Photo: Derek Carol- GBCC President Peter Turnquest
Freeport, Bahamas - The following are remarks made by President of the Grand Bahama Chamber of Commerce at the Grand Bahama Business Outlook on February 25th.
DEFINING VISION
An organizational vision is defined as a realistic, credible, attractive future for [an] organization. One of the purposes of a vision is to inspire people to achieve a level of excellence, and to provide purpose and direction. A vision which is not realistic or credible will accomplish neither of these objectives nor will it be achieved if it is kept a secret from the public.
So what is the vision for Grand Bahama? I am advised that such a vision is being finalized and I hope that it will be shared with us in due course, but I have to confess I am curious as to what it will contain and if it will reflect consultation with the indigenous stakeholders to ensure it relevance and credibility. Forming a vision for an island like ours is not an easy task considering the politics and other extenuating circumstances, but is a worthwhile endeavor to try to bring some focus to our attempts to attract investment which should be lined up with our educational requirements to ensure our citizens benefit.
For decades people visiting this island, tends to agree that Grand Bahama has been and is poised for great development, so why hasn’t it? I have my private views on that question but whatever reasons that exist, it is fair to say that we have lost significant opportunities over the years due to a lack of vision and narrow thinking.
So what is my vision for Grand Bahama? My vision for Grand Bahama is a mix of industrial and touristic developments, coexisting in a pristine environment taking advantage of the natural assets provided by nature and culture, particularly east and west of Freeport and those manufactured by industry in the port area by its forefathers. I strongly believe we have a number of competitive advantages that have to be exposed and promoted to create development for the benefit of our people. For instance:
Logistics
Logistical service is a natural for Grand Bahama given its geographical location, it major maritime infrastructure, aviation infrastructure and available land, all in a free trade zone.
Logistics is the management of the flow of goods , information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. It involves the integration of information, transportation , inventory , warehousing , material-handling, and packaging , and occasionally security and is a multimillion dollar industry requiring specialist resources.
If we were able to manage our cost structure, I see tremendous opportunity to establish warehousing and other logistical support services in an air-land-sea park. With a sophisticated logistical infrastructure, we have the opportunity to be a real player by offering large cargo operations the ability to offer just in time shipping, low cost bonded warehousing and efficient management of all of the logistical needs for industry. We can become a duty free wholesale shopping zone and a hub for goods going from east to west and on to north and south.
Maritime Industry
Recently Grand Bahama had the opportunity to play host to the International Maritime Organization which was a wonderful opportunity to expose our island, its air and sea infrastructure and the services available by maritime surveyors, insurers, marine pilots, ship chandlers and other services. There were a number of organizations represented at the trade show but I must say that I was a bit disappointed in the limited number of local firms represented and I would encourage our stakeholder not to miss these type opportunities to display their services. This is in line with my vision that whenever we have these major industries and potential partners available to us, we must do all we can to ensure that we push our local service providers forward so that we create the linkages and opportunities for them to be exposed to the industry and hopefully directly benefit from the various spin off opportunities that may arise.
As Freeport has become the leading maritime location within the Bahamas, I would like to encourage the Bahamas Maritime Office to consider relocating its offices to Grand Bahama to drive the creation of a center of excellence centered on the registry, maritime studies and industry support services. In doing this, we will not only shift the nexus of the industry closer to our most important building blocks but also begin to create the shift in population we need to Freeport. By moving this one office we may also encourage the relocation of other major maritime partners, both internally and externally, positioning Grand Bahama to begin to specialize by gearing some of its educational institutions directly towards meeting the demands of the industry through specialized targeted education. This would give our students focus and relevance to their studies, knowing that they will be prepared to meet job demand that will actually exist.
I listened with great interest at the opening of the Maritime conference to the minister’s remarks regarding the possibility of a Maritime Institute or College here in Grand Bahama which I believe is an excellent idea. Such an institution will help to consolidate our position in the industry and not only prepare our own students for this in demand field, but also has the potential to be a net foreign exchange earner, to create business opportunity through support services for the school and to propel us to being the center of excellence we can be. I encourage the Minister to continue his work in this area and I am sure that whatever obstacles that may exist can be overcome with partnership and the will to see it done.
