Business

Top ScotiaBank Executive Minister at Lunch
Top ScotiaBank Executive & Minister at Lunch

July 22, 2014

Scotiabank executives discussed the bright future of the Financial Services Industry in The Bahamas with the Hon. Ryan Pinder...

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Pam Burnside presents at IDB Caribbean Creative Conference in Washington D.C.
Pam Burnside presents at IDB Caribbean Creative Conference in Washington D.C.

July 22, 2014

Pam Burnside, owner of Doongalik Studios Art Gallery was recently invited to make a presentation on the growth of the Bahamian Visual Arts...

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Official: Baha Mar room phase-in 'unspoken part' of airlift 'balance'

July 21, 2014

An expectation that Baha Mar's total 2,200 rooms will come on stream over a period of time is among the factors guiding tourism stakeholders' approach to ensuring adequate airlift is in place to support the resort, Guardian Business has learned.
Responding to concerns expressed by President and Managing Director of Atlantis George Markantonis that there is not enough airlift in place at present to support both Atlantis and Baha Mar when the latter resort comes on stream, after data obtained by this newspaper revealed an 8.5 percent fall in airlift in the four years leading up to the end of 2013, a top Ministry of Tourism official said he is satisfied with the situation.
Tyrone Sawyer, director of airlift in the Ministry of Tourism, said: "We feel very confident from our joint efforts with our tourism partners that we have sufficient airlift, or we will have sufficient airlift as Baha Mar comes online. The reason I am being careful how I phrase it is that what's very important from an airlift perspective is that we have a balance between the total number of seats we have and the number of hotel rooms.
"We are working very closely with the Nassau Paradise Island Promotion Board and Baha Mar to make sure we have sufficient seats and those would be tied to coincide with the additional rooms coming online, as they come online. Part and parcel of that effort is marketing promotions to be done in those markets to build the demand, to ensure that whatever incremental seats we get we would generate demand to fill them."
Asked specifically if there is an expectation that Baha Mar's additional 2,200 rooms will open in a phased fashion after the December 2014 opening date and if this is factoring into the tourism partners' airlift strategy, Sawyer said: "That's correct. Very much so. That's the unspoken part of the balance."
When pressed as to how many rooms are expected to come online in December, Sawyer said: "You would have to speak to Baha Mar."
In an emailed response on Friday to the data showing a decline in airlift up to 2013, Vernice Walkine, chief executive officer of the Nassau Airport Development Company, said that there is an airlift strategic group in place working on securing additional airlift for the country in time for Baha Mar's opening. As part of this plan, she pointed to rooms opening in an "incremental" fashion.
"The strategy to secure seats for Baha Mar is well-developed and there will soon be announcements of additional capacity to meet the demands of the incremental rooms at Baha Mar," said Walkine.
Robert Sands, Baha Mar's senior vice president of administration and external affairs, in an interview with Guardian Business last week, consistently maintained that the resort will open in December.
When asked last Friday exactly to what extent the resort will be fully operational come December's opening, Sands said: "I think we are very clear we are working towards a December opening."
He repeated this comment when pressed on what proportion of the resort's 2,200 rooms will be opening at this time.
Guardian Business understands that there is some unease among vendors who have been invited to open concessions within Baha Mar about to what extent the resort will be "fully open" come December 2014.
This newspaper understands that at least some of those entering the resort in time for the December opening are being offered three months free rent.
"Suppliers are still having their feet held to the fire for December, but they are giving the vendors three months free rent. It just clicked with me a short while ago that this may be because they are not anticipating there'll be many guests around.
"I know other companies want to get something in writing from them (Baha Mar) about what will be there come December before they sign anything," said a source with knowledge of the situation.
Seeking to allay airlift-related fears, Sawyer also pointed to what he called the "flawed notion" that seat capacity "drives demand" for Bahamian vacations.
He added: "I think we should address the flawed notion that seat capacity drives demand. It's the opposite. If we proceed from the premise that air seat capacity drives demand we'll end up in knots. What happens is that you would find air seat capacity rising and falling based on consumer demand."
Sawyer suggested that increases and falls in airlift coming into The Bahamas between 2010 and 2013, shown in U.S. Department of Transportation statistics obtained by this newspaper, mirror "the pattern of consumer demand" to the destination, rather than acting as a hindrance to people taking vacations to this country.
U.S. Department of Transportation data obtained by Guardian Business shows that in 2010 a total of 1.56 million seats entered Nassau's Lynden Pindling International Airport (LPIA) on 14,692 flights departing the U.S. In 2011, this figure fell by 10.2 percent to 1.4 million seats arriving on 12,715 flights. In 2012, the situation improved: Nassau was able to eclipse the 2010 seat figure as the level rose by 11.8 percent over the previous year to 1.56 million. These seats came in on 14,499 flights. In 2013, the picture turned gloomier, with seats falling by 8.9 percent to 1.42 million, arriving on 13,754 flights departing the U.S. For the year to date, up to July, seats coming into LPIA from North America rose by 3.4 percent to 930,933 as compared with 900,191 in the same period last year.

