|The Bahamas Investor Magazine
January 1, 2017
January 1, 2017
At first glance, the casual visitor to Harbour Island may take this sleepy island community as nothing more than an idyllic backwater. But stroll the quiet, leafy streets and you might run into Bill Gates, Mick Jagger or Lenny Kravitz–frequent visitors who, like most of the island’s high-end holidaymakers, are drawn to its picture-perfect colonial architecture, laid-back lifestyle and natural beauty.
With a strong second-home market, a slew of wealthy visitors and continuous tourism growth, the island is proving to be one of the strongest economies in the archipelago, and an overhaul of the existing resorts, along with the expansion of a residential development, look to further spur that growth.
Harbour Island’s tourism industry first took off in the 1920s, boosted by groups of day trippers from Nassau, and picked up pace after the Second World War when the island became more modernized. Since then it has grown steadily as word of the destination’s charms spread. Harbour Island was named Best Island in the Caribbean region by Travel & Leisure magazine in 2015 and it is also featured in its Best Beaches on Earth list in 2013. Today, the island welcomes around 10,000 tourists a year, quite a jump from the 151 visitors recorded in 1924, and there are 14 hotels and around 300 private rental properties.
The Bahamas Ministry of Tourism’s Harbour Island representative June Dean says that 2015-16 has been a banner year for the island, and predicts that tourism will continue to grow. “Harbour Island is very popular. We have had a tremendous season. It has been extremely busy,” she says.
Tom Sherman, co-owner of one of the island’s most popular resorts, Coral Sands, believes Harbour Island draws visitors for many reasons. “It is a unique island. You have one of the best beaches in the world; the quaint and beautiful architecture gives it character and the people are a major asset. They are very tourist-friendly and warm,” he says. “Getting around by golf cart [the main form of transport on the island] is a unique experience. We also have good options for fine dining, as good as anywhere else in The Bahamas.”
Perched on a gentle slope overlooking the famous three-mile-long Pink Sand Beach on the eastern side of the island, Coral Sands is a boutique operation with just 38 rooms. At press time, the resort was in the middle of a $2.5-million refresh, which involved tearing down one of the property’s buildings to create three new cottages and two triplex units. The work will also include a refit of the resort bar and a new infinity pool. According to Sherman, the renovations were due to be completed by the end of 2016. “We just decided we wanted to modernize and get better quality rooms. We have a jewel of a property, but you have to be a hands-on owner and continue to invest in it.”
Sherman, a Florida-based attorney, and his wife are majority owners of Coral Sands having bought the property in 2003. In 2014-15, the entire resort was given an overhaul, renovating the rooms, and adding a gym and a gift shop. As a result, Sherman says Coral Sands “had its best year ever” in 2015-16 and is on track for continued growth.
The resort attracts many repeat visitors and is a popular destination for weddings. Sherman says sometimes these groups overlap with couples getting married at Coral Sands, and then returning for their anniversaries. He believes part of the appeal of the Harbour Island tourism product is boutique operations such as his own, saying: “People are tired of the branded hotels and the same thing everywhere. The boutique hotel is a little more unique.”
Next door to Coral Sands, another resort is undergoing a facelift. The Pink Sands Resort, which opened its doors in 1951, announced its first real estate offering in summer 2016. Following a $3-million refurbishment, the resort hopes to offer 25 luxury villas, some of which were built new and others remodelled from existing cottages. The one- and two-bedroom colonial-style villas range from $1.5 million to $4.8 million and can be signed up to the resort’s rental management programme. The new villas will be constructed as part of a three-phase development which also includes refurbishment of the kitchen, reception area, gift shop and restaurant.
General manager Thomas Parke expects the work to be completed by the end of 2017 and says interest in the real estate component is “strong.” He believes investing in Harbour Island’s tourism product is a solid choice given the buoyancy of the market, saying: “Harbour Island has a rich hospitality history with notable visitors who have made this destination a sought after location within The Bahamas. Tourism continues to increase with many businesses and residents making improvements and adding services.”
Jay DiGiulio, sales and marketing director at Boutique Real Estate Advisors, which is helping Pink Sands bring the properties to market, agrees: “Annual tourism to Harbour Island continues to increase month over month. Several businesses have made significant improvements to increase real estate value across the entire island and Pink Sands is equally adding value to its operation. Pink Sands is seen as the heart of Harbour Island and interest in our development contributed to the investments made this year and the continued investment for 2017.”
Outside of New Providence, Harbour Island has the highest concentration of second-home ownership in The Bahamas. Land is in high demand and short supply, says Mark Moyle, realtor at local firm H G Christie Ltd. Moyle, who is also the owner of M&M Management, a construction management business, has lived and worked in Harbour Island for many years and says the island’s housing market has been trending upwards for decades, sheltered from the boom and bust cycle of real estate elsewhere. “Harbour Island is definitely a little bright spot. It is definitely booming. I have been going there for about 20 years for work and it has tripled in popularity [in that time].”
And with the average real estate transaction worth a minimum of $1 million, only the wealthiest buyers need apply. According to Moyle, prices are equivalent to those in Nassau, but higher than other Family Islands with beachfront property between $1 million and $2 million and coveted spots along Pink Sand Beach anywhere from $3 million to $5 million. While some buy to live in year-round, most are treated as part-time vacation homes and rented in the off season. “Most people will rent part of the year. Owning and maintaining a second home is expensive. Even some of the wealthiest people will rent it out if they’re not using it,” says Moyle.
This influx of wealthy seasonal residents has given rise to a diverse social scene on the island, which Moyle says has something for everyone.
“There is a local scene and a couple of different expat scenes. We have a very established group of residents who have been here a long time. There is quite a mingling of millionaires. And then you have the new, young crowd who are moving in right now. Europeans and North Americans who have been very successful. They come down a few times and decide they want something more permanent on the island. They want a real family home that they can go to and make some memories.”
But with Harbour Island’s popularity showing no signs of slowing, is it destined to lose its small town feel and laid back atmosphere? Moyle doesn’t think so, pointing out that the island has accommodated its expanding community very well so far. “The tallest hotel is still barely three stories. The place is still very charming.”
Sherman agrees: “It will never be anything like Nassau. It is not in danger of over-development. There are more large homes now, like everywhere else, so it will change a little bit, but I do not think it is going to change radically.”
For the Ministry of Tourism, the priority is not to change, but to maintain. Dean says the island has a firm grasp of its own identity and is keen to preserve its status as a high-end, but low-key, destination. “We are trying to increase activities on the island for visitors while they are here, but we are not trying to take away from what we are–quiet and quaint. People come for the slow place of life. They are looking for some place to get away from the hustle and bustle and relax,” says Dean.