Aviation
Turning to aviation, our airport has been very much underutilized for years and has been noted for its high cost of operations by carriers even while it continues to struggle to breakeven. We have heard of the pre-clearance facility to be established in Freeport to pre-clear private aircraft going into the USA which is an exciting development that we can certainly build upon. This development should not be the sum total of the investment that is necessary to make the airport attractive however. We have to attract investment there that will result in lower fuel cost and services for all operators and create linkages to other aviation services that can have a wide ranging affect on our economy. I am talking about aviation schools, cargo facilities and Approved Maintenance Organizations.
Aviation Training Schools
Thanks to the 911 terrorist attacks in the USA, flight training has become an extremely tedious and costly endeavor for international air carriers. Obtaining TSA approvals and other clearances to train in the USA is a timely proposition with no certainty of approval. What if we could attract a reputable flight school to Grand Bahama? A school that will not only offer ground training for private and commercial airline transport pilots, but wet and dry simulators capable of providing flight training for all of the world’s most popular airlines and aircraft types and maintenance training for the same. We can attract a potential market to Freeport from all over Central and South America and the Caribbean as well as from other countries that would prefer to avoid the hassles of dealing with the US system. We can do that!
Cargo
We have one of the largest container port facilities on the Eastern seaboard with cargo being received from all over the world. With this stellar asset, why haven’t we been successful in luring a major air cargo operation to Grand Bahama? We have the airport, the land and the ideal conditions with the sea port to make this happen and the huge advantage of being potentially the largest air cargo facility outside the USA but strategically placed close enough to North and South America to be economical, saving carriers tremendous clearance cost, particularly for those shipments not intended for the USA. You might be interested to know that there are currently no major air cargo hubs south of Miami (which is busting at the seams) in the entire Western Hemisphere a market potential we can fill easily. Maybe, we have to look at some of the smaller carriers but the same benefits created to lure the container port can certainly work at the airport if we create the right conditions and make the cost of doing business there more attractive and competitive. Again just think about the selling point we have of being close enough to the major markets in the western hemisphere without having to endure the scrutiny necessary to enter some of these markets through the USA. We can do it in a safe and cooperative manner and I believe, like the pre clearance facility, we have something to offer our friends that can be sold. For instance, what if we were able to convince the USA, that like the preclearance of passengers, they can also do preclearance of cargo here? This would fit nicely with our logistic business and we can provide value to the supply chain by allowing carriers the ability to clear crew and cargo here rather than lining-up in Miami to clear which can take hours. That could mean that, fruit and flowers from Colombia or Peru can get to market hours earlier and cheaper than they can do it now.
AMO
Why does Bradford Marine or the Grand Bahama Ship Yard work as offshore repair stations for boats? If you consider the savings accruing to owners who choose to have their marine repair work done offshore, the same thing applies to aircraft. Using that argument, we should be able to lure a major AMO to Grand Bahama to take advantage of our geographical position, our tax free zone and industrial incentives. I’m thinking of American Airlines, Eagle, Gulfstream’s, Deltas, etc, who have to do major checks on a specific time schedule and may very well be interested in utilizing such a facility to avoid the costly labor unions in the US as well as take advantage of our tax status. If we can get the cargo operations going, this would be a natural fit as carriers can base their aircraft here. I know from my own experience in the airline industry how costly these services can be so we would love to have a certified AMO. I can see the day when we have major aviation shops right here in Freeport servicing the local aviation industry as well as those from all over the world and most particularly, those from the Caribbean and the Florida area.
Bridges
Some years ago, I believe it was Sir Jack Hayward that coined the name the Grabaco Bridge to link eastern Grand Bahama to Abaco. The intent of this bridge was to allow for ease of commerce between the two islands by expanding both markets. Abaco can benefit from the container port and proposed air cargo facility and Freeport can benefit from Abaco’s agriculture and other products. In addition, the bridge would facilitate a unique two for one vacation experience as both international and domestic tourist would be able to easily visit both locations while helping to pay for the bridge through tolls. Maybe this is an idea whose time has come and hopefully, if we can find an investor, we will be able to convince our neighbors that this will not take anything from them but can only add to their economy because what they have cannot be duplicated here and vice versa. We have to start thinking strategically and outside the box.
