...at the end of the day, workers will be laid off if the Atlantis resort performs poorly... just like in 2008 with the onset of the global financial crisis

Politics and the Atlantis deal


By PACO NUNEZ
Tribune News Editor


As is to be expected at this advanced stage in the election cycle, every issue with potential political mileage is going to be spun for all it's worth.

Just so with the collapse of the Atlantis ownership transfer deal. Mr Christie says Mr Ingraham should have been more forthcoming about the details, Mr Ingraham says Mr Christie's poor decisions in office created the conditions that led to the deal in the first place, and Branville McCartney says both men knew the proposal was bad for Bahamians, but kept this information from the public.

And, in another clear indicator of the times, even while politicking their hearts out Messrs Christie and McCartney have both sought to give the impression they are the only straight talker; the one not using the failed deal as a political stick to beat the others with.

The PLP leader has provided us with perhaps the most amusing quote, a classic example of political doublespeak.

Berating the Prime Minister for "playing politics" as the deal collapsed, Mr Christie said: "Atlantis is the nation's single largest private employer and thousands of Bahamian jobs are at stake."

Then: "We're told he found out on Friday that the Brookfield deal was going under. Did he tell the people of the Bahamas? Did he call union leaders or meet with workers? Did he start reviewing options for moving forward? No."

Let's see if we can follow his logic. The issue is too sensitive and too important for the Prime Minister to continue with politics-as-usual. To prove this, Mr Christie tries to scare the hell out of everyone ("thousands of Bahamian jobs are at stake"), then uses his alarmist interpretation to criticise the behaviour of his political opponent.

A political jab, disguised as a warning about making political jabs. Did Mr Christie think no one would see through his crafty trick?

His version is alarmist and inflammatory, because anyone with the merest hint of business sense - and I'm sure that includes Mr Christie - knows two facts to be true.

The first is that there is nothing the government can do at this stage about the underlying factors: Kerzner's inability to pay its creditors and the decision of those creditors to call in their loans.

The DNA may well be right, the deal would not have been ideal for the Bahamas; nevertheless, it was the only one on the table. What should the government have done, allow the largest private sector employer in the country to go bankrupt? Stage a $2.3 billion bail-out?

Fact

The second, more important fact, is that contrary to Mr Christie's assertions, the failure of the Brookfield deal has in no way rewritten the future for Atlantis workers.

That's not to say everything will necessarily be fine in the long-run, only that the probability it will has not been improved or worsened by the collapse of the deal.

This is especially the case, as while the transaction was scuppered by two junior creditors, the major players were all onboard, meaning a revised proposal with relatively minor changes could see the deal resurrected soon.

So, at the end of the day, workers will be laid off if the resort performs poorly - just like in 2008 with the onset of the global financial crisis.

If Atlantis does well, people will keep their jobs. Simple as that.

Now, no one is naive enough to believe the going will be easy; the creditors will expect hefty profit margins. After all, they're in it to get their money back.

But an essential ingredient in this formula is the product, which attracts the guests in the first place, and the new owners will know an understaffed resort is the fastest route to falling standards.

So, is it merely a case of much ado about nothing? Not quite.

What all the political gauze of the last week or so has managed to do, is obscure the real lesson of this "crisis" - the extent to which the notion has become imbedded in our collective psyche that as goes Atlantis, so goes the Bahamas.

The anxiety unleashed by this turn of events exposed how inextricably intertwined our sense of national well-being has become with the fate of a single entity.

Even those violently opposed to the pink monstrosity across the bridge have been lulled over the years into the assumption of its permanence, its inevitability.

Leaving aside arguments about whether the nature of our economy would have allowed for any realistic alternative, can it be healthy for a society to pin all its hopes on a single business, the ultimate fate of which is decided beyond our shores?

Of course, this leads us into a consideration of what the Bahamas would be today if Sol Kerzner had never come here in the first place.

When 800 workers were laid off from Atlantis in 2008, there was widespread concern that it would spark a crime wave. What would the other 8,000 employees be doing right now if history had taken a different course?