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Expert to explore feasibility of value-added trade strategy

July 21, 2014

Minister of Financial Services Ryan Pinder has brought in an international trade specialist to further the government's hope of introducing a "value-added trade strategy" to The Bahamas, which would encourage the partial manufacturing of products before global exportation as part of a global value chain.
At a press conference, Pinder claimed that the value-added trade strategy "has the potential of leveling our trade balances by simultaneously increasing our export of goods (namely value-added products) and services (for example, distribution, transportation and professional services)".
Pinder made the announcement ahead of the arrival of Dr. Sherry Stephenson, an official from the Organization of American States (OAS), who will conduct a study assessing the viability of The Bahamas becoming a part of a global value chain.
Pinder said: "Global trading trends are not supportive of a traditional industry concept of manufacturing a product from the ground up, meaning that one jurisdiction creates an entire product for export. Rather, there is a considerable demand for jurisdictions where inputs from various countries are brought together at a trade center where the production process might be advanced or completed. Such partial or finished products are then exported globally."
Freeport was specifically mentioned for having the necessary international trade logistics infrastructure for the creation of value-added trade centers.
Pinder described Freeport's logistics infrastructure as "arguably the best in the hemisphere...with the existing capacity to receive the anticipated Panamex-size ships that will arrive as a result of the expansion of the Panama Canal" as well as having the requisite shipyard repair facilities.
Pinder additionally listed the partial refinement of Brazilian sugar and poultry products as operations that could take place in The Bahamas as a way of penetrating the European market on a duty free and quota free basis, through The Bahamas' Economic Partnership Agreement (EPA) with Europe.
When asked how the strategy would fit with the country's accession to the World Trade Organization, (WTO), Pinder stated that The Bahamas experienced "tremendous support" for its accession during a recent conference in Geneva, Switzerland and a value-added trade strategy went "hand in hand with the WTO accession process" by ensuring the guaranteed right of Bahamian goods and services to access other markets.
"The government's pro-business, WTO-compliant incentive regime and the duty-free access to markets in Europe available to The Bahamas by virtue of its participation in the Economic Partnership Agreement, provide an almost perfect synergy for the business community to take maximum advantage of a value-added trade strategy," stated Pinder.
The minister also clarified that the strategy would compliment The Bahamas' current involvement with CARICOM, stating that it "works well with the regional integration plans of CARICOM without having The Bahamas committed to the CSME (CARICOM Single Market and Economy)".
Pinder and Stephenson will take part in a public panel entitled "Integrating Bahamian goods and services into global value chains" on Tuesday at 7 p.m. at the British Colonial Hilton hotel.

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GB Chamber: Island-wide duty concessions 'very stimulative'

July 21, 2014

The Grand Bahama Chamber of Commerce has welcomed news that the government is beginning consultations on extending duty free concessions on Grand Bahama, calling the move potentially "very stimulative" for the local economy.
Last week, the Ministry for Grand Bahama announced on July 18 that in conjunction with the Ministry of Finance, it will host a town hall meeting on "East and West Grand Bahama economic development regulation" on July 25.
The meeting comes after Prime Minister Perry Christie said in his budget communication that duty concessions on building materials for businesses outside of the port area in Grand Bahama would become a reality this fiscal year.
Should the government decide to move ahead with extending the concessions, it would be fulfilling a promise made in its election manifesto, a Charter for Governance, in 2012.
Barry Malcolm, president of the Grand Bahama Chamber of Commerce, said he was not aware that consultations were beginning, but expressed the view that such an initiative "could work well" for East and West Grand Bahama.
"If it follows the Freeport model, it will apply to goods for the development of businesses, so if I'm buying new machinery and equipment for a plant, that would qualify. That could be very good for Grand Bahama.
"But one would have to see the structure of it to see what it means," said Malcolm.
Malcolm said that duty concessions could be "very stimulative" for the economy and "cause it to grow".
"If you want to expand business activity, it could be very good long term," he added.
Talk of extending duty concessions outside of the port area comes at a time when Guardian Business understands that the Grand Bahama Chamber of Commerce is galvanizing to determine what it will propose to the government with respect to real property tax and business license fee exemptions that are set to expire in the port area in mid-2015.
Malcolm declined to comment when questioned on this topic yesterday, however Guardian Business understands that a "vision" paper has been drafted which is now being reviewed by chamber stakeholders.

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Bahamian movie in distribution deal 'first'

July 21, 2014

A Bahamian filmmaker has secured a deal with a Los Angeles-based distributor to show his film about the late Sir Lynden Oscar Pindling, the first prime minister of The Bahamas, at movie theaters in the U.S., The Bahamas and potentially beyond.
In a development which filmmaker Travolta Cooper, creator of "The Black Moses", said could bode well for Bahamian filmmakers as a whole, given its potential to see local investors in film fully rewarded for their financial involvement, the movie was picked up by Diversity Entertainment.
The join-up comes after Cooper had the film premiere on the closing night of the Bahamas International Film Festival. The movie also screened at the Cannes Film Festival in Cannes, France, in May of this year.
The Black Moses tells the story of Pindling's drive to bring social, economic and political change to The Bahamas and explores his controversial history.
It stars U.S. actor Dennis Haysbert, popularly known for his appearances in television show "24" and commercials for insurance company Allstate.
As a result of the distribution deal, the film, which cost $200,000 to produce and involved the work of four local Bahamians and several Bahamians abroad, in addition to Cooper himself, will run for a week in movie theaters in L.A. and New York.
On October 10 - Discovery Day weekend - the film will receive screenings at Galleria Cinemas throughout The Bahamas. After this, it will be available 'on demand' in The Bahamas and there is the potential for further showings in the U.S. and the Caribbean.
In a separate development, talks are also currently underway with PBS and Aspire T.V. in the U.S. for television broadcasting of the movie.
Cooper said: "Three companies were, in essence, bidding for the film. Diversity, a company out of L.A., Porter films, and we were talking to First Run Features out of New York. Diversity proved to be the best, as they had the best plan on how to get our investors as much money as possible."
While other local movie makers, including Maria Govan, director of 2008 movie "Rain", and Kareem Mortimer, director of "Children of God" and "Passage", have won accolades at film festivals and - in the case of "Rain" - DVD distribution, Cooper said he thinks this type of distribution in movie theaters is new.
He added: "Much of the work I've been doing with Galleria Cinemas as their brand ambassador is to move us beyond this film festival culture. Movies get lost in the festivals and some never see the light of day," said Cooper, who produces a web/TV show for Galleria Cinemas called "The Cinemas".
Cooper said he hopes the achievement will help other Bahamian filmmakers hoping to raise money for projects in the future.
"If one film can't give local investors their return then why move on to the next one? Why bother? This is an important step for the nation to try to figure out if we will have a sustainable film industry."
Under the plan put forward by Cooper, investors in the movie are promised their funds plus 20 percent, in addition to 10 percent of all net profits from the movie. The Black Moses involved eight Bahamian investors and three international, including Haysbert himself who acted for free.
Cooper credits Haysbert for allowing the movie to take on a new level of international success.
"It's such a little movie, but it's doing something so huge at the same time. I think Dennis Haysbert brought a star power to it," he said.
As for the potential for The Bahamas to become known for its movie industry, Cooper said the local industry will likely rise and fall with that of the region.
"I think it's going to take more than The Bahamas. I really think the Caribbean is going to have to come together as a region to make it happen. The Bahamas is 370,000, but the region is 40 million. Like anything that will drive a market it's your consumer, and if we had a more vibrant Caribbean audience, there would be no reason not to have more vibrant Caribbean industry. I think we're a small part of what could be a formidable and sustainable regional industry."

