The Tribune

* Project EIA says Freeport among ‘lowest ranked’ ports

* Pledges extra $68m in annual passenger expenditure

* Analysis says $95m tax breaks outweighed 3.8 times

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Carnival’s Grand Bahama port will double the passengers it brings to the island to one million within three years of completion, economic forecasters have predicted, while boosting annual visitor spend by $68m.

The assessment by Tourism Economics, which was attached to the project’s newly-released Environmental Impact Assessment (EIA) ahead of the August 4 public consultation, predicted that a yearly average of 1,688 total jobs will be created once the ‘Grand Port’ begins operations following a three-year construction build-out.

The EIA itself, which like the economic impact analysis was completed pre-COVID, argued that allowing Carnival’s development to proceed “will let the world know that Grand Bahama is back in a significant way as a tourist destination in the Caribbean region” following the ravages inflicted by Hurricane Dorian in September 2019.

Painting a picture to suggest that the project is much-needed to revive a tourism industry and economy that were both flagging prior to the storm and the pandemic, the EIA added: “The current port in Grand Bahama is consistently among the lowest ranking ports in terms of guest satisfaction.

“Currently, five cruise lines visit the island. Three of these – Carnival Cruise Lines, Costa Cruises, and P & O UK – are Carnival Corporation brands. Over 80 percent of all guests arriving to Freeport on cruises will come from Carnival Corporation brands.” That is until, presumably, Royal Caribbean and ITM Group’s Grand Lucayan acquisition is completed.

Given that the modelling by Tourism Economics, a division of Oxford Economics, dates from pre-Dorian and COVID-19, there is a likelihood that some indicators and numbers will have altered although the broad outline of Carnival’s ambitions appears not to have altered. Carnival did not respond to Tribune Business’ request for comment, relayed through its local contacts, before press time last night.

The company, and the cruise industry as a whole, were dealt a devastating financial blow by their pandemic-enforced 15-month shutdown, and the timelines for Grand Port’s development have been pushed back by at least two years due to a combination of COVID-19 and the wait for the necessary permits and approvals.

However, the upcoming EIA consultation indicates that Carnival has not given up on its Grand Bahama ambitions and is still seeking to move forwards. This was indicated to Tribune Business earlier this year by Giora Israel, the cruise group’s senior vice-president for port and destination development, who said that while plans may have been “delayed slightly” construction on what he termed the “crown jewel” could still start this year.

Tourism Economics said Carnival’s new port would increase Grand Bahama calls by the cruise line’s ships by 26 percent annually to more than 250, as opposed to the 200 arrivals in 2019 pre-COVID. The new facilities will also be able to berth larger ships, and accommodate “two Super-Post Panamax ships at a time with up 6,000 passengers each”.

“In 2019, Carnival brand ships brought nearly 500,000 passengers to Grand Bahama, and plans include boosting this volume to one million by 2025, a 100 percent increase over current levels,” the analysis said.

“Along with more volume of cruise passengers comes on-shore visitor spending, which supports Bahamian jobs and income. By 2025, new incremental onshore spending is expected to amount to more than $68m over the baseline forecast.”

Given the COVID-related and other delays, the ambition to bring one million passengers to Grand Bahama is likely to have been pushed back from 2025 to at least 2027-2028. “In.....the first year of operations, passengers are expected to spend $146 per person on shore, with most spending coming in retail, followed by recreation and food,” Tourism Economics added.

“Crews are expected to spend B$61 on average, primarily on food and beverage, followed by retail..... The new port facilities will include retail and food and beverage locales that will promote a uniquely Bahamian experience and local brands.

“The various dining options are expected to provide up to 10,000 meals within a two-hour timeframe, and will be located throughout the property to avoid congestion. These retail and dining locales are expected to employ up to 500 workers.”

The economic impact assessment disclosed that Carnival will receive $74.7m worth of real property tax exemptions over the first years of the project’s operations, along with $20.1m of tax breaks during the construction phase.

However, Tourism Economics argued that this $94.8m would be far offset from future tax earnings generated by departure taxes, VAT, National Insurance contributions and other revenue sources totalling a collective $362.7m over the same period.

“Net incremental benefits to the economy would include a total of $363m (in constant B$2019) generated in government revenue over a 23-year time horizon,” it added. “Government concessions would tally $94.8m in B$2019. Government revenues exceed concessions by a factor of 3.8. The total project GDP impact would exceed concessions by a factor of 16.3.”

Over a 20-year period, Oxford Economics forecast that Carnival’s Grand Port will boost Bahamian gross domestic product by $1.4bn and generate $613m in additional income.