business@tribunemedia.net
WEDNESDAY, JUNE 24, 2020
$3.72 Downtown Nassau sees 70% revenue fall in cruise close By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net CRUISE tourismdependent downtown Nassau businesses yesterday said they may close down until September with revenues down by up to 70 percent in a bid to survive until the industry’s return. George Mousis, Athena Café’s general manager, told Tribune Business of the cruise industry’s decision not to restart until September 15: “Well, it’s a big blow to us downtown for everybody - from the employers straight to to the employees. Most of out clientele in the downtown area are the cruise ship passengers, but unfortunately we are going to suffer the brunt of the blow. “Thank God we cater to the locals too; they keep us going, but let’s see for how long. We have a few curbsides and dine-ins along with the takeout. We will stay open for the time being. My jewellery store downstairs is closed, but if we open up who is going to come in to shop? “No one is buying jewellery right now. Even with the restaurant right now, the average person is going to the food store and spending the money and providing for their families. They spend money to have a meal stretched over a few days. Disposable income right now for the average person is not there, and we don’t know how long this will go on for,” Mr Mousis continued. “At least 70 percent of our sales are gone, so right now we can’t see any profits. But we have to keep it going and keep our employees engaged, and we’ll try to hold on.” Maybe this can be an opportunity for downtown and for us to adjust our model because we need some more locals downtown. For example, where are they to park if they want to come downtown? We need this to become more of a local hub, like back in the day. “They were supposed to revitalise downtown and improve it, but generally speaking we don’t see much action. I don’t see any movement, no forward movement, in terms of cleaning it up and making it more attractive to the common customer that are local or tourist alike. It’s not much to bring them downtown for. We have a few banks and we have a few restaurants, but generally speaking the first hurdle is where are people to park?,” he added. “Even last week for Father’s Day they were towing cars and, all of a sudden, no one was able to park. I know the spaces are for the taxis, but where are the taxis now? They are not around here, so why not let the locals utilise the spaces at least until things get back in action. But now a local is trying to patronise an establishment downtown and their car is getting towed, because I had a guest that was eating lunch and they had to get up and move their car.” Ryen Fox, general manager of Bonneville Bones’ downtown store, said: “There has been a huge impact thus far. Basically there is little to no traffic of customers downtown. We still have a few persons that actually work downtown that come in. “September does seem a long ways away, but at the same time I understand the necessity to protect us, because we don’t have the resources to take a full brunt of the coronavirus. So, it’s kind of a necessary evil but it is bittersweet.”
SEE PAGE 7
$3.73
$3.80
‘Expensive money’: $150m port bond set for refinance By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
N
ASSAU Cruise Port will move to refinance its recent $150m bond issue at the earliest possible opportunity, it was revealed yesterday, having elected to keep the offering’s $20m over-subscription. Michael Maura, the cruise terminal operator’s chief executive, told Tribune Business it will “definitely” seek to refinance at lower interest rates once the global capital markets stabilise post-COVID-19 in a bid to reduce debt servicing costs. The eight percent interest coupon investors will receive is more expensive than Nassau Cruise Port had initially hoped to pay, and Mr Maura confirmed that the bond’s terms enable the company to refinance the debt issue any time from May 2022
MICHAEL MAURA onwards - some two years after it has been placed. He also disclosed that Nassau Cruise Port had decided to retain the $20m raised over and above the bond’s initial $130m target, the issue having been oversubscribed by 15.4 percent at its closing.