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Debit card fraud on the rise

July 21, 2014

The Clearing Banks Association (CBA) has warned of an increasing trend of debit card fraud and "ABM skimming".
In a recent statement, the CBA provided advice on reducing the risk of debit and credit card fraud.
"The CBA acknowledges that we have seen a trend toward debit card fraud and ABM skimming. To prevent debit card fraud, customers should never disclose their PIN to another person and always shield the keypad when typing their PIN.
"If customers receive unsolicited emails and phone calls asking for personal information and are not sure of the source, they should be wary and verify the authenticity of any request, as it may be a scam intended to solicit confidential information relative to their personal accounts. Customers should contact their banks immediately if they are concerned about fraud or suspect any fraud," it said.
The association also urged customers to be vigilant when it comes to managing their bank accounts.
While the association's bank members have not seen an increase in credit card fraud, the CBA said it "acknowledge(s) it as an ongoing challenge".
It added: "Our banks have zero tolerance for fraud. When there is even the slightest indication of a threat to our customers' accounts, we respond immediately and take appropriate action. We each have our own fraud detection processes and other security features in place to monitor transactions and highlight questionable or unusual account activities.
"We advise all customers that one of the most important things they can do to protect themselves is to review their account balances and activity on a regular basis using Internet banking, monthly account statements, branch visits and any other facilities provided by their bank in this regard. Report any irregularities immediately."
Customers are also advised to let their banks know of any travel plans.
"This is to avoid the inconvenience of possible fraud prevention blocks on their cards by Visa or MasterCard monitoring teams when suspicious or unusual overseas transactions are detected," said the statement.

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Pinder: Negotiation ongoing over OECD exchange standard

July 21, 2014

Minister of Financial Services Ryan Pinder has stated that while the government would never "jeopardize the reputation of the country" in the financial services industry, extensive negotiations are still required to comply with a recent international financial mandate.
Pinder yesterday addressed the release of the Organization for Economic Co-operation and Development's (OECD) full version of its global standard for automatic exchange of information, which the organization said seeks to increase transparency and put an end to banking secrecy in tax matters.
"We do have some concerns about how it's to be implemented and we've expressed to the OECD as a small developing country some of the areas that may be impractical... We have provided suggestions to the OECD on how best to implement a standard going forward."
Pinder specifically had concerns regarding the standard's provisions with respect to spontaneous exchange of account information and discrepancies regarding document retention within the multilateral convention, which comprises some 150 countries.
"There are some provisions, such as spontaneous exchange of information, that we believe are impossible for us to do with 150 different countries that are signatories, to be able to know what we're supposed to produce," claimed Pinder.
These remarks echoed Pinder's previous comments made during the 2014 STEP Caribbean Conference in May, where he claimed: "It is impossible for a financial center to be able to have the capacity to identify - for over 100 different tax systems and laws - what might be a transaction for tax avoidance purposes.
"We believe, for example, that this scope should likewise be subject to a bilateral agreement where such transactions are listed, rather than leave it to chance and guessing."
He additionally took issue with a clause within the OECD guidance, which stated that any automatic exchange where the receiving country lacked the proper "legal framework and administrative capacity" to ensure confidentiality was not "appropriate".
However, Pinder acknowledged that the standard was "something that the world globally is moving towards", and he is in ongoing discussions with the financial services industry and the OECD on how to best position The Bahamas moving forward.
"We will never put The Bahamas in a position where it's blacklisted, or any other type of negative implication of noncompliance, but we're also responsible to our industry," stated Pinder.
"We are not jeopardizing the industry and not jeopardizing the reputation of the country... We're not confrontational or belligerent, but we believe we have some very fundamental suggestions in that area."