Tourism
It is the general feeling that following the hurricanes of 2004, the tourism industry in Grand Bahama virtually came to a standstill resulting in the loss of three hotels last year. Of course I don’t know the details, but I feel that at least one of these hotels should have been able to survive and even pick up significant occupancy from the vast middle income market, being that it had the opportunity to provide a low to medium room rate option for tourist who would not mind not being directly on the beach front in favor of a budget room. Again, I don’t know what the management deal was with this particular group and the property owners but it seems to me that reasonable people ought to have been able to work out an arrangement that would have seen some heads in beds rather than a boarded up property in our main tourist district.
Overall, I believe that rather than suffering from a surplus of rooms in Grand Bahama, we are actually suffering from a deficit of rooms, particularly the type rooms that will attract the budget conscious tourist who is suffering the effects of the global recession or is insecure about his job situation. These potential tourists may not be willing to take the $5,000 vacation but will take a $1 - $2,000 vacation.
Ladies and gentlemen, we have to somehow get our industry partners to appreciate that our tourism business is not what it was in its hay day when tourist had a lot of disposable income and little competition. We are today faced with a much more educated and informed customer with easier access to deals and promotions that were not available or widely known in the past. We are faced with a customer who as the Minster is fond of saying, “can fly cheaper to the DR or Cuba or Jamaica, than to fly 100 miles to Freeport”. We are faced with competition that is 50 to 75% cheaper all around, that’s rooms and food, than we are. We have a consumer that now knows that 50 – 60% of the souvenirs they buy are from Asia and the experiences they are exposed to are manufactured. But yet we want to continue to package our product and sell it as if there has been no change in the paradigm. Well, that’s one way to go, build it and they will come! But I don’t have much faith in that as it relates to the future of our number 1 industry.
Instead, I believe that we need a totally new vision of what tourism is to mean for a developing country with a mature product. We need to go back, to evaluate our mistakes and create a new plan to avoid the same, as we develop new areas of this industry. In my vision, I see hotels returning to a totally indigenous offering with a sprinkling of European and American influences rather than the reverse. This is a radical step but if you think about it, what is it that we are selling that sets us apart from every other destination, including the US and the rest of the Caribbean? I mean, if I wanted to have a gambling vacation with access to a pool and nice restaurants, why would I take that expensive flight, endure the lunacy of the TSA screenings and the lineup of cattle at the airport, when I could get the same experience in Las Vegas, Biloxi or the Indians right in Florida, where I have the beach, the best restaurants, the best service, conveniences, etc? If I wanted that foreign feel, why would I not take the cheaper experience, perhaps experience a foreign language, enjoy native culture and service, which although slow, is grateful for my business and makes me feel wanted? Ladies and gents, we have to appreciate the times we are in and determine what we want to be. We cannot be American or Canadian, we cannot be Mexican or Dominican or European or even Chinese. We have to be Bahamians and this is where our strength is and the thing we really have to offer the world because, while other may attempt to copy it, they cannot duplicate it. In my vision for this industry, in order for us to reinvent ourselves and offer the world a real and only in the Bahamas experience, we must offer a product that is authentically Bahamian, and who knows better how to do that?
I believe much of the unrest we see in the hotel industry today, aside from just plain bad management practices and greedy unionist and predatory lawyers, is due to the fact that we have for years been allowing foreign hoteliers to come into the Bahamas, to tell us how to be Bahamian. To tell us what our guest, whom we have had a relationship with from the 50s need, want and expect. What they have been giving us however is their version of what being Bahamian is and what they think, based upon their Eurocentric experience tells them, that our guest want. As a result, our industry professionals put on the appearance of happiness and genuine service for guest as they have been trained to do but have no real buy-in. The service they provide is not genuine, native or natural resulting in resentment, lack of self esteem as played out by anger, lack of enthusiasm, shoddy service and bad behavior in the most public way.
