Bahamian officials have high hopes that the .5 billion super-resort known as Baha Mar will transform the tourist economy and put the Caribbean island nation on the map as a world-class gaming destination.
Scheduled to open in December with four hotels, 200,000 square feet of convention space, a golf course designed by Jack Nicklaus and a 100,000-square-foot casino replete with 1,500 slot machines, 150 table games and five private VIP rooms, Baha Mar’s sights are set firmly on the high-rolling Chinese who have made Macau the largest casino market in the world.
China’s involvement in the project is already massive. The Export-Import Bank of China is providing the bulk of the financing, $2.4 billion, and China State Construction Engineering Corp., the country’s largest construction company, is investing $150 million and is the general contractor. Thousands of Chinese workers are at work on the construction.
It’s all part of China’s growing economic and business reach in the developing world. Chinese investment in South America, for example, tops $89 billion, according to the American Enterprise Institute and the Heritage Foundation. And in 2011, China pledged $1 billion in loans for development in the Caribbean—not including Baha Mar.
“It’s called transformation,” says Robert Sands, a senior vice president for Baha Mar Ltd. Developer Sarkis Izmirlian, chairman and chief executive of Baha Mar, “didn’t just want hotels on the beach, he wanted a destination.”
Baha Mar is bringing together some of the world’s biggest hospitality brands to operate those hotels. The centerpiece, the 1,000-room Baha Mar Casino & Hotel, will be managed by Global Gaming Asset Management, the company founded by former Las Vegas Sands President William Weidner that opened the $750 million Solaire Resort & Casino in Manila last year. There also will be a 750-room Grand Hyatt, a 300-room Mondrian and a 200-room Rosewood Hotel. Spanish hotelier Meliá recently took over operations of the Sheraton Nassau Beach Resort at Cable Beach, and when renovation of the 694-room property is completed it will also become part of the complex, operating as the Meliá at Baha Mar.
The ultimate success of the largest tourism project under development in the Western Hemisphere will depend on filling those rooms with the right customers.
As Sands put it, “A lot of focus will be on the gaming aspect.”
That’s the gamble—attracting visitors from markets where the Bahamas hasn’t traditionally been strong. One of them is Asia, and one of the keys will be expanding air links from Asia, the U.S. mainland and the world. The country recently completed a $400 million renovation and expansion of Lynden Pindling International Airport.
Baha Mar Ltd., in the meantime, has opened a business development office in Hong Kong and plans also to reach out to wealthy Europeans, Latin Americans and Asians living in North America. Tourism Minister Obediah Wilchcombe is traveling to China in March to drum up interest. The ministry also is courting visitors from Brazil and Russia and hopes to be able to announce additional airlift from some of the new markets by June or July.
The government has committed $20 million to marketing Baha Mar in the first year, and in January, the Bahamas and China signed an agreement that will allow Chinese tourists to travel to the Bahamas and Bahamians to go to China for up to a month without securing a visa.
“That helps a lot,” said Scott Brush, a hospitality industry consultant, “but a lot depends on people’s ability to get there. How well Baha Mar does depends on how well they can market” and whether they can convince Asian travelers “the destination is worth the trip.”
Analysts say another big question is whether Baha Mar will complement the 3,400-room Atlantis resort just across the water, bringing in more non-traditional tourists, or whether it will cannibalize it and compete for the same visitors.
Which scenario plays out will go a long way in determining how realistic Baha Mar’s economic impact projections are. A lot is riding on their accuracy. A report by Oxford Economics released last June determined that the project accounted for 5 percent of the annual gross domestic product in the Bahamas in both 2011 and 2012. The report estimated that once the resort is operational, on average it will account for 12.8 percent of GDP.
“Baha Mar is expected to generate literally billions of dollars in economic benefits,” said Izmirlian. “This creates real opportunities for Bahamians—jobs, training, entrepreneurship and economic mobility.”
