ANOTHER DEFEAT: Hotelier laments loss of ‘real driving force’ over Sunwing exit as Grand Lucayan deal terminated

D’Aguilar: I hold no ill will and I hope to hell govt finds a buyer

Cooper: We do not plan to belabor this process

NASSAU, BAHAMAS — A Grand Bahama hotelier yesterday said the island’s tourism sector lost the only real driving force it had for 15 to 20 years after Sunwing’s exit post-Hurricane Matthew, while suggesting that what Royal Caribbean/ITM Group was proposing was not aligned with the island’s needs.

Magnus Alnebeck, Pelican Bay’s general manager, spoke with Eyewitness News following the announcement that the Grand Lucayan sale and Freeport Harbour redevelopment deal had fallen through.

If the hotel would have been given for free to a serious operator when government bought it, the gain for the country would have been far greater than what we are dealing with now.

– Pelican Bay General Manager Magnus Alnebeck

“I didn’t know the full details of the deal that fell through, especially not the financial details, but what I had seen made it look more like a ‘day cruise ship destination’ with water park than the solid hotel operation with airlift, which is in my mind what GBI (Grand Bahama Island) needs,” he said.

“I don’t think we should focus too much on what the government paid for it contra what they can sell it for.”

He added: “The reality is that when Sunwing was told by Hutchison to leave post-Hurricane Mathew, we lost the only real driving force that we have had for 15 to 20 years.

“If the hotel would have been given for free to a serious operator when government bought it, the gain for the country would have been far greater than what we are dealing with now, having stood virtually empty for five years.”

Hindsight

Former Tourism Minister Dionisio D’Aguilar said yesterday that the agreement signed under the Minnis administration for the Grand Lucayan’s purchase was “scuttled” by the inability of Bahamas Port Investments Ltd and Hutchison Whampoa to conclude a deal for the redevelopment of the Freeport Harbour.

Current Minister of Tourism, Investments and Aviation Chester Cooper said in a statement yesterday that the boards of Lucayan Renewal Holdings Limited and Lucayan Beach Casino Holdings Limited terminated by mutual consent the 2020 purchase agreement between themselves and Bahamas Ports Investments Limited (BPI), a joint-venture partnership between Royal Caribbean Cruise Lines (RCL) and Mexico’s ITM Group.

The termination of the agreement canceled the agreement between the government of The Bahamas and RCL/ITM for the sale of the Grand Lucayan Resort. 

The government purchased the Grand Lucayan resort for $65 million in August 2018.

In March 2020, the government signed a heads of agreement for the sale of the resort to Royal Caribbean International and Mexico-based ITM Group, which would redevelop the resort and construct a new cruise port.

Cooper, an outspoken critic of the deal while in opposition, said in a statement that the way the deal was structured “was not in the best interests of the Bahamian people” and that “the government was frankly not satisfied with what was proposed”.

D’Aguilar told Eyewitness News: “In March of 2020, we struck a deal with Royal Caribbean and ITM to purchase the Grand Lucayan. Unfortunately, we allowed Royal Caribbean and ITM to put in that agreement that they didn’t have to conclude until they had struck a deal with the Freeport Harbour Company, aka Hutchison Whampoa, as it relates to the redevelopment of the port to accommodate five to seven new cruise ships.

“They obviously wanted to get a deal done where they would get five to seven cruise ships at a time in Grand Bahama and needed a venue, ie Grand Lucayan, to accommodate the guests.”

He added: “In hindsight, our deal got scuttled by the inability of Royal Caribbean/ ITM to conclude an agreement with the Freeport Harbour Company. To my understanding, they still haven’t come to an agreement, so the hotel deal can’t close until the port deal is concluded.

If I could have gone back at it again, I would not have had that precedent in there and they probably would not have bought the hotel.

– Former Minister of Tourism and Aviation Dionisio D’Aguilar

“While we were negotiating in good faith for two years, all of that was irrelevant because Royal Caribbean/ITM never concluded a deal.

“We basically got screwed by Freeport Harbour Company and RCCL/ITM not concluding their deal on the port.

“If I could have gone back at it again, I would not have had that precedent in there and they probably would not have bought the hotel.

“They didn’t want to buy the hotel until they had a port deal.”

What now?

Cooper noted in his statement that “there are several noteworthy entities that have a credible interest in the property”.

He added: “The ideal candidate, in our view, is an entity with significant resources and a clear vision for the properties that is aligned with the Ministry of Tourism’s vision and the long-term strategic plan for Grand Bahama as a destination.

“We do not plan to belabor this process. The Grand Lucayan Resort has already cost taxpayers well in excess of $150 million.

“Talks with other potential investors will start shortly. We will keep the Bahamian people abreast of developments with this project as they occur.”

D’Aguilar said: “There are some interested people out there. Let’s see what deal they can get.

“We (the Minnis administration) found it particularly challenging to find interested buyers who weren’t looking to get their pound of flesh.

“We thought had found Grade A purchasers. We got screwed by the fact that the Freeport Harbour Company and Royal Caribbean never struck a deal.

“I wish the government well. I hope to hell they find someone. We had a huge difficulty finding someone.

“I hold no ill will and I hope they find someone because God knows Grand Bahama needs it.”