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Partnering Baha Mar
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Partnering Baha Mar

Multi-billion-dollar mega-resort chooses best-in-class strategic brand partnerships

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The Bahamas Investor Magazine
July 1, 2013
July 1, 2013
Steve Cotterill

Billionaire investor Warren Buffett has said that a strong brand is an enduring “moat” that protects excellent returns on invested capital. When the invested capital is in the region of $3.5 billion, as is the case with the Baha Mar mega-resort currently being constructed on Cable Beach in The Bahamas, then that “moat” better be deep and it better be wide.

Baha Mar is a project of immense scale and vision. The list of amenities is simply jaw-dropping: 20 acres of landscaped beach and water features, including more than 14 pools and an eco-water park; 200,000 sq ft convention and performing arts centre; four distinct hotels offering 2,200 rooms; 30 restaurants; an 18-hole, 72-par Jack Nicklaus Signature Golf Course; 100,000 sq ft Las Vegas-style casino, all set along 3,000 ft of continuous, pristine beachfront.

With a development of this size, the utmost care has to be taken in the planning of strategic partnerships and brand alliances. “Choosing our partners was a critical and considered process for us,” says Robert Sands (pictured), Baha Mar’s senior vice president of administration and external relations. “Our brand partners had to meet the objectives of Baha Mar, while providing the best possible experience across the entire development.”

Market leaders
In choosing the hotel brands with which Baha Mar wanted to align, the resort looked first at the market segments it wished to target and then pursued the best-in-class operators in each niche, says Sands. “Rather than having an array of sub-brands under one brand, we wanted to bring together significant leaders in the various markets to create a one-of-a-kind, luxury travel destination under the Baha Mar umbrella.”

At the high end, Baha Mar has drawn up a management contract with internationally known leader in the sophisticated luxury resort market, Rosewood, to run a 200-room hotel. This will include 87 private residences and villas and features the Rosewood hallmark luxury amenity–the Sense Spa. “Rosewood brings to the table the whole luxury end of the market,”
says Sands. “To put it in a local context, it is Baha Mar’s One&Only Ocean Club.”

Targeting the up-and-coming, jet-set crowd is the Mondrian. “This is our lifestyle brand,” continues Sands. “It offers a taste for glamour and excitement with cutting-edge style, creativity, culture and fashion.”

Attracting the more traditional clientele, Hyatt Hotels and Resorts will operate and manage the 700-room Grand Hyatt at the Baha Mar convention hotel, which will include 85 private residences.

“What is significant about all these brands is that they represent the best in class within their particular niche markets,” says Sands. “Having this model enables us to have a wide access to these diverse market segments.”

In May, Baha Mar announced that Global Gaming Asset Management (GGAM) would run the Baha Mar Casino and Hotel. Leading the executive team is former Las Vegas Sands Corp president Bill Weidner. Construction is well under way on the 100,000 sq ft casino, 1,000 luxury rooms and 23 exclusive private residences that it will house. VIP guests will also have access to the Ultra Villa high-end residence featuring interior design by Kravitz Design, a local company founded by American-Bahamian musician, designer and part-time Bahamas resident Lenny Kravitz.

Far-reaching benefits
Each partner within the Baha Mar resort will operate under a separate management contract, with the expertise being supplied by the brand itself. This will govern how each of the brands operates as part of the strategic direction of Baha Mar. The hotels will generate fees accordingly, operating as stand alone entities that are held accountable for their own revenue streams and return on investment.

However, the partnerships afford symbiotic activities in a whole raft of areas across the business. For example, during peak periods, such as Christmas, the hotels can spread marketing and booking operations across the separate brands, providing equitable accommodations and services throughout the resort to a particular market segment.

Collaboration also adds significant clout to marketing efforts. The combined resources of these hospitality heavyweights bolsters Baha Mar’s global brand presence in a way that would be very hard to achieve as a market newcomer. “With a collaborative approach to the marketing, we can leverage the particular benefits of these hotels to ensure that the Baha Mar brand and hotels within it are run at the types of occupancy levels that we are anticipating,” says Sands. “We will also be able to utilize their extensive databases of loyal clientele, as well as being able to tap into their significant marketing resources.”

Sands notes that the resort will take a three-pronged approach to marketing, drawing on its own dedicated budget, those of the individual hotel brands, and cooperative marketing with the destination, involving the government and the Ministry of Tourism. Although marketing budgets had not been determined at press time, “when you add up the collective dollars available, it will be significant,” Sands adds.