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Andros farm: Mailboat system overhaul needed

July 21, 2014

A Bahamian farm has welcomed the educational efforts of the Bahamas Agriculture and Marine Science Institute (BAMSI), while calling for upgrades to the antiquated mailboat system on which inter-island produce sales rely.
Chavara Roker-Eneas, president of Andros-based Chiccharney Farms, stated that the farm had entered a "mentorship program" with BAMSI for perfecting cultivation of specific crops and was optimistic about closer cooperation between local farmers and BAMSI in the near future.
"We look forward to working with the government to ensure that the BAMSI project is a success," said Roker-Eneas, adding that standardized growing programs introduced by BAMSI could dramatically cut down on the country's dependency on imports by increasing local crop yields and providing greater quality consistency.
However, Roker-Eneas hoped that BAMSI's launch would lead to an overhaul in the country's shipping process, stating that the current system leaves much to be desired.
"With the government moving forward to implement the BAMSI project...there should be some upgrades done to the mailboat system, because it's the only system that we use to transport stuff on a large scale from the Family Islands," stated Roker-Eneas.
Assistant Director of Agriculture Dr. Kenneth Richardson last week stated in an interview with Guardian Business that logistical issues with crop transport would require New Providence to remain an integral hub within the industry.
"I don't think there's anything wrong with setting up BAMSI there in North Andros," said Richardson. "That's ideal, but I think that some of the things that they are going to attempt to do there may best be done here because New Providence has farmers that have to be served, as well as the Family Islands."
The $20 million North Andros-based institute is currently scheduled to open in September.
Roker-Eneas also echoed comments made last week by a Ministry of Agriculture official that the country's looming value-added tax (VAT) could provide an unexpected benefit for the Bahamian agricultural sector.
"When they implement VAT, it will force a lot of persons to want to buy local [produce], especially if they have to pay more taxes on what they're purchasing in the store."
Chiccharney Farm has seen "tremendous" growth in the past nine months after working independently of the government's produce exchange, according to Roker-Eneas.
The farm launched a new retail program last September, which compiles boxes of seasonal produce in $25, $50 and $100 packages, which are delivered directly to customers through the mail boat, free of charge.
"That's really sustained us on a daily basis...we're growing and looking at expanding and the possibility of us opening a storefront so that we would be able to have our clients come to us."
The farm began targeting local restaurants, hotels and supermarkets as demand for locally grown produce rose. Among Chiccharney's partners is the Melia Nassau Beach Hotel, which will be incorporated into the Baha Mar resort.
"They are more interested in buying local Bahamian produce," said Roker-Eneas, due to the longevity, freshness and quality of the produce.
"Bahamian farmers can grow at an even better quality than the [produce] that we import into this country...I know that it is viable for agriculture to succeed in this country, but it requires a lot of work and it appears that only a small percentage of persons are willing to work hard in the field of agriculture... It takes a lot of commitment."

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Palm Cay marina gets enthusiastic reviews on boaters' site

July 21, 2014

Palm Cay Marina & Beach Club, the 194-slip marina that opened earlier this year in an active residential community on New Providence's southeast coast, is getting rave reviews from visiting yachtsmen on a website known as the TripAdvisor for the boating world.
"We have been blown away by the compliments about the marina on a website called ActiveCaptain," said Zack Bonczek, Palm Cay director of sales and marketing. Like TripAdvisor, ActiveCaptain.com allows users of a facility to report on their experiences, the only difference being that the latter is aimed at those who go by boat. Reviews cannot be taken down or amended by a marina.
"We got comments like 'The docks are beautiful and the beach is superb. This is a first class marina that will only get better'. That was from the captain of a boat from Newburyport, Massachusetts," said Bonczek. Nearly every one of the reviewers rated Palm Cay five stars, the top ranking.
A boater from Portland, Ore. called it 'Nassau Sanctuary,' and wrote, "We are kicking ourselves for not going to Palm Cay Marina sooner...If you need to be in Nassau for a while and want some place where you can watch the turtles and hear the birds and wander safely at night, Palm Cay is worth checking out."
Other boaters cited rates they called attractive, availability of gas and diesel fuel, showers, laundry, 'the quiet of being out of town', use of a courtesy car, security, pools, beachfront and restaurant. They also spoke of the location in Yamacraw that slices about six miles off a sail from Nassau to the northern Exumas. One guest stayed 26 days and reported "off the beaten path...class without the cost".
"A lot of thought went into the design and construction of this multimillion-dollar marina," said Bonczek. "From the pilings to the docks to the harbormaster's office to the triple source energy supply, the developers went first class all the way. They were committed to creating a lively, friendly, secure, relaxed atmosphere to attract a mix of local boaters who would keep their boats here year-round and transients who would enjoy the marina and the community offerings for shorter periods of time, usually on their way to or from the Exumas."
Bonczek said there was one comment that trumped the rest. "Of all the comments and compliments, the one we liked most was the simple four words, 'We will be returning'."
Palm Cay is a quickly developing secure community of 300 townhomes, condos and single family lots and residences with a Family Island feel, created in part by its 1500' feet of shoreline and 1,200 feet of wide, white sand beach. Amenities include swimming pools, lighted tennis courts, family playground and the Billfish Grill, a popular restaurant overlooking the water. The family-oriented marina community is also home to numerous events and activities.

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New Palm Cay Marina Gets Rave Reviews on Int'l Boaters Site
New Palm Cay Marina Gets Rave Reviews on Int'l Boaters Site

July 21, 2014

Palm Cay Marina & Beach Club, the 194-slip marina that opened earlier this year...

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Melia Supports Local Farmers Hotel Features Field to Table Fare

July 21, 2014

When a guest orders dinner at the Melia Nassau Beach on Cable Beach, chances are there’s a little something special on the plate...

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Builder defends 20m contract

July 21, 2014

GOVERNMENT-hired builder Rev Lloyd Smith has defended his construction firm Holiday Industrial Builders International (HIBI) insisting that during the arbitration process, which followed a "politically motivated" contract termination, he pocketed nearly $10 million as there was no evidence that his work did not meet coding standards...

