Politics and Union deals holding up Grand Lucayan HOA negotiations

The Compass - Politics and Union deals holding up Grand Lucayan HOA negotiations
The Compass - Politics and Union deals holding up Grand Lucayan HOA negotiations

E.J. Rolle


According to a source who happens to be on
the inside of the negotiations between the Government of The Bahamas, Royal
Caribbean Cruise Lines and the ITM Group, for the purchase and renovation of
the Grand Lucayan Resort, if members of the Government would put politics
aside, the Heads of Agreement could be reached, signed and announced.

The source, who spoke to The Compass newspaper on condition of anonymity because of his connection to the negotiations, noted that representatives negotiating for the Government are “too busy playing the politics game”, which has forced the negotiations to take longer than had been expected.

“When you have a number of business people, particularly those from companies like Royal Caribbean who sit down to negotiate, they mean business, but when you throw a bunch of politicians in the mix, the whole business side of the meeting gets thrown out of the window,” said the source.

“It has been very frustrating…I’ve seen it
on their faces…it’s been frustrating for the owners of Royal Caribbean and the
ITM Group and even for the lawyers involved in the project. The businessmen and
the lawyers could come to an agreement about certain aspects of the deal, but
if it does not line up with the politician’s political agenda, then the
agreement has to be re-worked or scratched. That has been a big problem in
these negotiations.”

The source said that he stands with the
Government when it comes to trying to get the best deal that would benefit The
Bahamas and Bahamians. He said when it comes to big companies like Royal
Caribbean, they would try to get as much as they can, for as little as they can
get away with, so it’s incumbent upon the government to stand its ground and
ensure that the country benefits from whatever agreement is made.

However, at the same time, the source added
that apart from ensuring benefit for the country, during the negotiations, members
of the government tend to look at things too much from a political point of

“In other words, if there is something that
will not get them the kind of political points that they think it should, they
fight against it or ask that it be revamped.”

Since announcing last year that a buyer for
the Grand Lucayan had been located, there has been the signing of a Letter Of Intent
(LOI) by Royal Caribbean Cruise Lines and the ITM Group, which took place on
March 27, 2019.

Once the LOI had been signed and publicly
announced, work on putting together a Heads of Agreement (HOA) was said to have
begun immediately. That was three months ago.

In the meantime members of the public were beginning to feel that because the HOA was taking so long to be announced, perhaps Royal Caribbean Cruise Lines and the ITM Group had changed their minds about moving forward with the purchase and renovation of the Grand Lucayan Resort and the redevelopment of Freeport Harbor.

On the contrary, is what our sources are indicating. In fact, according to our source, Royal Caribbean is “extremely excited” about the project. They are eager to move ahead, but the HOA has been stalled, apparently because of negotiations that also battle with politics.

There is another problem that is said to be
putting a strain on the negotiations; the Unions have already thrown down the
gauntlet for Royal Caribbean in terms of how Bahamian workers should be treated
at the Resort.

“You sit there and you listen to these
people from the Union run on about what Bahamian workers will not accept and
how they will refuse to work an hour over time without being paid,” said the
inside source.

“I hear what they’re saying, but the reality is Royal Caribbean already has a standard for their employees and they operate at a certain salary structure for their thousands of employees around the world. But apparently, the Unions has indicted that RCCL standards will not apply to workers in The Bahamas.

“That has been a big bone of contention for RCCL because, like I said, they have a certain range of what they pay their employees around the world. So that’s really one of the things holding up these negotiations; trying to come to some kind of agreement on salary scales for employees.

“It’s not that Royal is not willing to negotiate with the unions to give the employees what is just, they are concerned about the reputation that Bahamian employees have around the world, and that is wanting high pay for providing less service. That’s the reputation of Bahamian workers out there globally. I’ve heard it myself" said the source.

“But in spite of this, union reps are
pushing for a certain level of pay for Bahamian employees.”

The recent rift between the Hotel
Managerial Association and the Government over payouts for managers at the
Lucayan Resort is evidence that Bahamians don’t believe in getting the short
end of the stick when it comes to payment.

So, RCCL and the ITM Group will have their
hands full in trying to negotiate with the Labor Unions. That means, there will
be a battle when it comes to the hiring of employees at the Lucayan when it
reopens. This will definitely not be the last battle about salaries and the
rights of workers for RCCL and the ITM Group, as far as this project is

Meanwhile, the battle at the negotiating table
is holding up the move forward of the official purchase and renovation of the
Grand Lucayan Resort.

In a recent press release, even Prime
Minister, Dr. Hubert Minnis said that he was surprised that they had not yet
reached a Heads of Agreement with Royal Caribbean Cruise Lines and the ITM
Group for the project in Grand Bahama.

But even in the midst of what appears to be
a delay in the signing of the Heads of Agreement, Grand Bahamians can rest
assured that this project will indeed take place. And not just because there
was the signing of an LOI.

In the past investors have walked away from
projects even after an LOI had been signed. So, there is still always the
possibility that an investor could change his/her mind about a project, even
after expressing serious interest.

But our inside source reiterated the fact
that RCCL and the ITM Group are extremely excited about the project and ready
to get started.

Also, when you have the President and Chief
Executive Officer making pronouncements about the project to members of the
media outside of Grand Bahama, then there is a good chance that they are
serious about the project.

During a docking of the Symphony of the
Seas at Coco Cay, Prime Minister Minnis, Tourism Minister Dionisio D’Aguliar,
along with other Government officials had been invited to Coco Cay to get a
glimpse of what they can expect to be built in Freeport.

While the Prime Minister was a bit reserved
about talking to the media about the project in Freeport, President and CEO of
Royal Caribbean, Michael Bayley spoke freely to the media.

“We are hoping to bring the same kind of
creativity, intelligence and focus on the guests so that we can create an
experience in Freeport that is second to none and people will go there and say
‘wow, I gotta go back’ and I think that’s really what Royal Caribbean is pretty
good at,” said Michael Bayley.

“We’re good at delivering great vacations
and making sure guests have a great day and I think we will apply all that
design, understanding and knowledge to create an experience in Freeport that
makes people excited about going to that place.”

This is not from the President of a company
that’s not interested in carrying out a major investment in Freeport.

But it’s a matter of when Grand Bahamians
will begin to see work taking place at the Grand Lucayan and at Freeport
Harbor. There is no doubt that skepticism will continue to be the order of the
day, as long as there is no physical evidence of anything happening.

At that same meeting on Coco Cay, Prime
Minister Minnis was asked about the negotiations between the Government, RCL
and the ITM Group and a proposed timeline on when work would begin. But the
Prime Minister steered clear of giving any specific time line.

“They’re still in the negotiation stage,”
was all Minnis would tell the media.

But it was Bayley who was not shy about
putting some time line on the negotiations. “We’re still in the process of
negotiating, and it will be another 30 days or so because there is so much
stuff to go over,” he told the media.

That visit to Coco Cay took place on May 26
this year. So, one may be quick to do the calculations and conclude that sometime
around the end of June was when Grand Bahamians should have seen things happen
in terms of activity at the Resort. But the truth is, it’s a wait and see game.

It would be foolish to try and tie the
negotiations down to a specific date because of the issues that are apparently
taking place at the negotiating table.

However, according to The Compass news source, Royal Caribbean Cruise Lines and the ITM Group is said to have big plans for Grand Bahama. At the same time, the Government of The Bahamas is looking for the project to give them the kind of political leverage they are hoping for, as time winds down towards election 2022.

Once both parties can get past the glitch
in the negotiations, it will be a win-win situation for everyone, including the
Grand Bahamians.