International appeal
The partnerships will not only add gravitas to the Baha Mar project in markets already familiar to The Bahamas’ hospitality industry, but also open the door to new ones. Hyatt, for example, is a well-known and respected brand in Asia, particularly in China, while Rosewood has a firm foothold in markets in the Middle East and Russia.

“We would like to reduce our dependency on North American and Canadian markets and spread our wings in Asia, Latin America and Europe,” explains Sands. “The US will still have critical mass for generating business for us, but because of our offerings, we will be able to attract a more diverse market share and tap into new emerging markets, giving us a bigger draw internationally.”

Global marketing will come to nought, however, if you cannot get customers to the destination easily, efficiently and with the bare minimum of red tape. To this end, Baha Mar is directly engaging airlines that already fly to The Bahamas to increase airlift, as well as targeting other airlines to initiate new routes to New Providence. By opening dialogue with these carriers and their allied partners, Baha Mar hopes to increase seating capacity on flights to the island by 400,000- 500,000 by the time the resort opens December 2014.

As for ease of travel, the high-end customers that Baha Mar is hoping to attract demand a certain level of efficiency, even when it comes to visa requirements and border control. “To be more international and have the ease of travel demanded by our customers, we have to work with government and the Ministry of Foreign Affairs on the easing of visa requirements and conditions that make it easier for people who hold visas for certain countries, such as the US, UK and Canada, to be able to land in Nassau and get clearance here,” says Sands. “We have seen movement on the visa issue in terms of our lobby effort, and we are hopeful that before our first guest arrives a lot of these processes will be in place and tried, tested and working efficiently.”

Local partnerships
The resort is also working with local partners and government departments to ensure that the wider island experience has the infrastructure to support the quality demanded by Baha Mar guests. “We have to ensure that experiences on island are up to the standard required,” says Sands. “The arrival and departure procedures at the airport, for example, have to be efficient and the transport from the airport to the hotel seamless. We are working with all parties involved in the whole process of bringing in international visitors.”

Baha Mar may be looking to bring the world to The Bahamas, but, continues Sands, it is also looking to bring The Bahamas to the world. “The whole ethos of Baha Mar is infused with the beauty of The Bahamas and the idea of being Bahamian,” he says. One way of expressing that natural and cultural beauty is through art. Local partnerships with the National Art Gallery of The Bahamas, the D’Aguilar Art Foundation and Dawn Davies Collection ensures that the brand hotels will retain a Bahamian cultural flavour, with selected and loaned art work displayed throughout the resort, as well as in the dedicated gallery in the convention centre.

Ultimately, the choice of partners at all levels will determine the success of the complete Baha Mar experience and as Sands concludes: “Everybody wins if Baha Mar is a success. It benefits our global partners; it benefits The Bahamas; and it benefits the people of The Bahamas.”

Buying into Baha Mar
Within the offering of the Baha Mar resort complex is an assortment of residences ranging from luxury condos priced from $1.5 million, to beachfront five-bedroom villas in excess of $15 million. For savvy investors looking to diversify their portfolio, now is a good time to invest in Bahamian property, according to Beth Dean-Pope, regional director, Residential Sales UK, Europe, Middle East and Russia at Baha Mar. “Since the recession people are seeing more benefits to having property as a part of their asset portfolio.”

The advantages of owning a slice of Baha Mar for investors are numerous, she adds. As well as being in a politically stable jurisdiction, investors can benefit from gaining permanent residency in a low-tax environment, whilst being exempt from sales and capital gains tax.

There is also massive potential for uplift in the investment, adds Dean-Pope, who estimates that The Bahamas is 10 years behind other parts of the region in terms of property prices, with markets in such places as Bermuda and Cayman Islands peaking in recent years. “Investors who made money in those markets over the last ten years are now looking to The Bahamas.”

As part of a global marketing strategy, Baha Mar pitched property investments outside of the North American market first, with 40 per cent of sales at press time coming from Chinese investors, 40 per cent from the Middle East and 20 per cent from Europe and Eastern Europe.

“The Chinese really understand investment and, because they have cut their teeth in the property market in places such as London, they are becoming less risk adverse and looking further afield,” says Dean-Pope.

“They may never actually go to The Bahamas, but what they recognize is the investment potential of owning property there.”

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