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Concerns as airlift falls 8.5 percent in four years

July 20, 2014

The head of Atlantis has expressed anxiety over the level of airlift coming into the country from The Bahamas' major source market ahead of the opening of Baha Mar, after official figures obtained show that such airlift into Nassau declined by 8.5 percent in the four years between 2010 and 2013.
George Markantonis, president and managing director of Atlantis, told Guardian Business that the number of seats coming into Nassau is presently "not adequate" to support both resorts, despite a slight uptick of 3.4 percent in the numbers in 2014.
However, other key stakeholders, including the head of the Nassau Airport Development Company and the Bahamas Hotel and Tourism Association (BHTA), were more circumspect about the decline in recent years and expressed optimism sufficient airlift will be in place when Baha Mar opens in December.
U.S. Department of Transportation data obtained by Guardian Business shows that in 2010 a total of 1.56 million seats entered Nassau's Lynden Pindling International Airport (LPIA) on 14,692 flights departing the U.S. In 2011, this figure fell by 10.2 percent to 1.4 million seats arriving on 12,715 flights. In 2012, the situation improved: Nassau was able to eclipse the 2010 seat figure as the level rose by 11.8 percent over the previous year to 1.56 million. These seats came in on 14,499 flights.
In 2013, the picture again turned gloomier, with seats falling by 8.9 percent to 1.42 million, arriving on 13,754 flights departing the U.S.
For the year to date, up to July, seats coming into LPIA from North America rose by 3.4 percent to 930,933 as compared with 900,191 in the same period last year.
The fall revealed over the past four years has come despite ongoing efforts by the Ministry of Tourism, its hotel partners and the airport to increase the number of flights coming into the country from the main tourism source market of North America.
Asked to comment on the data, Markantonis said: "If indeed we have had seat slippage over the last four years from our main source market, then we are obviously concerned. Certainly we have been making a lot of efforts from the promotion board side and in conjunction with the Ministry of Tourism to increase our airlift and particularly now that we have a new state-of-the-art airport, but I don't think we have adequate airlift to handle the new property coming on stream, at least not as yet. Hopefully measures are being implemented to remedy that."
In addition to not representing all of the airlift coming into the country, given that the figures relate solely to the North American market, the U.S. Department of Transportation data also does not indicate how many of the seats were sold/occupied.
However, it does come on top of declines recorded in airlift from at least one other source market - the United Kingdom (U.K.). Earlier this year, Stuart Bowe, president of the Bahamas Hotel and Tourism Association (BHTA), revealed that visitor arrivals from the U.K. had fallen by 40 percent in the six years leading up to 2013.
In 2007, stopover visitor arrival figures from the U.K. were 40,261, which has declined to 23,979 in 2013.
Contacted for comment on Friday, Baha Mar Senior Vice President of Administration and External Affairs Robert Sands did not return messages up to press time.
However, Vernice Walkine, chief executive officer of Nassau Airport Development Company (NAD), downplayed the figures, suggesting there is little cause for concern that adequate airlift will be in place when Baha Mar opens.
"The key stakeholders (Ministry of Tourism, Nassau Paradise Island Promotion Board and Nassau Airport Development Company) have formed an airlift strategic group to determine best options to meet the needs of the destination. The strategy to secure seats for Baha Mar is well-developed and there will soon be announcements of additional capacity to meet the demands of the incremental rooms at Baha Mar. The seats will not precede the demand and the demand comes with the opening of the rooms.
Walkine said it is not unusual to see a decline in the number of seats from time to time, as airlines regularly "rationalize" seats according to demand.
"This simply means that they up-gauge or down-gauge according to demand. They swap out aircraft during key peaks and valleys according to maximum utilization. The load factors on all major routes into Nassau are very high, meaning that the airlines get good yields on those routes," she said.
Whether or not there will be enough airlift also depends on the level of demand for flights into The Bahamas. This in turn relates to how many rooms are available to be purchased and the level of interest in buying them.
Markantonis, on Atlantis' part, said that he expects the hotel's recent signing with Marriott International, which will see Atlantis join its "Autograph Collection" come September, to increase demand for the Paradise Island resort beyond what currently exists. As a result of the signing, Atlantis will be accessible via Marriott's booking systems and visitors can earn and redeem loyalty program points by staying at the resort, which is expected to create an additional incentive for visitors to book stays.
"The combination of Baha Mar opening and the Marriott deal with Atlantis suddenly puts extra urgency on the situation. If our arrangement with Autograph and Marriott does attract a whole new segment of customers, then again it becomes critical that we have adequate airlift for them; they have to be able to get here," said Markantonis.
At Baha Mar, the amount of demand and airlift needed will depend on how many rooms are operational. Some have questioned how many rooms will be marketed as available for reservations in December 2014, given the current status of construction and outfitting at the resort.
Sands, in an interview with Guardian Business last week, declined to comment when asked exactly to what extent the resort will be fully operational come December's opening.
"I think we are very clear we are working towards a December opening," said Sands, repeating this comment when pressed on what proportion of the resort's 2,200 rooms will be opening at this time.
BHTA President Stuart Bowe, commenting on the U.S. data on Friday, said his organization is "well aware" that there was a decline in the number of seats coming into The Bahamas in 2013.
Noting that the industry, in collaboration with the Nassau Airport Development Company, the Ministry of Tourism and the Nassau Paradise Island Promotion Board, commenced efforts in 2012 to attract new airlift to restore what had been lost and to build traffic to support the additional lift needed because of Baha Mar and other tourism developments, Sands said that this has resulted in a number of successes.
"To date this year we've successfully been able to attract new airlift from Southwest Airlines, United Airlines, Jet Blue and Delta. Sunwing flights are coming into Grand Bahama. Bahamasair added direct lift from stateside destinations recently. As all of these announced flights come on stream throughout the year, we will see an uptick in airlift to the destination.
Bowe added that discussions are continuing with existing carriers, potential new carriers and with charter operators to "attract more needed airlift" in anticipation of Baha Mar's opening.

