The plan for a $300 million cruise destination in Freeport, Bahamas may need to be adjusted given the major changes in the cruise industry.
The Bahamas tourism and aviation minister told Tribune Business that the sale of the Grand Lucayan resort and redevelopment of Freeport is still a go, but the deal will need to be adjusted from what was originally planned.
Dionisio D’Aguilar said the Royal Caribbean joint venture, Holistica, "still seem to be interested" in the redevelopment, but need to restructure the terms of the deal because of the major blow to the cruise industry COVID-19 and associated shutdown have had on the cruise industry.
Holistica is a new company formed between Royal Caribbean and ITM Group that seeks to develop cruise ports around the world.
“It may not be the deal we had prior to March 3, but to say it’s not going anywhere would be an incorrect conclusion. They [the Holistica partners] still seem very interested, and you have a wiling seller and a willing buyer negotiating terms. The willingness is still there.”
Mr. D’Aguilar did not disclose details on the ongoing negotiations between the government and Holistica.
In early March, Royal Caribbean announced a multi-phase project that will redevelop the Freeport cruise ship terminal to bring a new world-class destination with a one-of-a-kind hotel, convention center, water adventure park and more.
He did say that Royal Caribbean and ITM may be adjusting their valuation and projections given COVID-19’s continued devastating impact on the cruise business and tourism in general.
"Obviously August 2020 is not the same as February 2020, so obviously you are going to change some terms to take into consideration the facts have changed. It’s very unfortunate, but it is what it is."
Mr D’Aguilar also conceded that talks on the Freeport Harbour component of the deal, which are taking place between IBM/Royal Caribbean and the Hutchison Whampoa-controlled Freeport Harbour Company, “need to be concluded”, although he added: “I’m advised it’s moving in the right direction.”
#With the Bahamian economy shut down for four to five of the past six months, the minister said Royal Caribbean/ITM’s construction start still remains delayed by around six months.