My vision for this industry is for us to go back to what we know, to emphasize our natural personalities and penchant for hospitality, warmth and open friendliness. In doing so, it is my belief that we will see a more genuine tourism product and a return to the charm we use to be known for in days gone by. Now I know that is a bit idealistic, but you asked me my vision. I believe going forward, that we also have to rethink our belief that bigger is better when it comes to hotel developments. I believe there is tremendous value in having a grouping of smaller boutique properties that allow for a more personal relationship with our guest. This type development will also allow Bahamians more of an opportunity to become stakeholders in the industry. Thus, I believe the government through its agencies and connections globally, ought to be identifying prime locations for resort development, identifying potential financing worldwide for our people who may qualify, (some with a little help from that government), identifying those leaders in the industry who may be capable and interested in taking ownership and connecting them and their resulting properties to markets and marketers to drive their success.
With smaller properties, we will also have more of an opportunity to control the foreign exchange outflows as outlined in an article in Tuesday’s Guardian where Mr. Robert Sands lamented the fact that we do not have more linkages to the agricultural and aquaculture resources of this country. I believe that smaller properties will allow the hotelier to have a direct connection to the farmer thereby ensuring communication with each other regarding seasons, availability, etc. Again, my vision for tourism is that we have to make it more reflective of time and place and that includes offering to a greater extent the produce and agricultural products available in the season they are available, supplemented by foreign products rather than the reverse as it is now. This approach calls for a tremendous change in the status quo and the direction we have been leading tourism in this country but since Grand Bahama does not have much of a tourism market anyway, maybe we have a real opportunity to test this approach.
Integral to this approach, is a shift to a more natural setting, architecture and the use of renewable energy as the main supply of electricity. As energy is one of the main cost components of hotel operations, it seems natural to me and we need to put urgent focus on this area.
Cruise Port
At last year’s Business Outlook, there was tremendous fanfare regarding a planned Cruise Terminal scheduled for the William’s Town area. Since then there were community consultations and talks of acquisition of private land to accommodate the project however, the talk has now gone silent and we have not heard much about the development and the time frame we should expect completion. Once again we are being left in the dark and businesses and potential entrepreneurs have little or no information available to be able to make plans to take advantage of this development, if it comes to fruition. I would like to urge the parties responsible to update the public on the status of this vitally important project as it has the potential to be a game changer for Grand Bahama’s cruise arrivals and the economic spin off that will result. I am aware of major resort amenities and shop owners who are banking on this additional traffic and we must not let them down.
Industry
Oil Storage
We have heard or will hear today of the major investment plans for Vopak which has been a major employer in Grand Bahama for years. We also heard recently of the significant cleanup and upgrading of the facility at east end by Statoil, which has likewise been a major contributor to the economy of that area. These facilities have also been major contributors and partners in the local economy through the use of contractor services and the provision of other community amenities. Their record of utilizing local service providers, where available, is commendable and they have been the catalyst for many entrepreneurships. It is my hope that they will continue to thrive and expand while continuing to ensure that they maintain best practices in their operations and in regards to the environment.
A natural spin off to this business is the reestablishment of a refinery, and I am still hopeful that one day we will be able to return to the glory days of oil refining in the Bahamas. With the discovery of quantities of oil in Cuba and potentially in the Bahamas, a refinery may become feasible again especially since the Cuban oil may not be able to enter the USA directly.
Likewise, it is my hope that we will see continued success of our other major industrial partners who have brought new life to some of our plants and new developments to others. As we continue to develop our industrial sector, we have to find ways now to increase the linkages to the domestic economy and try to attract complementary international business using these entities as examples of what can be done and reference points.
Energy
As we are all aware we have had any number of proposals regarding LNG plants in the Bahamas with no obvious signs of resolution to these proposals. I am very much appreciative of the need to balance development with the environmental impact but we must concede that there must be development if we are to progress. In this regard, I share the vision of others for a fully active LNG plant to be located on Grand Bahama, not Ocean Cay where no one lives, but Grand Bahama where we can create linkages and benefit from the industrial activity.
I am told that with an LNG fueled electrical plant, we will be able to reduce our electricity cost significantly and possibly below even that produced in Florida. If this can be achieved, this too will be a significant game changer for the island and open up a tremendous opportunity to realize our dream of light manufacturing and logistical support services. These are naturals and in my humble opinion do not need too much more analysis or thought. While we are fiddling, others are planning and we must get on with these projects before it’s too late, there is no choice.
