By Roderick A. Simms II
BCCEC director and Family Island division chairperson
BACK in the late 1980s, Freeport was once known as the 'magic city'. Most people tend to remember it, and the rest of Grand Bahama, for what it once was: A lively, booming and diverse island where celebrities and Bahamians could both share the same space. However, talking about Grand Bahama in the past tense does little justice to what we see today. This island has endured natural disasters, recessions, large scale lay-offs, and numerous failures in its tourism industry. Nevertheless, it remains bursting with potential from its West End to its East End. It has some of the best infrastructure, workforce and natural resources, which can be harnessed to expand industries such as construction, manufacturing, industrial commodities, technology and tourism. Grand Bahama has the charm associated with the most beautiful islands in the Bahamas, but it is unique in its potential to become a thriving mecca for industrial, commercial and technology-driven investments.
Grand Bahama once had some of the best hotels within the Bahamas. For instance, the former Princess Resort and Royal Casino was the place to experience a taste of Bahamian culture from all hospitality angles. The International Bazar, located on the same property as the hotel, was a shopping centre and food court for Indian, Japanese, Chinese, Bahamian and African cuisine and night life. It provided a unique offering for tourists but, in 2004, after the passage of Hurricane Frances, the hotel shut down and was later sold to Harcourt Development for $33 million. The sale coincided with the global financial crisis, which deterred Harcourt from renovating and reopening the hotel. Sadly, this once-vibrant and occupied hotel now stands abandoned and surrounded the shambles of what were once structures for a booming commercial hub.
Most people like to think situations are only bad for a short while, but Grand Bahama has not been so fortunate with its tourism sector. For instance, a massive chunk of the island's room inventory was lost with the closure of the Grand Lucayan resort complex and the former Memories resort. This occurred after the passage of Hurricane Matthew in October 2016 and, since then, only one prospective buyer- Wynn Group from Canada - has surfaced in local news reports. There has still not been any official announcement regarding the sale and reopening of this resort to date.
Outside of these developments, Grand Bahama still accounts for a significant portion of sea and air arrivals to the Bahamas. The island has lost a significant amount of air arrivals from the closure of the Grand Lucayan, with airlift from Sunwing Airlines no longer available. It was also reported in a local daily that Bahamas Paradise Cruise Line's Grand Celebration, which offers a unique feature by allowing passengers to stay overnight at local resorts, has not been doing well as a result of low room inventory.
In taking a step back, we see a lot of failures in the hotel business in Grand Bahama. There are still a few that offer a beautiful and fun experience, such as Pelican Bay, Viva Wyndham Fortuna Beach and Old Bahama Bay. Let's not take for granted that Grand Bahama is a charming, awe-inspiring, peaceful, clean, friendly and welcoming island. There are eco-tourism activities such as diving, the Lucayan caves, pristine beaches and nature tours. Yet there is still something wrong with this picture. Its tourism sector has been unstable for over a decade.
It is easy to pin the blame on those in charge, but fixing Grand Bahama will take more than playing the blame game. The history of Grand Bahama shows that its economic model was not set for tourism, but more for industrial endeavours. Grand Bahama has the potential for more second home owners and vacation home rentals, but there needs to be a focus on this. What will really bring people to Grand Bahama?
For starters, in order for tourism to be successful there, the current model should be revamped. Branding is an important part of a hotel. Perhaps bringing in more popular hotel and casino brands would be a great start to putting Grand Bahama on its feet again by attracting an influx of visitors. Another option is re-examining the prospects for an all-inclusive hotel and resort on the island. Will guests really enjoy staying on the hotel grounds, or would they rather explore the island? If more activities are available, then there should be no reason for tourists not to leave their hotel rooms.
The model should also further consider the 'ease of doing business' for prospective investors. The key components that any investor eyeing Grand Bahama will look at are airlift followed by the cost of consumables. This will require tremendous collaboration between investors and government because, without subsidies for airlift, there will not be enough visitors coming to the island. The list can go on, but these are just a few factors tied to the success of the island's tourism sector. It is time to make real changes to facilitate a much-needed improvement.
