The future of the Grand Lucayan deal is in doubt, while the minister of tourism, investments and aviation Chester Cooper has criticised changes to Holistica Destinations’ redevelopment timeline for the property.
The Bahamas new minister of tourism, investments and aviation Chester Cooper has strongly criticised the previous government’s agreement to sell the Grand Lucayan resort as “egregiously bad deal”.
In March 2019, the Minnis administration signed a heads of agreement for the sale of the resort to Holistica Destinations, a joint venture between Royal Caribbean and the Mexico-based ITM Group.
“I take no pleasure in being right in this instance,” Cooper stated, speaking during a parliamentary debate. “In fact, the deal the former administration was prepared to enter into was worse than I thought.
“After the government pumped over $150m into this property, the group at the table wanted a loan from the government to develop the property, which they were only interested in developing during the second half of the decade.”
The government purchased the Grand Lucayan back in 2018 from Hong Kong-based Hutchinson Whampoa in a $65m deal.
Following the signing of the heads of agreement with the Minnis government, Royal Caribbean announced it would transform and expand the Grand Lucayan resort into a world class destination. Two phases of the project were announced. Phase one was said to include a 526-room hotel, shopping village, spa and wellness centre, a water and adventure theme park, and a 40,000 sq ft convention centre.
The deal also includes a separate agreement with Hutchison Whampoa, owner of Freeport Harbour Company, for the redevelopment of the harbour into a new cruise facility, expected to accommodate three ships in phase one and up to seven ships in subsequent phases.
However, it was subsequently reported that the original two-year timeline for redeveloping the Grand Lucayan had been extended to ten to 15 years.
Speaking at the start of October, Cooper said the government was “keen to move with respect to the negotiation one way or the other” following a meeting with the board of Lucayan Renewal Holdings (LRH), the special purpose vehicle which owns the resort’s assets.
Amid criticism regarding modifications to the redevelopment timeline, the board was said to have “unanimously” recommended that the government abandon the deal.
“They [the Board] urged them to decouple or bifurcate the agreement, bring the ITM/Royal Caribbean deal to a close, cancel the contract, give them the deposit back and move on. That is the advice all the directors gave to the incoming government,” an anonymous source told the Tribune newspaper. “The redevelopment timeline, which was to initially have taken two years, was now to take 10-15 years. The deal makes no sense.”
In September, former minister of tourism and aviation Dionisio D’Aguilar said he was disappointed the government had been unable to close the sale of the Grand Lucayan before the end of the Minnis administration’s term in office.
“I’m very disappointed that the Freeport Harbour Company and Royal Caribbean were not able to finalise their transaction and as a result, the hotel can’t transfer over to the Royal Caribbean group for them to start doing what it is they needed to do,” he stated.
BAHA MAR’S PRESIDENT CRITICISES TRAVEL HEALTH VISA COST
Baha Mar’s president characterised the $40 cost of the travel health visa for tourists as an “unnecessary burden” and an “impediment”. Graeme Davis highlighted that the majority of the resort’s guests are vaccinated. “I hope that the cost of the health visa go down dramatically for tourists. There is no need for a vaccinated tourist to buy insurance,” he stated. “Ninety percent of our guests are vaccinated. We check every guest that comes in and 90 percent of our guests are vaccinated. For them to pay $40 for a travel visa is an unnecessary burden and an impediment to come here as well.” Davis said he hoped the government will review the travel health visa and address the issue. “We believe in the travel visa to ensure an easy upload of test results and that’s a smooth process,” he added.