We should also be working on attracting research and development opportunities in renewable energy. They are doing that to some extent in Eleuthera today on a small scale but we have the capacity to take it to a new level by experimenting with bio-diesel on a large scale as well as with solar technology.
All of these things I have mentioned today are a stretch I know, but I believe it is in dreaming big that we will hit on the right theme and will inspire our people to achieve. If we can be successful with just one of these ideas, we will be well on our way, but just to let you know that I have not taken complete leave of my senses, let me summarize my more realistic vision and what I think we can accomplish in the next year or two.
In the area of tourism, we must find a formula and a willing partner to invest in our tourism plant, a partner or partners who are visionary and have the resources to follow through. Despite all of the talk of heritage tourism and the like, we must face the reality that Grand Bahama does not really have much of a natural draw when it comes to cultural identity. It was planned that way from the outset and we cannot change that now. So since we have embarked on this road, let’s take it to the extreme and manufacture what is not here, that is, we need to create a reason to come to Grand Bahama that is not available anywhere else in the world. I don’t know what that central attraction will be but if you think of Atlantis or Disney World, what is the draw there? Maybe ours can be centered on golf or the water but we need to identify a visionary who can see beyond our concept of attraction, of sand, sun and sea, someone who will think way into the future and create that unique reason for being. We need the cruise port for the reasons I have already mentioned
We need to find a real investor for the Royal Oasis who will be willing to invest immediately in restoring this property. Alternative, what I would really like to see is for this property to be turned it into a new hospital complex with reception, restaurant, lounges, shops and other facilities on the ground floor, surgical suites and other facilities on intermediate floors, hospital rooms on the next few floors and residential facilities for long-term patients, medical tourist and families above that. The Country Club can be used for clinics, rehab facilities, labs, medical school classrooms, etc. This facility is centrally located and accessible from both east and west, once we get our road back, and is therefore ideally placed. This will result in immediate construction jobs and will cause a revitalization of this entire area.
Much has been made of the potential for a multimillion dollar medial tourism industry and our potential to exploit it with our advantage of location, infrastructure and natural resources. I understand that Turks and Caicos have already aggressively entered this market and have attracted a major Canadian industry partner who will shortly be recruiting over two hundred doctors and nurses to the newly constructed hospital to focus on this industry. Once again we are late to the party and full of talk while others are acting but I fully support and endorse this potential industry and I am very excited to see the GBPA attending trade shows to advance this idea as well as some of the supplemental and necessary services required to make it viable. If a patient is willing to travel to Bangkok, Costa Rica, Cuba or now Turks and Caicos for medical services, it seems to me we have just as much to offer and more. Let’s aggressively move into this direction and get a major deal signed, while ensuring that we have all the stakeholders involved in the planning and execution of our plan of attack to ensure buy in, support and hopefully equity participation by local doctors, vendors and other service providers.
We can approve the LNG project and immediately begin the process of constructing the plant for electrical generation for domestic use and export. We can also export the gas as was originally planned by the past proposals.
In order to facilitate a lot of these industries we may have to make concessions and permit a more liberal application of work permits but I believe we should not be afraid of this. I believe as long as these people are bringing new developments and industries to the island we should welcome them with open arm, facilitate them in whatever manner and figure out ways to benefit directly from their presence through provision of service and products they will need to facilitate their work. This is how we can build a stronger industrial and tourism base, increase our population with quality individuals and create a stronger, more diversified and stable economy that will be less susceptible to economic fluctuations and less likely to up and leave at every hiccup.
In closing, I hope that I have met the objective and definition of a good vision for Grand Bahama and I now invite you, the stakeholder to buy into it, change and amend it as necessary, but in the end, lets us create a vision that we can all share, articulate it and communicate it so that all will know where Grand Bahama is headed and how they can be a part of making Grand Bahama great again and returning Freeport to its days as the “Magic City”.
So what is my vision for Grand Bahama? “To be a center of excellence in logistics, maritime services, oil storage and refining with a sustainable tourism industry in a safe and pristine environment”.