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IMF: Speed up energy reform to boost growth

July 20, 2014

The International Monetary Fund (IMF) has urged the government to "accelerate" efforts toward reforming the energy sector in order to help create the conditions to "strengthen and diversify" growth in The Bahamas.
The IMF also pressed for the government to finalize value-added tax (VAT) legislation, calling the tax "key" to fiscal consolidation efforts that should boost investor confidence.
The Washington, D.C.-based multilateral financial institution made these comments in a statement released following a staff visit to The Bahamas from July 14 to 18 as part of regular consultations with the government.
The IMF met with senior government officials and representatives of the private sector during its visit.
In a statement following the visit, in which it provided a brief assessment of the state of the economy and its prospects, the IMF noted that economic activity is recovering, but "momentum remains weak". The country recorded just 0.7 percent growth last year and expects 1.2 percent this year.
Noting the expectation that Baha Mar will help to improve the external trade balance, boosting tourism earnings and containing the need to
engage in foreign borrowing to shore up reserves as the government did last year, the officials nonetheless pointed to the need for the government to find other sources of growth going forward.
"The staff team welcomed the anticipated improvement to the external balance from the soon-to-be opened Baha Mar project, which would boost tourism earnings and contain official external borrowing to shore up reserves. The team counseled efforts to strengthen and diversify growth, in light of continuing high unemployment levels. In this context, the team urged accelerated implementation of planned reform of the energy sector," read the statement from the mission, led by IMF Mission Chief for The Bahamas Mbuyamu Matungulu.
The IMF's comments come as progress toward the planned overhaul of the Bahamas Electricity Corporation (BEC), in efforts to reduce energy costs which are a widely-acknowledged deterrent to investment and growth, has been delayed by as much as seven months. In August 2013, the government said it would delay initiatives intended to encourage the introduction of renewable energy until after the efforts to overhaul BEC are completed. In the meantime, focus in public statements emanating from the Christie administration has been on issues such as VAT, gaming legislation intended to regularize the web shops and other matters.
On the topic of VAT, the IMF mission, noted that fiscal consolidation efforts "have begun", but said the pace of this "could be frustrated by delays" in the tax's introduction. The government announced in May that it would push back the introduction of VAT to January 2015, from July 2014.
The IMF said it expressed support for fiscal consolidation efforts in meetings with the government, calling it "essential to boosting investor confidence, further improving the growth outlook and strengthening employment prospects".
It added: "The mission emphasized the key role to be played by the VAT in that context. In this regard, the team encouraged the authorities to finalize the agreed VAT legislation to ensure the successful introduction of this key reform."
The mission noted that economic activity is recovering, but at a weak pace, with economic growth coming in preliminarily at 0.7 percent last year, and forecast at 1.2 percent this year.
It said: "Preliminary data suggest that the fiscal deficit declined to 4.5 percent of GDP, from 5.4 percent in the previous fiscal year. The deficit is projected to narrow further to just under 4 percent of GDP in the 2014/2015 fiscal year, provided that the VAT is introduced in the coming months."
The mission described the country's external position as improving due to the fact that the current account deficit declined to 16.6 percent of GDP in 2014, compared to 19.4 percent in 2013. This came amid a strengthening of the country's external reserves. The government borrowed $300 million in foreign currency last year to shore up foreign reserves.
The IMF described the financial sector as well capitalized and highly liquid, but lumped with a "sizable and aging stock of non-performing loans (NPLs)".
It added: "The mission welcomed the continued strength of the financial system, in the face of both high level of NPLs and a rapidly changing supervisory framework. In this respect, it urged continued close monitoring of credit risks and supported government efforts at implementing appropriate domestic and international supervisory policies, including those as recommended by the IMF's recent Financial Sector Assessment Program (FSAP)."

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Chamber: Unemployment drop 'encouraging'

July 20, 2014

An official from the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) has welcomed the "encouraging" drop in national unemployment revealed in a recent Department of Statistics report, while encouraging the government to do more to encourage entrepreneurialism.
BCCEC Chief Executive Officer Edison Sumner said: "It's certainly very encouraging that the level of unemployment has gone down...whether it's through self-employment exercises or gainful employment in established companies."
The Department of Statistics released its most recent labor force survey on Friday. The survey showed that the country's unemployment rate has fallen to 14.3 percent, down from 15.4 percent in November 2013.
"The levels of unemployment are going to go down based on some of the other things we're seeing happening. Of course, we are very heavily reliant on the opening of Baha Mar, which is coming on stream...we see that they have begun taking persons out of their leadership development programs, who they're now putting into job placements," added Sumner.
"Apart from persons looking for gainful employment, we would strongly recommend...that the government [create] an enabling environment for individuals in this country to be able to pursue their dreams of entrepreneurship and job ownership rather than necessarily looking for a job."
Sumner tied the unemployment figures back to the issue of brain drain in the country and called on the government to tap into the Bahamian diaspora and encourage educated Bahamians to return to the country to bolster employment.
"When you look at the creativity and ingenuity of those persons...I believe that we can create even more jobs and opportunities from those kinds of experiences," stated Sumner, while expressing hope that the decreasing trend of unemployment rates continues.
"We are encouraged by the numbers. We know that there are a number of projects on the way that will hopefully continue to reduce those numbers, and we would ideally like to see the level of unemployment...below 10 percent," said Sumner.
Both New Providence and Grand Bahama experienced decreases in their unemployment rates, falling to 15 percent and 14.7 percent, respectively. Grand Bahama experienced a significant drop in its unemployment rate, falling over 2 percent, from 16.8 percent in November 2013.
The number of discouraged workers in the country also fell roughly 28 percent from 6,765 to 4,880 during the same time period. Unemployment among Bahamians aged 15 to 24 remained considerably higher than any other age demographic, at 28 percent; though this also constituted a decrease compared to November's figures.
In a statement issued Friday afternoon, Minister of State for Finance Michael Halkitis claimed that youth unemployment remains a concern.
"Overall, the survey paints a picture of a gradual improvement in the labor market in line with the gradual strengthening of the Bahamian economy," he said.
The report additionally revealed a slight discrepancy between the unemployment rate for men and women. The rate of women's unemployment remained slightly higher than that of men, at 15.3 percent compared to 13.5 percent. Department of Statistics Statistician Cypreanna Winters largely attributed this to the construction and hospitality industries.

