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Advertisers Dupuch & Turnquest & Co.
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New investments revive the tourism industry in The Bahamas
In a recent tour of some of the major developments taking place, Prime Minister Hubert Ingraham observed, "The Bahamas is experiencing an investment influx into the hotel and resort sector "unmatched" by any other place in the Caribbean."
Since 1993, well more than one billion dollars has been spent to upgrade existing hotels and build new ones in Nassau, New Providence alone. This capital injection is breathing new life into the industry and growing the economy.
Minister of Tourism Cornelius A. Smith noted that this change has been most welcome because a few years ago the picture was not so rosy. He reported that, "The Bahamas has been a leader in the tourism sector for many years but during the mid-'70s to the early '90s, tourism in the Bahamas experienced a downturn. By the early '90s our tourism product was worn out, tired and was in need of capital investment," said Smith.
 This downturn was brought on specifically by outside economic factors, such as a recession in the U.S. economy, combined with government mismanagement at home. The number of tourists fell and the tourism industry in The Bahamas was not profitable enough to reinvest in upkeep and refurbishment. In the 1980s the Bahamas Hotel Corp., which had purchased several hotels from the private sector in the mid-'70s to save tourism jobs, wasted hundreds of millions of dollars in public funds because of mismanagement and manipulation, according to the government's 1997 Commission of Inquiry report. In 1992, when the Free National Movement won the elections, it vowed to hold true to a campaign promise to divest itself of the government-owned hotels that were bought decades back to save tourism jobs. The hope was that the sale would lead to new private-sector investment.  The government also hired Vincent Vanderpool-Wallace as director of tourism to revamp the marketing strategy for the industry. "What he has been able to do for the industry has been incredible. We are very fortunate to have Vanderpool-Wallace," said Ed Fields, director of public relations for Sun International Ltd. When Sun International decided to invest in Paradise Island in 1993, tourism got the bolster that it needed. Sun International, a consortium of American, European, and South African hotel and gaming interests, purchased the bankrupt Paradise Island Hotel and Casino and began its conversion to Atlantis. Sun International has invested more than $850 million in expanding Atlantis Resort & Casino. To date, the investment has included building and refurbishing a total of 2,300 rooms in three different buildings; creating the world's largest saltwater aquarium; constructing a luxury marina; installing 20,000 square feet of convention space; adding a spa and gym; installing upscale retail shops; and a building golf course, which is still being finished. This makes the Atlantis Resort the largest casino/entertainment center in the region. Sun International is now the largest private-sector employer in The Bahamas, providing jobs for more than 6,000 people.  To accommodate the increased influx of tourists, the government has had to build another bridge to Paradise Island, and traffic has been rerouted to encourage visitors to visit the downtown area of Nassau. "Sun's investment in tourism and their quality of product have created a renaissance in the tourism industry. Other hotels have had to upgrade to compete," said Smith. In 1994 the privatization of government owned hotels became a reality as several were quickly acquired.  The Ambassador Beach Hotel was sold to Sandals Group of Jamaica, which after purchase spent $40 million to renovate and expand the 400- room hotel. The 840-room Crystal Palace was purchased by The Ruffin Group, which spent $35 million in refurbishments. The 170-room Royal Bahamian (formerly the Balmoral Beach) Hotel was purchased by Breezes, another Jamaican vacation club chain, which invested $80 million in renovations. The Ruffin Group also later purchased the Nassau Beach Hotel and Crystal Cay for $150 million. Radisson Cable Beach Resort is the last major hotel in Nassau to still be owned by the government. It recently underwent a $15-million renovation and The Hotel Corporation of The Bahamas is planning to sell it soon. The government also owns a hotel in Abaco.  Other hotels, in addition to those once owned by the government, are changing hands and undergoing renovations. The British Colonial, one of Nassau's oldest and privately owned hotels, has been purchased by RHK Capital Inc. of Toronto for $100 million and refurbished. The hotel is now part of the Hilton chain and has become a focal point in downtown Nassau. Investors say that Sun International's large capital investment in Paradise Island gave them the confidence to invest as well because Sun International's work would help draw the quality and quantity of tourists needed to make the investments profitable.
This capital influx has drawn other investors to invest capital in other resorts on other islands. "Our great advantage is that we have so many islands that are undeveloped that can be developed. Our strategy is to market each island, highlighting its own unique character so that visitors can select a new destination each time they come back to the Bahamas," said Smith. To strengthen the tourism industry, intensive training is being done within the hotels, in the high schools, at the Bahamas Hotel Training Center that was created to do skills training, at the College of The Bahamas and the University of the West Indies, and through a program called Bahamas Host that instructs people who have been in the industry but who never have had official training. "Training is a key element in tourism," stated Dion Strachan, vice president of resort services and president of the Bahamas Hotel Association. "We have developed a curriculum together with the Ministry of Tourism and it is being taught in primary schools and secondary schools." "The next challenge that we have is in finding ways in which we can get the community to understand and to become a part of the whole process, to help it clearly understand what it is that tourism does for our economy," said Strachan.
To do this, more visitors have to come. "Bahamas offers great opportunities for visitors to enjoy. They can select one of the many islands that meet their specific requirements. Business people also have real opportunities to invest in a country with tax-free incentives," said Smith. The Bahamas is well on its way to becoming one of the leading destinations in the hemisphere. In recent visitor exit surveys, most visitors would recommend The Bahamas as a vacation spot for their friends or relatives. |
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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With hundreds of miles of pristine beaches that line azure seas, tourism is The Bahamas’ largest industry. It generates about $1.5 billion per year and accounts for more than 40 percent of the country's gross domestic product. This is the seventh consecutive year of economic growth, and hotels are reporting record occupancies and revenues.
The wager paid off in 1996 when tourism experienced its best year to date with 1.6 million stopover visitors spending $1.4 billion in the islands.
While tourism has a large impact on the economy, only 20 cents of each dollar spent in the Bahamas stays in The Bahamas. Smith noted that one of the biggest challenges is to ensure that more goods are of Bahamian origin, noting the opportunity to bolster agriculture and manufacturing to support the tourism industry. "Our goal in the next few years is to increase the amount that stays in The Bahamas to 40 cents of each dollar," he said.