Sandals Chief: Bahamas ‘Can’t Afford’ Discount War – Bahamas Tribune

By NATARIO McKENZIE

Tribune Business Reporter

and NEIL HARTNELL

Tribune Business Editor

Sandals Royal Bahamian's top executive yesterday revealed that the all-inclusive chain shares Atlantis's Baha Mar fears, arguing that the Bahamas "can't afford" a rate discounting war.

Gary Williams, the resort's general manager, told Tribune Business he agreed with the sentiments expressed earlier this week by Atlantis's president and managing director, Howard Karawan.

"We all have the same concerns. Baha Mar is good for the Bahamas, but what the country can't afford is for them to discount rates. That is going to cannibalise the market. I certainly share the gentleman's views. I echo those concerns," said Mr Williams.

Mr Karawan had expressed fears of market 'cannibalisation' as a result of new developments such as the $4.2 billion Baha Mar project, and added that new developers should effectively 'take the lead' in attracting new airlift to this destination and expanding the tourism market.

Mr Williams yesterday said that despite these concerns, the all-inclusive property has been able to hold its own thus far. "We haven't seen any impact thus far," he added. "We are holding our own. It hasn't started to affect us as yet, but discounted rates are no good for the Bahamas."

Mr Williams said slashing room rates to gain market share "makes no sense at all" for a high-end destination such as the Bahamas.

Dionisio D'Aguilar, the minister of tourism, told Tribune Business earlier this year that his priority was to avoid any "devastating cannibalisation" impact from Baha Mar's full opening on other New Providence resorts. He said this was a greater concern than generating the extra 314,000 airline seats per annum that are needed to fill Baha Mar's net 2,300-room increase.

Baha Mar, though, yesterday countered the concerns by arguing that it will "attract an entirely new traveller to the Bahamas" via its various brands and amenities, suggesting it was sufficiently differentiated from rival properties.

"Baha Mar is leading the way in driving the most significant expansion of the Bahamian hospitality market ever," the $4.2 billion project said yesterday. "As a world-class resort development, Baha Mar possesses key differentiators that will attract an entirely new traveller to the Bahamas......

"Collectively we are currently in negotiations with major air carriers to greatly increase frequency, capacity and direct flights from the top US feeder markets, and service from underutilised feeder markets, such as the American Mid-west. We're equally focused on building a presence for the Bahamas in international markets, such as Canada, the UK, South America, Asia and Europe as we complete our phased opening, and fully activate our groundbreaking marketing campaign set to launch in fall 2017.

"Baha Mar is - and will continue to expand - the Bahamas' tourism market and attract new visitors to the destination."

The $4.2 billion project's position is that by targeting new markets it will grow, rather than split, the market for high-end visitors with Atlantis, and ensure there is sufficient demand and business for everyone to prevent a 'race to the bottom' on room rates.

"Our statistics have shown that the opening of Baha Mar has re-ignited interest in the Bahamas, and has contributed to the growth of tourism with new and returning guests who haven't visited the Bahamas in a long time," Baha Mar said.

Focusing on the strategy for its 1,800-room, Hyatt-branded hotels, Baha Mar said it was targeting high-end incentive travel guests and groups, especially those who have yet to visit the Bahamas.

"Once they discover the Baha Mar destination, they are far more inclined to bring their family and friends and share word of mouth. This is our secondary objective - to secure this secondary market to increase affluent leisure business," Baha Mar said.

The resort added that it anticipated Hyatt's loyalty programmes will generate around one-third of its current and future bookings.

"These loyal guests are an addition to the market, as Hyatt has not had a presence in the Bahamas," Baha Mar said. "We are not only a new resort for our loyal guests to experience, but a new destination for many of our guests.

"Our strongest booking resource is Hyatt.com, which represents the majority of all current and future room nights booked. Again, these are Hyatt loyal customers, many new to the marketplace."

Robert Sands, Baha Mar's senior vice-president of government and external affairs, declined to comment beyond what was in the statement.

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Sandals Chief: Bahamas 'Can't Afford' Discount War - Bahamas Tribune