Go Lean…Caribbean

Go Lean Commentary

Change has come to tropical resorts – hotels with casinos. They do not seem to work anymore. It is a failing business model. This is Bad News for some communities.

Casinos are especially failing. Why so?  Well, for the many resort guests that come from North America (US & Canada), they now have abundant access to gambling – lotteries, casinos and pari-mutuel betting (horse racing, greyhound racing and Jai Alai). These establishments, especially casinos as of late, have popped up in many cities all over the region, plus on many Native American reservations. Plus there is the eco-system of Casino Riverboats and Cruise Ships leaving major US ports; many of them heading to the Caribbean.

Lastly, the ubiquity of the internet has furnished endless online gambling options.

The previous casino hot spots of Las Vegas and Atlantic City have thusly had to reform and transform their product offering.

Somehow, the Caribbean region “has not gotten the memo”.

This is sad, as one community after another in the Caribbean are having to endure the “bumps and bruises” of a failing economic engine in their neighborhood.

“It’s a beautiful day in the neighborhood …” NOT!

See this reality – Bad News for one city – in this Press Release statement here:

Corporate Statement: Sunwing vacates Memories Grand Bahama 

February 1, 2017 – In 2013, the Sunwing Travel Group forged a partnership with the Government of The Bahamas and in 2014 began to operate the Memories Grand Bahama Beach & Casino Resort on Grand Bahama Island. Concurrently with Sunwing’s opening of the Memories Resort, Sunwing began weekly flight service from eight cities in Canada and daily flights from a variety of U.S. cities in the ensuing summer. The opening of the 492-room Resort coupled with Sunwing’s tour operator and airlift support, led to the revitalization of the Grand Bahama tourist economy, over 100,000 incremental tourists annually arriving on new flying programs from Canada and the Eastern United States, the creation of over 1500 jobs on the Island, and an annual economic contribution exceeding US $140 Million.

On October 6th of 2016, Hurricane Matthew caused significant damage to the Memories Resort and forced its closure. Despite an immediate response from Sunwing Travel Group and the Government of The Bahamas to secure alternative accommodations, protect flying, and expedite the necessary repairs, the Hotel’s owner, Hong Kong-based Hutchison Whampoa, did not agree to requests to restore the Memories.

Since this event, the Sunwing Travel Group has taken on the significant financial burden of compensating and re-protecting customers as well as running an air program with limited accommodation options as a demonstration of goodwill and commitment to the people of Grand Bahama Island.

In January, it was reported in the Bahamian press that the Government and Sunwing had agreed to co-invest sums to restore the Memories and secure its earliest reopening. Sunwing sought the hotel Owner’s consent for such restoration but regrettably, the Owner attempted to impose exorbitant conditions that were totally unacceptable to Sunwing and would be to any other potential tenant.

The Sunwing Travel Group is very proud of the partnership it has forged with the Government and the people of Grand Bahama and very saddened to report that we were required to vacate the Memories Resort premises on January 29, 2017. Accordingly, we are making arrangements to pay out applicable redundancy pay for our employees and will be reaching out to our employees in the coming days.

Sunwing intends to continue supporting Grand Bahama Island and its tourism economy, including its hotels, through its tour operators, Sunwing Vacations and US-based Vacation Express as well as by continuing its airlift programs from Canada and from the United States in the summer, subject to conditions we are discussing with Government.

We are also pleased to advise that as part of our ongoing commitment to Grand Bahama and its people, we are already developing plans in concert with the Government to return to Grand Bahama Island as a hotel operator and are optimistic that we will be in a position to announce details shortly.

We are very appreciative for the support we’ve received from the Government and the wonderful people of Grand Bahama. Thank you for your continued support and understanding,

Sunwing Travel Group.

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Source: The “Bahamas Weekly” News Source; posted Feb 3, 2017; retrieved Feb 8, 2017 from: http://www.thebahamasweekly.com/publish/grand-bahama-bahamas/Sunwing_vacates_Memories_Grand_Bahama52338.shtml

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VIDEO – Memories Grand Bahama Beach & Casino Resort – Grand Bahama, The Bahamas | Sunwing.ca – https://youtu.be/qLo3puqnIis

The foregoing press release – about Freeport, the 2nd city in the Bahamas – aligns with the book Go Lean…Caribbean, which calls for the elevation of Caribbean economics. This quest means first accepting the reality of the current assessments; then forging the necessary change.

What is the assessment? The region is in crisis!

Alas, the Go Lean book declares “a crisis is a terrible thing to waste”. It serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) with the charter to effectuate change in the region with these 3 prime directives:

• Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
• Establishment of a security apparatus to protect the resultant economic engines and marshal against economic crimes.
• Improve Caribbean governance to support these engines.