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Dive association: More regulation of foreign dive operations 'urgent'

July 20, 2014

The president of the Bahamas Diving Association (BDA) has pledged to work with the government to ensure stronger regulation of foreign dive boats operating in Bahamian waters, claiming that worldwide publicity surrounding the recent disappearance of a man on a shark dive poses a threat to the multimillion-dollar local industry.
Neal Watson said it would be an "understatement" to suggest that the BDA might be concerned about the industry's reputation following media reports which circulated globally about the disappearance of diver John Petty while on a shark dive with a U.S.-registered diving operation.
"For over 30 years The Bahamas has been safely putting tens of thousands of divers in the water with sharks," said Watson in an interview with Guardian Business.
"None of the media says this fatality occurred on a U.S.-based vessel operating out of Florida; it says a 'Scuba diver dies in The Bahamas'.
"These guys come, do things that create negative publicity and then pull up anchor and go home."
While it is not proven that the dive company did anything wrong, Watson suggested that, in trying to accommodate wildlife photography enthusiasts who are trying to capture "that 'gee-whiz' money shot", they conduct their shark dives in a manner that is not consistent with standards set out for members of the Bahamas Diving Association.
Petty, 63, was last seen last Sunday after entering the water during a tiger shark dive with Florida-based Jim Abernethy's Scuba Adventures.
Petty is believed to have been attacked by a shark; although his body has never been recovered, a dive mask that showed signs of such an attack was found. The incident is under investigation by the U.S. Coast Guard and the Bahamas government.
In the days following Petty's disappearance, some including veteran Bahamian diver David Rose have called for an end to shark dives, claiming they are inherently too dangerous.
Watson says that line of thinking has got the local industry worried.
"There's a lot of concern. If a hotel goes to government and says we have concern that our hotel guests won't go in the water due to shark attacks, there's a possibility government will be so concerned about interactive shark dives that they would say 'We don't want to do this anymore', and that would be an enormous economic catastrophe for The Bahamas. We've done this safely for 30 years, and it's generated tens of millions of dollars for the economy," said Watson.
In a statement forwarded by the Bahamas Ministry of Tourism, Watson sought to highlight the fact that the dive operation that Petty was with is not affiliated with the Bahamas Diving Association in any way.
"Jim Abernethy's Scuba Adventures, nor the M/V Shear Water, is a Bahamian-owned or based business and is not a member of the Bahamas Diving Association," said Watson.
Speaking with Guardian Business, Watson said that the Bahamas Diving Association had some time ago called for a "cease and desist" of dives like that being conducted by Jim Abernethy, including non-cage dives conducted with "known species of potentially dangerous sharks".
In 2011, Abernethy himself was bitten during a dive operation in The Bahamas, while in 2008 another diver on an expedition led by Abernethy's company was killed by a shark bite.
Now, Watson said, more "urgency" has been brought to ongoing dialogue between the Bahamas Diving Association and the government over introducing more regulation of such activities by foreign dive operators.
He added that the situation is exacerbated by the fact that foreign "live aboard" dive boats bring much less into the local economy than their Bahamian counterparts, as they enter and leave the country without buying locally or paying much tax.
For example, the operations do not have to obtain work permits for foreign crew or duty on imported equipment. They often may not fuel their boats in The Bahamas. And their guests do not buy into the local economy via hotel stays, restaurant visits and car rentals.
"We think it should be a requirement that if a foreign commercial boat wants to run a business in The Bahamas, they should have to base in The Bahamas," the veteran diver said.
A message left seeking comment from Jim Abernethy's Scuba Adventures was not returned up to press time.

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Coalition on wage rise: 'Entitlement' mindset must shift

July 20, 2014

Prominent members of the business sector have supported a wage increase for members of the public sector, while warning that the country's workforce needs to shift away from a mentality of "entitlement" toward increased productivity and the government should consider downsizing overall.
Speaking with Guardian Business, Co-chairman of the Coalition for Responsible Taxation Gowon Bowe stated that the wage increase in a recent industrial agreement between the government and the Bahamas Public Services Union (BPSU) was "not an unreasonable dollar amount", given that the cost of living has outpaced minimum wage increases.
"The dollar amount I don't have any objection to and I don't think people will in general. However...[the government] really needs to look at the size of the civil service and develop a plan to rationalize that without causing a major disturbance to unemployment," Bowe said.
"The only way of doing that is increasing economy activity so the private sector can absorb those that [government] would want to disengage," said Bowe.
Although the wage increase will provide a short-term boon to the BPSU, Bowe argued that it was not a panacea, and that wider educational reform was required to increase the competency and marketability of The Bahamas' workforce.
"In reality, what we should be doing as a country is focusing on improving the quality and education standards of the individuals so that it increases their marketability.
"In most places in the world, your wage rate is usually determined by your competency and your performance. We have to start to get to the mindset where there's no entitlement of a minimum wage, but actually an earning of the minimum wage through your effort and competency and the skill set that you bring."
The government signed an industrial agreement with the BPSU on Thursday which will increase the minimum wage of its nearly 2,000 members for the union by $800 annually.
"In times when the government and the private sector are still heavily going through the actual recession and the recovery, we have to be very careful that we are not setting up a precedent by which people are asking for an amount that [exceeds] what we are able to pay," claimed Bowe.
"And right now, any excess dollar is one that the government cannot afford. The union as well as the civil service must be mindful [that] if the government has a quota or a mandate on how much you can spend on salaries, it can increase the wages of individuals, but it means that the number of individuals it can pay must be reduced."
Bahamas Chamber of Commerce and Employers Confederation (BCCEC) CEO Edison Sumner described the agreement as "a wonderful thing" but similarly called for increases to worker productivity.
"We'd like to see every worker in the country treated fairly, whether they are the public service or the private service...and paid proportionately for the work that they provide and produce for their employers."
However, Sumner warned that future wage increases should be provided on the basis of increased levels of productivity from the workforce, not solely because they are demanded,
"[Workers] need to improve themselves educationally, vocationally and experientially so that they become more valuable to their employers...and themselves," said Sumner.
"We can't expect the employer to carry that burden."
Minister of State for Finance Michael Halkitis claimed that the new agreement, which pushes the annual wage for BPSU members from $10,700 to $11,500, was acceptable for both the government and BPSU.
"As we all know, these are very challenging fiscal times and we have asked all public sector unions to work along with us as we maneuver through this very rough financial time," stated Halkitis.
Officials did not provide a figure for the total cost to the government.
The minimum wage is currently $210 and $150 per week for government employees and private sector employees, respectively.