A CABINET minister yesterday conceded all cruise tourism-dependent jobs have “simply evaporated for the time being” as he revealed that one major line suggested the industry might not relaunch until mid-November. Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that “no one in their wildest dreams could have forecast this total catastrophe” as he acknowledged the “devastating” impact of the cruise industry’s continued shutdown on downtown Nassau, Bay Street and all businesses and employees who relied on it for their livelihood. He disclosed that Arnold Donald, Carnival Corporation’s president and chief executive, had informed him last week prior to the industry’s announcement
SEE PAGE 4
SEE PAGE 7
SEE PAGE 5
• Minister: Industry’s shutdown ‘devastating’ • Carnival chief: End-November return ‘latest’ • Disagrees with port chief on Bay St ‘wandering’
DIONISIO D’AGUILAR that its re-opening has been pushed back to September 15 that the earliest it had hoped to return was in late August/the beginning of September. Mr D’Aguilar added that the Carnival chief said “early November” was the latest return being targeted by the industry, with the
likes of Royal Caribbean, Carnival and Norwegian Cruise Line now currently targeting the resumption of voyages in mid-September or early October. “They really don’t know,” the minister said, adding that the cruise industry was still working to meet the US Centres for Disease Control and Prevention’s (CDC) demands for stringent on-board COVID-19 countermeasures. “In his opinion,” Mr D’Aguilar said of Mr Donald, “the CDC is striving for a position that leads to the complete elimination of any chance of contracting COVID-19 on a cruise, and that was a position that requires a lot of study and analysis to get to that point.
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
“As you can imagine, the cruise industry thrives on very large crowds that are closely compacted together going to crowded destinations, and participating in a lot of events that bring many groups and crowds together in close contact whether boarding the vessel, disembarking or at events. “How best do you take what was the norm and try to reconstruct that into the new normal and a much lower density of persons? It takes a while to completely revamp your business model to accommodate this new normal. I understand their [the cruise lines] conundrum. It’s difficult.” Mr D’Aguilar said he had
grateful for the enthusiastic response to the offering, and the board made the decision to keep the $20m oversubscription.” Nassau Cruise Port’s total $284.3m financing needs, of which $204m is earmarked for Prince George Wharf’s reconstruction, originally called for a further $80m of debt funding to be secured in the 2021 first half. The remaining $74.3m is due to come from equity investments by its controlling shareholder, Global Ports Holding, and Bahamian investors who will buy into The Bahamas Investment Fund. Each is to have a 49 percent stake. Mr Maura yesterday said the equity raise, which aims to give around 20,000 small
Cruise tourism jobs ‘simply evaporated’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Atlantis defends contract worker re-hiring move A FORMER candidate for the hotel union’s presidency yesterday called for a government investigation as he blasted Atlantis for keeping himself and other full-time staff on furlough while re-engaging contract workers. Dave Beckford, a 25-year employee in the Paradise Island mega resort’s landscaping department, told Tribune Business it was “unacceptable” that he should remain at home while outside contractors and their employees were engaged to perform that type of work. Producing a photo purporting to show the contract employees at work, Mr Beckford slammed: “I have information contract workers are working. How can you have contract workers working and full-time workers like myself out there at home? “I’m a 25-year employee, and I don’t think I should still be out of work and contractors working. I call on the minister of labour [Dion Foulkes] and director of labour [John Pinder]. They need to save Bahamian workers, and not contract workers, especially at this time. They’re not looking into what is happening at these properties. “This situation was happening before COVID-19, but this is the time when we need to be working. This is not about expatriates and foreigners; this is about all of us as full-time workers. I’m at home and the contract workers are working. It makes me sick. It’s not acceptable, not acceptable. I need to work. I need to feed my family.” Atlantis, in a statement responding to Mr Beckford’s attack, said last night that while the resort retains third-party contractors to perform certain services they do not undertake duties or fill roles that are covered by full-time staff. Tribune Business understands that Atlantis believes the contractor the former hotel union presidency candidate is referring to falls into this category.
