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Thursday, July 27 2017 @ 08:44 AM AST

Now 6 months delayed Baha Mar a cause for concern in the Bahamas: EIU

The delayed opening of the Baha Mar resort is now a cause for concern for the Bahamas economy, the Economist Intelligence Unit (EIU) said in analysis released yesterday. The following are excerpts from the EIU report.

Air arrivals performed well in the first quarter, and smaller tourism investments are moving r ahead. However, there is still no firm date for completion of the 2,200-room Baha Mar mega-resort, now six months behind schedule.

Analysis

The Central Bank of the Bahamas reports 8.9% growth in air arrivals for the first quarter, mainly stopover tourists. However, this was offset by a decline in cruise passengers. The May 27th budget outlines progress on a number of smaller tourism investments. In the capital, Nassau, the China Construction Company plans a BS$D200m (US$200m) mixed-use facility adjacent to its recently acquired British Colonial Hilton, where renovations are also planned. The Atlantis resort plans a BS$45m renovation and a BS$140m expansion of the Albany resort is in progress. The BS$40m Island House is open, employing 125 people, and the 305-room Hilton on Bimini is partly open; the latter will employ 700 when complete.

However, not all signs are positive for tourism investment. The opening of the BS$3.5bn Baha Mar complex was scheduled first for December 2014 and then for March 27th 2015, but was postponed just three days before for reasons that have not been made clear. There are unresolved disputes over delayed payments and other matters between the developers and the lead construction company, China Construction America.

With no new date announced, the delay to the opening of Baha Mar is a serious cause for concern for the government, as well as for partner hotel companies SLS Lux, Rosewood and Grand Hyatt (all US), and for other stakeholders. There has already been significant reputational damage, and the delays will also lead to additional legal and other costs. Until an opening date is settled on, there is no chance to plan marketing or to co-ordinate with airlines for the additional airlift that will be necessary to cater for tourist arrivals. By March the resort had recruited 2,000 of its planned 5,000 staff, incurring personnel costs. At this stage, a July or August opening is unlikely; with demand seasonally weak in October and November, a December start would be a full year behind the original target date.

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