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Royal Caribbean: Pi Is Not What You Think

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Russell Benford

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Royal Caribbean yesterday pledged its Paradise Island investment will generate an extra $26m per year in visitor spending and “re-energise” downtown Nassau for the benefit of all stakeholders.

Russell Benford, the cruise line’s vice-president of government relations for the Americas, told Tribune Business that the Royal Beach Club’s impact will be the exact of opposite of what Bay Street merchants and tourism-related businesses fear.

Rather than creating an exclusive enclave where Royal Caribbean will take all its passengers and retain 100 percent of their spending, thereby further depriving Bahamian-owned businesses of much-needed income, Mr Benford argued it would instead act as an “engine to get people off the ship and spend more time in Nassau”.

Describing the number of cruise ship passengers disembarking in the Bahamian capital as “very low”, with the destination also ranking poorly compared to its Caribbean peers on the guest experience, the Royal Caribbean executive said there was little alternative but to add “excitement” and refresh the city’s product offering.

With the Royal Beach Club able to accommodate 3,500 persons maximum once it is completed in 2022, Mr Benford explained that this number was equivalent to just 20-25 percent of the up to 14,000 passengers that Royal Caribbean brings to Nassau daily.

He argued that this means there will be thousands more potential visitors able to patronise Bay Street, Fish Fry and other tourism-related businesses, as well undertake a variety of tours and excursions and explore New Providence.

Mr Benford said Royal Caribbean’s research indicated that passengers would spend a maximum four to four-and-a-half hours at the Royal Beach Club, giving them five hours to participate in additional activities given that its cruise ships are typically docked in Nassau for nine to nine-and-a-half hours.

He disclosed that the cruise line envisioned the Royal Beach Club as being at the centre of a water and land transportation loop that will ferry its passengers to attractions such as the Arawak Cay Fish Fry, Junkanoo Beach, The Pointe, Baha Mar and Graycliff, thereby ensuring their spending impact is distributed widely among Bahamian-owned businesses.

The Royal Beach Club’s creation will create 100 construction jobs, Mr Benford said, along with 150 full-time posts. He said Royal Caribbean’s target was for its workforce and all businesses operated there to be 100 percent Bahamian as part of a strategy that, together with a focus on local culture, will “set us apart from the competition”.

The cruise line executive also indicated that it was willing to work with Toby Smith, the Bahamian entrepreneur behind a $2m investment to repair the nearby Paradise Island Lighthouse, to ensure both projects succeeded.

Mr Smith and Royal Caribbean have submitted competing applications for the same Crown Land at Colonial Beach, with the Bahamian entrepreneur having previously revealed to Tribune Business that he had been pressured by the Government to move further west and accept an “inferior” location.

Mr Benford, though, confirmed Royal Caribbean has already spent $50m on acquiring 13 acres of privately-owned residential properties on Paradise Island to form the majority of its Royal Beach Club land. He added that it will be the cruise line’s second “Beach Club” location, the first having been announced for Antigua last year.

“It’s different from Coco Cay, different from the experience you get on the ships, and we’re really excited in being able to roll-out the product here,” Mr Benford told Tribune Business. “The basic concept was that we bring 1.4m guests to Nassau each year but we found a very large percentage don’t get off the ship in Nassau.

“There are multiple reasons, such as they have been on cruises to Nassau multiple times. People are telling us with respect to Nassau that they want to see new options, new types of development, something exciting to get them off the ship. We’re constantly looking for ways to get people off the ship, and this is an exciting concept we’ve come up with to get more guests to disembark.”

Mr Benford said the Royal Beach Club will cater to “a maximum” 20-25 percent of the passengers Royal Caribbean brings to Nassau on any given day, since its capacity will be limited to 3,500 out of the 14,000 on its combined vessels.

“The vast majority of our guests are going to be in downtown, not on Paradise Island,” he reassured. “We will have more of these folks getting off the ship looking for exciting things to do. I think it will have benefits for all stakeholders including the taxi drivers and tour operators.

“This is going to really energise those guests and get them excited in different ways about Nassau. When you put that together with the new $250m port redevelopment project that also looks really exciting with amenities to get people off the ship, there’s all this redevelopment energy in Nassau.

“The market is really strong, and we want to invest in Nassau, grow our business and grow our market share.... We have to this point purchased 13 acres of land at a cost of $50m [on Paradise Island]. We’re in. We’re invested in this project.”

Royal Caribbean has already committed to investing more than half a billion dollars in The Bahamas through its $250m ‘Perfect Day’ spend at Coco Cay in the Berry Islands, plus the $300m outlay with its ITM Group joint venture partner on the Grand Lucayan and Freeport Harbour redevelopment, which was the subject of last week’s Heads of Agreement signing.

The $50m real estate outlay, together with the further $50m needed to develop the Royal Beach Club site, will take the cruise line’s Bahamian investment - by itself and in combination with partners - to around $65m.

“We’re investing heavily because we believe in The Bahamas and are putting our money where our mouth is in terms of creating opportunities for everyone involved,” Mr Benford told Tribune Business. “Our numbers, our statisticians are telling us that once that project is built it will generate an additional $26m per year.

“That is just in guest spending that goes to Bahamian taxi drivers, restaurants on Bay Street, people who work in the stores. To be able to build something that generates that kind of opportunity for Bahamians is tremendous, and that is worth serious consideration for the land and what we’re doing.”

Many Bay Street merchants, tour operators, excursion providers and others who rely heavily on cruise passengers for their livelihoods are unlikely to be convinced by Mr Benford’s assertion that the Royal Beach Club will act as ‘a rising tide that lifts all boats’ in terms of the economic benefits being enjoyed by all, and will likely wait until it becomes operational to pass judgment.