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Cooperative business plan competition launched

July 20, 2014

An official from the Bahamas Co-operative League Limited (BCLL) has expressed hope that an upcoming business plan competition will act as a "catalyst" for revitalizing Bahamian cooperatives.
BCLL General Manager Stephanie Missick-Jones hopes that the organization's first cooperative business plan competition will kick-start interest in the cooperative business model.
"We want to use competition as a catalyst to educate and remind people of the business model," said Missick-Jones, adding that cooperatives should be appealing to aspiring businesspersons with low amounts of capital, as they encourage groups to pool resources.
The competition, a collaboration between the Department of Cooperative Development (DCD) and BCLL, will accept applications for eligible cooperative business plans until August 15. Applying cooperatives are required to have at least 10 founding members, submit a business plan and provide a web presence.
DCD Cooperative Officer Quintin Percentie stated that the organizations will provide up to $5,000 in start-up funding for the winner, $3,000 for the runner-up and $2,000 for third place.
Percentie added that the competition aims to encourage "people helping people to help themselves" and claimed that Bahamian cooperatives, comprising both financial and goods/service-based businesses, currently represent 40,000 members and $300 million in assets.
Brett Lashley, entrepreneur and consultant for the cooperative development business plan competition, stated that the organizations will soon launch a lecture series.
"In the month of September we'll have our Cooperative Expo...where Bahamians will be able to showcase and be able to see what the cooperative business has been doing for 40 years," said Lashley.
BCLL will assist with sponsoring the event and will release a cooperative training schedule leading up to the competition's deadline. Both Lashley and Missick-Jones stressed that all applicants would benefit from the competition, not just the winners.
"Even if you aren't one of those top three, there will some opportunities available to you...as long as you're committed to it, we'll find the resources to get you started," said Lashley.

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Andros farm benefits from Melia hotel partnership

July 20, 2014

A local farm operation is getting a major boost after the Melia Nassau Beach Hotel took the decision to source Bahamian-grown produce from the company.
The link between the hotel and local farmers is getting rave reviews from foodies and those whose livelihoods are blooming. Chiccharney Farms in North Andros began working with the hotel that will be part of the Baha Mar resort more than one year ago. The company met with chefs and went through product sampling and selection.
In September, Chiccharney began providing produce in bulk for Melia, the Spanish-based chain with 350 hotels in 30 countries, a network that now includes the former Wyndham.
"We're excited," said Chavara Roker-Eneas, president of Chiccharney. "What Melia is doing empowers a whole lot of people."
Chiccharney has already re-branded and expanded, thanks to an increasing commercial appetite for locally-grown produce and its contract with Melia, providing sweet potatoes, onions, habaneros, limes, Haden mangoes, arugula, thyme, watermelon and avocados. More leafy vegetables are planned. Organic produce is also available.
"Melia orders in bulk," says Roker-Eneas, a third generation farmer. "One order can consume what it would have taken 12 weeks to grow." If Chiccharney runs out of sweet potatoes or onions, it partners with other farmers in Nassau, including Lucayan Farms, to provide produce.
For Melia, which is planning to open several new restaurants with different themes, doing business with local growers and suppliers is part of a corporate culture that not only benefits the local economy but allows hotel guests to enjoy local fare.
"Melia Nassau Beach is committed to long-term economic and environmental growth. Efforts to empower local farmers, both from Nassau and the Family Islands, are a staple in Melia's pledge to give its guests the highest quality goods while sustaining the environment," said Andrew Tilley, Melia's general manager. It's a commitment that plants all the right seeds for growth in farmers' minds.
"The partnership is great for us," said Roker-Eneas, who is willing to work as hard as she has to in order to maintain her company's reputation of quality and consistency in the fresh produce market,that's known to be demanding and finicky. "Nothing that is worth doing comes easy," she said. "We do almost everything ourselves. Throughout the entire process since we started working with Melia, I was pregnant. I was packing and lifting boxes, making deliveries, up to two weeks before delivery." Her son is now six weeks old and the new mom is already looking to the future, with plans to launch a storefront this fall.
As for Melia, identifying willing suppliers has been easier than expected in The Bahamas.
"We will soon reveal our sea-to-shore specialties that will do for the fishing industry what we hope our fresh produce purchasing commitment is doing for farming," said Tilley. "The best thing is that the guests love it, because they want to experience what the country has to offer."

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