Fresh winds are blowing through the Bahamas.
Former owners of the Paradise Island Resort and Casino and the Crystal Palace Resort in Nassau have sold to new management. The switch means a new approach to tourism at properties that both compete with South Florida and attract area residents.
The biggest change is under way at the Paradise Island resort, which was sold in May by entertainment mogul Merv Griffin to Sun International, a South African resort operator.
At the Crystal Palace, new owner Phil Ruffin, a Wichita businessman, is just settling into the 857-room resort. He bought it only two weeks ago but already has a deal to add Marriott to the name.
Both owners face multiple challenges.
Tourism to the Bahamas declined in 1990, chiefly because of hard times in the Northeastern states that are a key market for casinos in the Bahamas.
And the gaming market is changing. New casino venues seem to open in North America daily. Looming on the horizon in the Caribbean is the possibility of a free Cuba.
Scott Berman, director of hospitality and casino consulting for Coopers & Lybrand in Miami, said the opportunity to gamble is becoming more com-mon-place.
“There’s a lot of competition,” Berman said. “A lot more than when those casinos first opened.”
None of that makes much of an impression on Sol Kerzner, the chairman of Sun International, one of the biggest entrepreneurs in South Africa.
Kerzner is on a crash schedule to transform the Paradise Island resort. He has a 1,000-man construction crew working night and day to rebuild the property as an underwater adventure land.
Kerzner’s goal is to complete $125 million worth of construction in seven months and to open by Dec. 15 in time for the high winter season of tourism to the Bahamas.
“The whole idea is to make the aquarium side of this really very natural,” Kerzner said.
To fill the 1,156 rooms at Paradise Island, Kerzner is building a series of water features into the grounds surrounding the hotel and casino.
Under construction is a 10-acre lagoon that will allow seawater to flow from the beach side of the island to the harbor side. The lagoon will be filled with artifical reef formations and, dug to a depth of 20 feet, will accommodate scuba and snorkel divers.
Also under construction is Predator’s Pool, a landscaped tank stocked with sharks, barracudas and stringrays, that can be viewed through a 90-foot acrylic tunnel running 14 feet below the surface of the tank.
Rounding out the water features is the twisting, 300-foot Lazy River ride, a freshwater swimming pool with a sandy bottom landscaped to look like a natural pool, a children’s pool, a lap pool and a pair of waterfalls that will combine to provide 800 feet of cascading water.
Kerzner is banking that this transformation will make Paradise Island the top resort attraction in the Caribbean.
Across the narrow channel that separates Paradise Island from New Providence, the Crystal Palace Resort and Casino poses competition. Both resorts offer 30,000 square feet of casino space.
In addition, Ruffin paid only $80 million for the Crystal Palace in August from Carnival Corp., while Kerzner paid about $130 million for the Paradise Island resort.
Ruffin, who owns several other Marriott hotels, expects to start promoting his hotel as the Marriott Resort and Crystal Palace Casino soon.
A chain affiliation is good news for the Bahamas, because Ruffin can capitalize on the reservations network and promotional clout of Marriott. He also plans to put about $30 million into room renovations, tile, a new entrance and redecorating to tone down the bright colors favored by Carnival.
“We’re going to get rid of some of the pink,” he said.
Both Ruffin and Kerzner hope the worst of the Bahamas tourism slump is behind them. Ruffin said occupancy has been running close to 70 percent at the Crystal Palace so far this year.
Berman said there is a good chance the new owners have timed their purchases right.
“From my vantage point, the Bahamas is coming out of its rut,” Berman said.
Sun International, which owns 33 other casino/hotels in Africa and Europe, has a good track record and is making the capital investment long needed at Paradise Island, Berman said. “I think Sun has certainly impressed everyone,” he said.
Although the spread of gambling has created competition, Berman said the odds are good that Kerzner will succeed in getting a large number of new customers.
That could create some competitive heat for resorts in South Florida, Berman said, and for any location that depends on the sun and sand formula.
Florida voters will decide in November whether resort operators will get another competitive weapon in the form of casino gambling. Berman said voter approval of more than one or two casinos in Florida would hurt the Bahamas.
But with its entry into the Western hemisphere, Sun International is signaling that it wants to be considered a player in the North American market.
“This property will put a number of resorts on notice,” Berman said. “They’ll have to be reactive.”
“The competitive nature of the resort business is at an all-time high,” he said. “Resorts in Florida have to be alert to the competitive field.”
