NASSAU, Bahamas – The Royal Caribbean Group Wednesday said that the owners of the Grand Lucayan Resort in Grand Bahama have “mutually agreed” to terminate Bahamas Port Investments Limited (BPI) contract to purchase the 542 room Grand Lucayan after the ITM Group made the decision not to proceed with the acquisition.
Grand Lucayan, Lighthouse Pointe Resort. (Photo via grandlucayan.com)In the statement, the owners, including BPI, Royal Caribbean Group’s joint venture with ITM Group, and Lucayan Renewal Holdings Limited/Lucayan Beach Casino Holdings Limited, said BPI will continue with its plans for a cruise port redevelopment project in Grand Bahama.
“Royal Caribbean remains committed to working with the government of The Bahamas and the people of Grand Bahama to support the government’s vision for the transformation of the tourism product and offerings in Grand Bahama,” the statement said.
Wednesday’s announcement follows a statement issued by Deputy Prime Minister and Minister of Tourism, Investments and Aviation, Chester Cooper that cited bad terms negotiated under the previous Hubert Minnis administration.
Cooper said a Cabinet sub-committee involving himself, Minister of Economic Affairs, Michael Halkitis and Attorney General Ryan Pinder examined the deal and concluded “the way it was structured was not in the best interests of the Bahamian people”.
The Tourism Minister said on Monday the boards of Lucayan Renewal Holdings Limited and Lucayan Beach Casino Holdings “terminated by mutual consent the 2020 purchase agreement between themselves and the Bahamas Ports Investments Limited, the joint partnership between RCL and ITM Group.”
He said the Minnis administration’s agreement to lend BPI money to renovate and develop the property was a no-go and that the ideal candidate would be a company that has experience, significant resources, a vision for the property and a commitment to develop Grand Bahama as a destination.
“The issue of the owner financing for the redevelopment, or the government providing funding for the redevelopment we thought was simply a no-go. It was a US$50 million loan to RCl and ITM Group in their subsidiary company Bahamas Ports Investments Limited. And then there was not a firm commitment to complete the redevelopment in the shortest possible time frame.
“We were not satisfied that they were committed with the timelines that the new government would like to see and there were various other elements of the deal that we simply did not find feasible, acceptable for the Bahamian people,” Cooper said, adding that to maintain and operate the Grand Lucayan property, the government will likely continue to provide US$1.2 million to US$1.5 million per month.
We’ve taken the decision as I’ve indicated to keep the property open to maintain value, to maintain the property itself, to provide some employment for the few persons who continue to be employed and to really keep the destination alive,” Cooper said, adding “but let me say… that we want to sell the property in the shortest possible time frame. We are committed to doing a deal expeditiously”.
In its statement, Royal Caribbean said that upon learning of ITM’s withdrawal, it immediately began searching for a new partner with experience as an established operator in the land-based hospitality industry.
“We look forward to participating in the new public bid process for the purchase of the Grand Lucayan once a bid is issued by the government of The Bahamas. The transformation of the Grand Lucayan into a premier entertainment resort will complement our plans for the development of a world-class cruise port facility in Freeport to re-establish Grand Bahama as one of the world’s most popular cruise destinations.
“We look forward to providing regular updates on Grand Bahama where Royal Caribbean is also investing in the US$450 million transformation of the Grand Bahama Shipyard, in which Royal Caribbean holds a 40 per cent stake. The transformation will position the facility to be the best of its kind in the world.”
Royal Caribbean said in addition to investing capital into the revitalization of Grand Bahama, it is committed to leveraging its millions of customers, international marketing and vast travel partner distribution network to ensure the success of the destination.
“Royal Caribbean maintains a strong relationship of more than 50 years with The Bahamas and reigniting economic growth and development including entrepreneurial opportunities in Grand Bahama remains a key priority,” the statement noted.
