Thanks to attractive business incentives and its tax-neutral platform, The Bahamas has attracted considerable international investment in its tourism industry over the last 10 years, helping to make the nation the leading destination in the Caribbean region.
Government estimated capital inflows in the tourism sector at $1.8 billion from 1992-2000. Tourism also accounts for roughly 60 per cent of the country's Gross Domestic Product (GDP), employing nearly half the total workforce directly or indirectly and helping to maintain a per capita income of $15,774 in 2000.
Big hotel brands in The Bahamas include Hilton, Holiday Inn, Club Med, Sandals, SuperClubs Breezes, Atlantis, Best Western, Island Outpost, Radisson, Westin, Sheraton and Wyndham.
Minister of Tourism Obie Wilchcombe would like to attract still more big names. "We want to have more of the brands. The brands sell," he told The Tribune newspaper in 2002.
Allyson Maynard Gibson, Minister of Financial Services and Investments, hinted at the same during an interview at the end of 2002. "Within the next five years, if plans on the drawing board in my ministry succeed, we will have five five-star resorts in The Bahamas, which is probably the greatest concentration of five-star resorts in the Caribbean."
The Progressive Liberal Party (PLP) government is concentrating on developing tourism outside of Nassau, which has always had the lion's share of the $1.75-billion industry. Of the 4.1 million people who visited The Bahamas in 2001, 2.7 million of them stayed in Nassau.
Prime Minister Perry Christie acknowledged this at the Bahamas Business Outlook conference in January 2003, when he noted that "despite the less than rosy picture that the global economy represents, my government has in recent months approved an array of new resort development projects that will pump fresh blood into our tourism sector and provide increased employment and entrepreneurial opportunities for Bahamians, especially in some of our Family Islands."
One example is the $141 million Four Seasons resort at Emerald Bay in Exuma, with 231 rooms, a marina, and golf course.
Minister of Works Bradley Roberts said in December 2002 that government had expanded the island's electricity supply for the Emerald Bay development, and is also upgrading Exuma International Airport.
Other proposals include developing a master harbour that will serve as a transshipment centre and a customs bonded area; promoting Elizabeth Harbour as a yachting and cruise ship capital for the southern Bahamas; encouraging a fast ferry service between Nassau and the Exuma Cays; and enhancing and protecting the Exuma Cays Land and Sea Park, a 176-sq-mile protected area notable for its yachting, snorkelling, diving and unique flora and fauna.
Great incentives
The government offers considerable incentives to investors building hotels in The Bahamas, beyond the obvious tax neutral benefits of the jurisdiction, which include no tax on income, capital gains, payrolls or dividends.
Under government's national investment plan, upscale hotels, condominiums, timeshares and second home development are targeted as areas for overseas investors.
More specifically, the Hotels Encouragement Act offers customs duty exemptions on materials imported to construct and equip hotels, as well as tax guarantees and concessions for the improvement of guest facilities. Among other concessions, a new hotel is also exempt from real property taxes and other taxes imposed on real property for a period of 10 years after it opens.
Big names, big investments
Some of the industry's most successful hoteliers have taken advantage of this business friendly environment to bring their brands to The Bahamas. Among them are two Jamaicans: John Issa, executive chairman of SuperClubs Super-Inclusive Resorts, and Gordon "Butch" Stewart, founder and chairman of Sandals and Beaches Resorts.
For Issa, who began visiting Nassau in the early 1970s, the decision to invest in The Bahamas was an easy one.
"The Bahamian people are sound, educated, gracious people," he said. The country also boasts a stable economy, a centuries-old democracy and a dynamic two-party political system - desirable elements for any investor. But best of all, it has "wonderful natural resources in that vast area of sea, and the wonderful islands, the many, many islands, each with its own character," said Issa. "It's a gem of a territory."
Stewart bought the former Le Meridien Royal Bahamian Hotel for $8.5 million in 1995 and turned it into Sandals Royal Bahamian. The couples-only, ultra all-inclusive boasts 405 rooms, eight gourmet restaurants, nine bars, two pools, six whirlpools and a private offshore island with two beaches, a pool and a restaurant.
Issa recently expanded Breezes to 560 rooms and added more restaurants and a spa.
But the grandaddy of all hotel investments is Atlantis, Paradise Island, a 2,395-room theme resort based on the "Lost Continent of Atlantis." The property is a unique marine habitat that features 11 swimming areas, a four-acre waterscape with more than 200 species of fish and invertebrates, exhibit lagoons designed as underwater ruins of the Lost Continent, adrenaline-pumping water slide rides, a casino, world-class marina, designer boutiques, golf course, tennis courts and a spa.
"I always believed, if you're in tourism big-time, you'd better be in it and the whole world had better want to see and be there," said Sol Kerzner, chairman of Kerzner International and owner of Atlantis.
The guest list for the December 1998 opening of Phase 2 of the resort included Michael Jackson, Julia Roberts, Leonardo DiCaprio, Denzel Washington, Sir Sidney Poitier and Oprah Winfrey, who taped her show from the $790 million resort in 2000.
And despite a downturn in travel following the Sept 11, 2001, terrorist attacks on the US, Atlantis posted a profit of $41.6 million for the second quarter of 2002.
On a smaller, different scale, Chris Blackwell (of Bob Marley and Island Records fame) opened Compass Point under his Island Outpost brand in New Providence in 1995, followed by Pink Sands hotel on Harbour Island in 1996. Both are unique, artful and intimate properties with casually elegant atmospheres. In particular Pink Sands is ideal - small, high end and low impact - for the eco-sensitive Out Islands.
Opportunities abound
With 700 islands and 2,400 cays in its chain, starting just 50 miles off the coast of the biggest economy in the world, The Bahamas has more opportunities for warm-weather tourism than almost any other country in the world, according to Vincent Vanderpool-Wallace, director-general of tourism.
"We are generally perceived as safe, we have a variety of islands and many countries in this region are single destinations. We have multiple destinations and we can sell," he told the 2003 Bahamas Business Outlook conference.
The Out Islands, with their pristine environments ideal for diving, fishing, snorkelling, birding, kayaking and other eco-pursuits, are well-suited to small developments.
To make investors and visitors alike more aware of the opportunities that exist outside of Nassau, the government has dropped collective references to the islands of The Bahamas and is focusing on creating a "brand name" for each of the islands, to show the diversity of The Bahamas. For example Andros, the largest island in The Bahamas and the fifth-largest in the Caribbean, with a big bonefishing industry and the world's third-largest barrier reef, is being marketed under the new slogan, "Andros: It's an eco-trip."
It's the kind of philosophy and outlook that fits nicely with the Club Med brand, which has operated in The Bahamas since 1977. In December 2002 the company reopened its San Salvador property, Columbus Isle, after being forced to close following the economic shocks of Sept 11, 2001. (Its Paradise Island property remained open.)
Wilchcombe was happy to see Club Med's return, heralding them in the press as an eco-friendly business partner.
"In many ways the island of San Salvador is unspoilt and untouched.
I speak for the government and the people of The Bahamas when I say that we want to keep this island as close to a paradise on earth, much like the way Columbus found it when he came" in 1492, Wilchcombe told guests at the relaunching of the resort.
"We love our country, we love to share it with the world, but we also believe in responsible and sustainable tourism and that is why we feel fortunate that we can partner with organizations like Club Med as we seek to provide jobs for Bahamians and do it in such a way that The Bahamas and Columbus Isle will be attractive and inviting to visitors another 500 years from now."
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