While the economy of Grand Bahama is presently challenged, it could not be a better time for real estate investment. This may seem a bit tricky, as persons are leaving the island and putting their homes up for sale, while others are in foreclosure. But, if you are thinking ahead, are optimistic about the future of Grand Bahama, and want to make a great investment, then properties can start as low as $15,000. That sounds fantastic, especially for a young adult looking for profitable opportunities.
Grand Bahama also has a slate of income-generating properties that can be of interest to those looking for a decent vacation rental, or who cannot afford a mortgage. There is an abundance of commercial properties for sale, yet he only problem is: Would it be wise to do business there? Well, it depends. Since consumer activity in Grand Bahama has slowed down, any new business venture will have to be one that persons find necessary, convenient and easy on the wallet.
There are still lots of opportunities in this sector because, over time, the value of those distressed properties can increase once the overall economy starts to pick up. Therefore, that property valued at $30,000 could be worth triple its original value in the next three to five years. How is this possible? There are a number of projects coming on stream in Grand Bahama, including the reopening of the Grand Lucayan. This is expected to boost the economy in the near-term.
Ranging from industrial to tourism, the Minnis administration has announced a series of developments expected to take place in Grand Bahama within the short to medium-term. The Government is anticipating a more than $2.5 billion deal to revitalise the former Ginn sur mer project in Grand Bahama's West End through an investment vehicle called Grand Palm Beach Acquisitions Ltd. This project has the potential to revitalise Grand Bahama's West End and provide a boost to room inventory, which would help to attract more visitors to the island.
In addition, a $47 million development by Grand Bahama Project (GBP) Leisure Ltd is currently in the pipeline, and is expected to be a world-class motor sport, tourism and commercial development in West End. On the industrial side, the Government recently signed a Heads of Agreement (HOA) with Oban Energies for the construction of a $5.5 billion oil refinery and storage facility complex. The project is expected to begin construction by the beginning of next year if it satisfies all the requirements of the Bahamas Investment Authority, including an Environmental Impact Assessment (EIA). A youth apiary was launched in Grand Bahama to provide 30 jobs for persons wanting to enter the beekeeping and honey industry.
The Government is also seeking to reopen the Grand Lucayan resort complex this year, and reinvigorate a property that once provided nearly 1,000 jobs. A 'one-stop-shop' framework is also in the works at the Grand Bahama Port Authority (GBPA), in collaboration with the Government, to help improve the 'ease of doing business' in Freeport. While this seems like a heavy agenda for the Government, it has to be done in order to get Grand Bahama back on track towards economic prosperity.
Grand Bahama has a diverse set of industrial leaders such as Buckeye (BORCO), Pharmachem, Polymers, the Grand Bahama Shipyard, Bahama Rock and the Freeport Container Port. These companies provide employment for hundreds of residents, and they help put Grand Bahama on the map for potential investments made in the industrial field. The success of these companies proves that Grand Bahama has the potential to expand its industrial sector.
In addition, utility services on the island are also accommodating for future projects. The power and water companies are privately owned, and provide sustainable and reliable services to the business community and residents. Grand Bahama has also been identified as a 'technology hub' for the Bahamas. It has been reported that there is growing interest in medical and educational tourism. There have been talks about a medical school exploring the option of setting up on Grand Bahama, and a new technology company also searching for space to do business.
Investing in the industrial sector appears to be the most sustainable and right way forward for Grand Bahama. It could be argued that more investments should be made on this side of the economic spectrum instead of tourism. It may be a bit unusual for a country such as the Bahamas to not make tourism a pivotal means of generating revenue, but every island in the Bahamas is unique in its offering.
Grand Bahama's economy plays a pivotal role in the development and economic prosperity of the Bahamas. This island is bursting with investment opportunities from a range of sectors. It has room for creative ideas once the right human capital, infrastructure and incentives are in place. Grand Bahamians are ready for this change. The island needs it, and so does the Bahamas. Any investments going forward should be reflective of a long-term plan. It is time to put an end to quick fixes. The interest is there and so are the people. It's time to make Grand Bahama great again.