• ‘Definitely’ will seek lower rates come 2022 • Cruise terminal operator keeps $20m extra • Local investors to get dividends ‘immediately’ “Obviously this COVID crisis drove the cost of money up,” Mr Maura told this newspaper. “The eight percent yield was obviously very attractive to investors, but it is relatively speaking expensive money when you consider the cost of money six months ago. “So as confidence returns to the market and interest rates settle a bit, at that point we’ll be looking at that and will make the necessary decisions.” He also affirmed that Nassau Cruise Port’s future capital raising needs, which it plans to source in 2021, will be reduced by the $20m oversubscription to the recent bond offering. “The board met and it was agreed that we would keep it,” Mr Maura said of the extra funding. “We were
$3.74
$100m for ‘serious food security dent’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamas needs to invest “at least $100m” to boost food security and make “a serious 40 percent” dent in its import bill, an agriculture entrepreneur is arguing. Caron Shephard, president of the newly-formed Bahamas Agro Entrepreneurs Group, told Tribune Business in a recent interview that while the $9m allocated to food security in the 2020-2021 budget was “a big jump from where we were” much more investment is required to develop a sustainable agriculture sector in this nation. “Based on the numbers I have been looking at, to put a serious dent in the import bill we have, you’re looking at at least $100m to be able to comfortably make an indent,” she said. “That would be a 40 percent indent.” Taking Irish potatoes as an example, Ms Shephard said statistics from 20162017 showed that The Bahamas imported that
• Bahamas urged to target 40% import slash • Entrepreneur: $9m ‘big jump’, not enough • Warns: Don’t ignore hardened farmers year some 4,610 pounds of the vegetable for a collective worth of $8.867m. If Bahamian farmers were able to snatch a 40 percent market share, they would produce 1.844m pounds valued at $3.54m with those earnings remaining within The Bahamas. Suggesting that The Bahamas needed to make inroads into other vegetable crops such as lettuce, onions, cucumbers and celery, as well as livestock such as pigs, goats and poultry, she added: “If you go down the list of produce, you’re coming in within $100m to put a serious dent in that $800m import bill coming into this country. “Like the government said, they’re limited on resources. Nine million dollars is a big jump from where they were, and hopefully it will be injected into the farmers existing now and help where they need to
go. This is a sleeping giant not tapped into as yet, and the reason we’ve not tapped into it is because we’re so dependent on imports. It’s been easier to import rather than put people to work. “Because of COVID19, people are more aware of the importance of food security.... We have an opportunity to create a whole new industry with added value, with manufacturing, processing and packaging. Once we have that we can start exports. We definitely need some serious capital to get agriculture going.” The government, though, has barely increased the size of the Ministry of Agriculture and Marine Resources’ budget allocation, raising it from $26.068m to $26.252m, despite including a new $6m “line item” for “food security”. A further $3m has been added to this effort on the
capital side of the budget, but the subsidies provided to the Bahamas Agriculture and Marine Science Institute (BAMSI) and Bahamas Agricultural and Industrial Corporation (BAIC) have been cut by a combined $2.45m. The size of the $9m allocation has already come under fire, with Anthony Ferguson, CFAL’s principal, saying on a recent webinar that this shows it “can’t be serious” about improving The Bahamas’ food security. “You can always tell from a budget how serious governments really are, and they are not serious. It is very, very clear,” Mr Ferguson said. “Poultry imports are about $80m a year. Fresh fruits, etc, is a couple of hundred million, yet the increase in the budget for agriculture and fisheries was a little over $500,000. “They just can’t be serious. So until we are
prepared to get serious, I think we will continue to find ourselves putting our heads in the sand and finding that the economy is going to continue to grow slower, slower, slower with the increasing deficits.” Ms Shephard, meanwhile, urged the government to direct funding to experienced farmers who were already in business and knew what it took to succeed, voicing concern that Michael Pintard, minister of agriculture and marine resources, had suggested he wanted to direct monies to younger people. Acknowledging that the Bahamian agriculture industry is “barely surviving, but can thrive”, she added: “While $9m is projected, I would definitely live to see that properly distributed among the serious farmers in the industry. We have a number of persons who want to jump on board that are not tested and tried. They need to look at the tried and tested farmers in the industry. “Many come on board
SEE PAGE 7