since Hurricane Matthew in 2016. Only the 200-room Lighthouse Point property re-opened in November of that year.

Another hotel on the island, the Royal Oasis Resort, was shuttered after Hurricanes Jeanne and Frances hit Grand Bahama in 2004. This had a devastating effect on the island’s economy.

When asked whether the government could afford the sale, Mr D’Aguilar insisted the government will still meet its budget targets.

“Life is about choices,” he said.

“There’s a certain amount in the budget, that we had put in the budget for the Grand Lucayan project, recognising from the outset that there would be the need to assist that project.”

The Minnis administration previously allocated $25 million in the 218-2019 budget for an equity stake in the resort.

“Is it enough, obviously not, so we’ll have to take from one area, tighten over here, but we will come in on budget,” Mr D’Aguilar said.

“I know that there are a lot of people complaining that look, we’ve jacked up our VAT, say we can’t afford this and we can’t afford that. This is like a hurricane that has blown up and so we have to deal with it. This is an emergency situation and we are just going to have to belt tighten somewhere else to ensure that we keep within the budget. So it’s tough choices, it’s not an easy decision, it’s a tough choice, I want the Bahamian people to know that.”

Prime Minister Dr Hubert Minnis is expected to make a detailed address this week explaining the government’s decision.

Dr Minnis told reporters on Saturday, failure to re-open the hotel will result in the loss of jobs for 400 workers and also unleash a ripple effect that forces the closure of stores, barbershops and other small businesses.

Yesterday, Mr D’Aguilar said: “So on the one hand if you do nothing, you run the possibility of another Royal Oasis debacle evolving. And I want to remind the Bahamian people what happened there. The government did not step forward. They were hoping to have it sold and the rest is history.

“You have a hotel that’s dead, it then had the effects of destroying the International Bazaar and it died. So there’s that decision,” he continued.

“Then there’s the decision of the government buying a hotel. The government does not want to buy a hotel. The government does not want to operate a hotel. The prime minister was chairman of the Hotel Corporation back in the day and he remembers when the government owned hotels, so this is not something that we are willingly wanting to do.

“But we feel compelled to step forward to do something. No one is willing to step forward to purchase the hotel, so the government must step in, to avoid the closure of that hotel and the economic consequences that may appear or that may happen. So it’s not a good decision, but we have to make a decision.”

“So that’s what we’re doing,” he added, “and we hope as quickly as possible to find another buyer to take it off our hands.”

Comments

proudloudandfnm 1 month ago

I wish people would stop refering to the Oasis. Oasis died for one reason and one reason only. It was an INLAND hotel in the Bahamas. As soon as a beach resort opened Oasis died. Simple as that. There is literally no chance that hotel will ever be viable again. None. Zip. Nada. The Bazaar is also dead and gone never to be a success again. Just let them die. Bulldoze them and let em fade into history. They are no longer an option. Period.

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ConchFretter 1 month ago

While I agree that we should move on from both the Oasis and the Bazaar, that hotel did not close because it was inland -- it closed because of Hurricane damage to the buildings. Both it and the Bazaar were doing fine prior to Jeanne and Frances. I agree that an inland hotel on a small island is not ideal, but there was plenty of activity at the Tower, Country Club and Casino prior to the hurricanes.

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Well_mudda_take_sic 1 month ago

Nothing but misinformation in your post.

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Alex_Charles 1 month ago

This will wreck the budget and our credit worthiness sadly. It's really like being between a rock and a dumpster fire at this point. I'd say just nationalize the damn place, but the fall out would be great... there is no good option here.

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birdiestrachan 1 month ago

The PLP worked night and day to open BAH MAR They were insulted and accused of all things. But they got it sold and opened . Now here comes their accusers who promised to sell BAH MAR but can not sell OUR LUCAYA.

The visionless, The Dumb and the dangerous. Lots of mouth, But no substance. The Bahamas is in deep trouble.

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Well_mudda_take_sic 1 month ago

Baha Mar is in big trouble - that entire property is not generating anywhere near a sustainable cash flow level.

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birdiestrachan 1 month ago

We will come in on Budget a BIG LIE. But they are masterful liars. The Truth will prevail and they will not be able to hide Facts, Perhaps they can not count.

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BahamasForBahamians 1 month ago

Hi

My business is on the brink of collapse and is at risk of being shut down.

There are several Bahamians employed there.

Can the government buy it and keep those employed on board? They really need the jobs and its in Grand Bahama.

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Well_mudda_take_sic 1 month ago

Just hold on a little longer.....Superman Minnis is in the phone booth changing....hope he remembers to wear his cape!

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Naughtydread 1 month ago

You should have taken out a BOB Loan when the PLP was in power, the good thing about those loans are you don't have to pay them back.

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BahamasForBahamians 1 month ago

Peter Turnquest recently admitted the the majority of the non-performing loans, especially to politicians, inclusive of Leslie Miller were approved during the 2007-2012 Bank of The Bahamas Board. Yes you named, it.. under an FNM administration.

That means this is a good time to come with open hands and hope for a government bail out, as i did in this post. so sit small FNM agenda pusher.

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FPO 1 month ago

We can't get the Post Office to function, electricity in our Capital hangs by a thread, we're deep in debt, the Grand Lucayan never turned a profit. This will end up as a cow for someone to milk. Unfortunately, letting it close is the best choice among a group of awful options.

If you don't want to see that, then help Hutchinson keep Lighthouse Point open. We're going to flush a bunch of money down the drain no matter what. BUT, Government ownership of anything just turns it into a slush fund.

If no private company will pay 65 million, then it isn't worth 65 million. Last week, I walked the beach in front of the hotel. It was a fabulous property - I'm so sad!

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concernedcitizen 1 month ago

Hotels are becoming a thing of the past unless its a destination resort like Atlantis ..ARBNB and hHome away is the new thing ..I deal u tourist everyday no one wants to pay for shitty service at a high price anymore and that basically what you get in Grand Bahama .Proof is in the pudding ,how come Abaco booms w very little government help and Freeport can,t fill enough room nights to be profitable ??

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BahamaLlama 1 month ago

Bahamian governments are obsessed with attempting to control the free market. Forced your hand? You were outplayed. No-one wants that hotel. The only reason to buy it is the collapse of GB will be slung around the FNM's necks at the next election. Be smart - dump the toxic debt on GBPA.

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