What other cracks in our society have been papered over by the existence of a mega-resort which just as easily, might never have been?

* What do you think?

Email: pnunez@tribunemedia.net

January 23, 2012

tribune242

Caribbean Blog International

Kerzner International Fears Competition In The High-end Tourism Market From Cable Beach Resorts in Nassau, The Bahamas

The Bahamian landscape has been “littered with failures” from resorts seeking to go after the same market

Kerzner Fears “Bloodbath”

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

14/06/2004

Kerzner International would have to “reassess things” if there is any development on Cable Beach that goes after the high-end tourism market, according to Butch Kerzner, the company’s CEO.

Mr. Kerzner, who was a special guest on the radio Love 97 programme “Jones and Company” Sunday, said while Kerzner welcomes healthy competition, any improvements on Cable Beach should be geared at the mid-market.

“Cable Beach has been able to go very strongly after the mid-market when they reinvested in their product, and I think that if they continue to reinvest in their product and continue to create a product that can go after the mid-market segment, that’s great for us,” he said. “That’s great for the destination.”

But Mr. Kerzner said it would be “lunacy” if Cable Beach and Paradise Island went head to head.

He added that the Bahamian landscape has been “littered with failures” from resorts seeking to go after the same market.  He pointed out that the high-end market in the United States – the main source of tourists to The Bahamas – is less than three percent.

Mr. Kerzner said there was a “fiasco” in the late 1980’s when the owners of the Crystal Palace tried to compete with Paradise Island.

“There was a bloodbath for both of them,” he said, “and we bought the property out of bankruptcy because of that…  My sense is that the history is so clear it doesn’t make sense in such a small market where you get [fewer] than one million people per year coming through the market to have a product that goes head to head.”

Mr. Kerzner also said, “I think the sensible approach to tourism generally is that you segment the market…  We’ve obviously got the over $300 room rates market and that’s a very small market…  It would seem unlikely to me that what is going to be encouraged is to have a destination go after the exact same market.”

His comments come as many people await an announcement regarding future development on Cable Beach that was promised months ago by Prime Minister Perry Christie.

In fact, Mr. Christie has said that he expects to announce a $1 billion investment project for Cable Beach, in addition to plans to revitalize the strip.  The government expects that this would complement the recent announcement regarding the $1 billion expansion of the Atlantis resort on Paradise Island.

Mr. Kerzner on Sunday made it clear that his company is not against competition.

“I don’t think we would be cautious about somebody saying they are going to come in and compete…  One thing we’re not afraid of is a little bit of competition.  It keeps people on their toes and I think that’s all very good,” he said.

But Mr. Kerzner added, “It would really depend on if you’re going to try and develop another ‘me too’ product, then we’d say ‘that doesn’t seem [to be] a very sensible approach’.   And at that point, we’d think about that.  I just don’t think we’re going to be there.”

Minister of Tourism Obie Wilchcombe, who spoke with the Journal Sunday, said The Bahamas itself is a high-end market.  The Minister added that Cable Beach hotels and other properties throughout the country are being encouraged to go high-end.

But he pointed out that there is diversity in the high-end market.

“Kerzner International has created that [high-end market] to a large degree,” Minister Wilchcombe said.  “The truth is, at the moment, Exuma is attracting high-end business.  The Four Seasons with its clientele, that’s high-end…  In Grand Bahama, there is developing there a high-end product.”

He added that The Bahamas wants to maintain high average room rates and high arrivals.

“We cannot in our country, because of our limited number of rooms, have anything other than high-end business,” said the Minister, who pointed out that The Bahamas only has about 15,000 hotel rooms.

He said he does not expect to see Cable Beach competing head-on with Paradise Island.

“I think what we’re going to see are properties that fit into the same category so far as the standards of excellence, beauty and uniqueness,” Minister Wilchcombe said.  “Based on what I’ve seen, I don’t think we’re going to have a hotel that’s going to compete against Atlantis.  I think we would wish to have in The Bahamas uniquely different properties all of which are attracting different types of visitors.”