A threat to the Bahamas' tourism industry
tribune242 editorial
IN A recent article in The Tribune John Issa of Breezes warned that "the Bahamas, and more particularly Nassau and Freeport, will have to put more effort into developing and promoting our other resort attractions because gambling will be less of a draw than it was in years past". Also, he said, the cost of doing business in the Bahamas would have to come down, if this country hoped to compete internationally.
On Friday, Kerzner International's Bahamas Managing Director George Markantonis also warned the Bahamas to expect a big hit on its tourism product if the three massive casinos proposed for Miami-Dade and Broward counties are built next year.
As Mr Issa wrote: "Since the birth of Las Vegas over 60 years ago, casinos were considered, during the earlier decades, a sufficient attraction to be the main draw for a resort or destination."
When gambling was legalised in the Bahamas - over the loud objection of the Baptists - the fact that these islands were only a 30-minute flight from Miami set the gambling addict's heart aflutter. Regular charter flights from the US were provided weekly by the Lucayan casino to fill its gambling tables. It proved a good business and was certainly a revenue spinner for the Public Treasury.
It eventually spread to Nassau and fairly recent legislation provided that any hotel with a certain number of rooms constructed on any of the Family Islands could include a gaming room as a part of its attractions.
While it lasted, it brought in good business. In those days, committed gamblers - and there were many -- had to travel many thousands of miles to find a casino. There were the casinos of Las Vegas, Monte Carlo, Maçau, Baden Baden, Havana and Nassau. These were the areas that rolled the dice.
Today, there is such a proliferation of casinos that one no longer has to travel any distance. A player can even stay at home and indulge in online betting. That indeed is the rub for the Bahamas. No one has to book a charter any more to get to the gaming tables.
Baha Mar's 1,000-acre, $3.5 billion Cable Beach resort, which aims for a 2014 opening, boasts that with a 100,000sq ft space it will have the largest casino in the Caribbean. It says that it will be twice the size of Atlantis, which when it was opened on Paradise Island by Resorts International boasted that it was the largest casino complex in the Bahamas. In those days, that was indeed a proud boast -- it had put Freeport in the shadows.
And now comes Florida -- just a half hour away -- threatening all of them with the world's largest casinos.
The obvious difference between Atlantis and Baha Mar is that the Cable Beach venture - misreading the market trend -- is banking on attracting the convention and gambling crowd. Atlantis - although it too went for conventions in a big way just before conventions were being curtailed in the US, and nurtured its casino business - decided to create a family-oriented resort. In the end, it might find itself -- with its magnificent display of marine life and water attractions -- in the best position to weather the resort storm when the need for offshore gambling starts to fade.
Tempting Florida, which was hard hit by the collapse of the housing market, and high employment, is an offer by Genting Corporation, a Malaysian company, to build three lavish $2 billion casinos in South Florida.
"And with the promise of tens of thousands of sorely needed jobs and many millions of dollars in tax revenue, Florida politicians are recalibrating their positions," reported Lizette Alvarez of the New York Times on Friday. The artist's drawings of the three casinos are indeed surreal as they point skyward on what appears to be layer upon layer of large saucers. Obviously, they have not been designed with hurricanes in mind.
Already Genting, according to The New York Times, has paid $236 million cash for The Miami Herald's headquarters on Biscayne Bay. It has also bought neighbouring properties to make up 30 acres for one of the casinos.
In addition, Genting has promised Florida the world and more besides to get its commercial heart beating again. It is an offer -- considering the economic times - that will be hard to refuse.
In January, a casino bill will be debated in the Tallahassee legislature. It will have to change Florida's position on gambling if the Genting project is to get off the ground. And this is where the future of the Bahamas' tourism hangs in the balance.
Although there is a strong lobby supporting the Genting proposal, Disney, Florida's most powerful corporation, is totally against. Disney claims that casinos - certainly casinos on such a large scale - will destroy Florida's theme park image. Disney is backed by the Chamber of Commerce.
"Expanding casino gambling in Florida would never make sense in a good economy," said Mark A Wilson, the president and chief executive of the Florida Chamber of Commerce. "And the only reason they are even targeting Florida is that they are hoping that desperate people will reach for desperate measures. There is never a good time to push a bad idea."
Not only does Florida's future hang in the balance, but come January so does the Bahamas'. As Mr Issa and Mr Markantonis have said, it is now up to the Bahamas to improve its product. Mr Markantonis pointed out that the advantage that Florida has over the Bahamas is that it has "drive traffic and we have airlift".
Airlift is another sad story for another day.
October 31, 2011
tribune242 editorial
A political blog about Bahamian politics in The Bahamas, Bahamian Politicans - and the entire Bahamas political lot. Bahamian Blogger Dennis Dames keeps you updated on the political news and views throughout the islands of The Bahamas without fear or favor. Bahamian Politicians and the Bahamian Political Arena: Updates one Post at a time on Bahamas Politics and Bahamas Politicans; and their local, regional and international policies and perspectives.
Showing posts with label Bahamian tourism industry. Show all posts
Showing posts with label Bahamian tourism industry. Show all posts
Tuesday, November 1, 2011
Friday, November 19, 2010
Sir Sol Kerzner says: The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International
Sol Kerzner hits out on Baha Mar
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
Subscribe to:
Posts (Atom)