Looking at the foregoing news story, Freeport has a crisis. There is a need to re-focus, re-boot, and optimize the engines of commerce so as to make Freeport, Grand Bahama, the whole Bahamas and the entire Caribbean, better places to live, work and play. This news story relates that the tourism product in Freeport, the mainstay of Caribbean economy, is in turmoil. The Go Lean book asserts that this is where the region must start in the effort for turn-around: the region can no longer afford to be a “one-trick pony”. The opening page of the book states:

The Caribbean has tried, strenuously, over the decades, to diversify their economy away from the mono-industrial trappings of tourism, and yet tourism is still the primary driver of the economy. Prudence dictates that the Caribbean nations expand and optimize their tourism products, but also look for other opportunities for economic expansion. The requisite investment of the resources (time, talent, treasuries) for this goal may be too big for any one Caribbean member-state. Rather, shifting the responsibility to a region-wide, professionally-managed, deputized technocracy will result in greater production and greater accountability. This deputized agency is the … CU.

The CU Trade Federation is a technocracy, empowered to reboot the economic engines of the member-states, by fostering new industries (new “purse”) across the entire region and deploying solutions to better exploit the opportunities of the global trade market. Thus generating all new revenues; with no need to re-distribute any existing “purse” among the member-states. …

There is an apropos proverb: “if you fail to plan, you plan to fail”. Starting here and now, the Caribbean starts its planning for success; to snatch “victory out of the jaws of defeat”. Failure is just too familiar. Already we have member-states … on the verge of a Failed-State status… These states are not contending with the challenges of modern life: changing weather patterns, ever-pervasive technology, and the “flat world” of globalization. To reverse the fortunes of these failing states, and guide others in the opposite direction to a destination of prosperity, the Caribbean must re-boot the regional economy and systems of commerce.

Early in this book, the responsibility to monitor, manage, and mitigate the risks and threats of job killing developments, (such as the reporting in the foregoing press release), was identified as an important function for the CU with this pronouncement in the Declaration of Interdependence (Pages 13):

xxvi.  Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries… In addition, the Federation must invigorate the enterprises related to existing industries like tourism… – impacting the region with more jobs.

So what is next for Freeport?

The urging to this community is to “be afraid; be very afraid of maintaining the status quo”. It is past time to reboot Freeport. (See the foregoing VIDEO advertising the Memories Grand Bahama Resort).

This commentary previously related details of the status quo for Freeport and the strong recommendations to forge change. Consider this list of previous blogs:

The problems in Freeport are indicative of many other failing Caribbean communities, especially those overly dependent on tourism. Tourism can be a great economic engine, if managed properly … and diversified to hedge risk.

But, the executions have been faulty. Many communities have been plagued with “economic sores” for inadequate management of their tourism products. The issue of declining growth or failing business models is an important discussion for this roadmap. This commentary previously related details of these dysfunctions in these earlier Go Lean blogs:

According to the foregoing press release, the closing of this one property, Memories Grand Bahama, will directly impact over 600 jobs. In economics, there is the study of in-direct jobs that are facilitated by an economic engine. The Go Lean book details (Page 260) the principle of job multipliers, how certain industries are better than others for generating multiple indirect jobs down the line for each direct job on a company’s payroll. (Tourism’s job multiplier may be in the 2.0 to 3.0 range, while other industries, like automotive manufacturing, have a job-multiplier rate of 11.0)

The closing of this one property is more dire for Freeport; it’s an island with only few other non-tourism economic options. This city should be desperate to reform/reboot. Their economy needs to diversify … to industries with high job-multiplier ratios. (The Go Lean book suggest an automotive manufacturing business model for some communities in the Caribbean region; and a shipbuilding focus for Freeport). In order to “dream such a dream”, there must first be the adoption of specific community ethos to diversify the economy. (This is defined as the underlying spirit-attitude-sentiment that informs the beliefs, customs, or practices of society).

Is Freeport ready to start the journey for a new destiny with the adoption of the new community ethos? How about the rest of the Caribbean?

The book details the community ethos, plus the strategies, tactics, implementations and advocacies to foster a diversified economy:

The Go Lean/CU roadmap is designed to foster industrial developments to diversify communities from tourism. We do not want to “abandon” tourism, just diversify it.

“Abandon” is a good word, because abandonment is what is happening in these failing Caribbean communities that have not diversified nor grown their economies. The disposition is so bad that the region sports a 70 percent abandonment rate among the educated classes.

This is truly a crisis; but one not to be wasted. All Caribbean stakeholders in the region – residents, institutions, businesses, Diaspora and trading partners – are urged to lean-in to this Go Lean roadmap. This plan is conceivable, believable and achievable.

Yes, we can … make the Caribbean a better place to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!