The Royal Caribbean executive, though, said the Paradise Island project will be “very light on bricks and mortar” buildings. While it will feature typical beach club offerings, such as swimming pools, cabanas and umbrellas, coupled with food and beverage refreshments, Mr Benford said it would be “immersed in Bahamian culture” through the participation of Bahamian artists and artisans.

“Our goal is to have everyone who works there or does business there to be Bahamian,” he told Tribune Business, “and that’s what will set us apart from the competition. It’s not just the development of a beach club; it’s the creation of a different type of amenity that showcases the culture of The Bahamas. That’s what this is about. I don’t think anyone’s ever done that.”

Mr Benford said the Royal Beach Club was designed to be the catalyst for a water taxi system that would ferry cruise visitors between Paradise Island, downtown Nassau, Arawak Cay, Junkanoo Beach and even Baha Mar.

“We want to make sure people circulate,” he added. “People typically stop on a beach for four to four-and-a-half hours. The ship is in port for nine to nine-and-a-half hours, so even those that go to Royal Beach Club still have five hours to shop and explore Nassau.

“You have two patterns of circulation. People will be moving to local vendors, doing tours, going to Baha Mar, going to Graycliff to enjoy the day. The best part is that more people will be off the ship now, spending more time in Nassau, and empowering small business owners and vendors in Nassau so that everyone benefits economically from this project.

“The people concerned about getting less business - the taxi drivers, the straw vendors - they will have much more people to work with. The Royal Beach Club is not going to take people away. It’s going to add opportunities with more people shopping, more people taking taxis, more people having a meal in a restaurant, more people buying souvenirs. It’s the engine to get people off the ship and spend more time in Nassau.”

Mr Benford said Royal Caribbean was also open to accommodating Mr Smith’s ambitions, adding: “We always want to work with our partners and neighbours on something that works. We believe in collaboration. We always try to do that.”

Comments

themessenger 4 months, 3 weeks ago

Bay street shops, taxis and straw vendors mussy moving to PI???

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TalRussell 4 months, 3 weeks ago

Likes, how much longer does the the Queen's Loyal Opposition's four comrade House MP's, plan to remain self-isolating in their PLP undisclosed dens - for another 5-12 months, maybe? Are the four still on PopoulacePurse's payroll?

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Well_mudda_take_sic 4 months, 3 weeks ago

Who does this fool Russell Benford think he's fooling? All of us know only too well from decades of past experience what the very greedy business model and modus operandi of the cruise ship companies like Royal Caribbean is all about. It's all about great profits and wealth for Royal Caribbean with nothing but a few crumbs thrown our way in exchange for decades of outrageouly genrous concessions combined with the privilege of polluting our most pristine environment to their hearts content.

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ThisIsOurs 4 months, 3 weeks ago

I don't believe a word of it. For years they've been telling us the guests don't come off the ship because they're afraid of crime or there s nothing to do. The minute a company invests in a "something to do" project what does RCI do? They create a something to keep the money in our pockets to do. That's what this is all about. Has nothing to do with empowering Bahamians. Good luck to the ones who email in proposals..the lucky one or two tokens might get something. Why do we fall for these trinkets every single time?

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geostorm 4 months, 3 weeks ago

Agreed @thisisours, but we also need to fix our tourism product. Bay Street needs to be revamped. Its dry, boring and lacking character. It certainly is not representative of a city center.

This move by RCL should really motivate the merchants/business owners to clean up their act.

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newcitizen 4 months, 3 weeks ago

This project will never come to fruition. The cruise ship industry is dead in the water right now and will take years to come back to last years record highs.

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ThisIsOurs 4 months, 3 weeks ago

I wonder if you're correct. If people will lose faith in cruise ship travel after things calm down. I'm not sure. Travel might follow the same trajectory as post 9-11...it waned but it rebounded.. or not...

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Well_mudda_take_sic 4 months, 3 weeks ago

Anyone know which country this Russell Benford hails from? He can't possibly be a patriotic Bahamian!

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bogart 4 months, 3 weeks ago

Why can't you find him 'ear' resistable?

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sealice 4 months, 3 weeks ago

the cruise ships have been screwing over local business for years with the help of either the PLP / FNM.
Please explain to me how the cruise ship makes the most money off tourists gong parasailing and this is fair to local business that have to pay all of the operating costs and do all the damn work?
No the bahamas needs to work on its tourism image much harder so we can cast off all the giant greedy cruiseships and have Bahamians selling the Bahamas and being paid directly.

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bogart 4 months, 2 weeks ago

Good point. The Cruise ships, Foreign Hotels....anything foreign operating on the Capitalist system is geared to operate on making profits to grow and bring in dividends to shareholders. If say you ....Sealice was the President...Owner...Operator...any decision making position on Company ...in control or part...then you can see why some senarios exist with the help of the political parties.

The dilemna is the country's govt with a sole decision making powers....single political party..., no laws and regulations on anti Trust, Anti Competition, FOIA, no pressure groups, no real checks and balances political parties have to deal with because they seems intentionally refuse to have them challenged if and any shenanigans, cutting deals come up .....and if any are caught with blatent egregious wrongdoings, flawed contracts, date of execution of legislatine action,seems mechanisms inadequate to prosecute them. Look at party saying anything to get elected giving people false hopes and yes indeed doing u turn but yet cannot have MP's recalled etc but must face people balance of 5 years....repeats last 25 years parties just taking turns on see- saw teeter totter

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