Baha Mar: Doubling-down on Failure

Go Lean Commentary

“We told you it wouldn’t work.” – Previous Go Lean commentary.

Update: It hasn’t worked!

The Baha Mar Resort, Casino and Convention Center in Cable Beach, Nassau, Bahamas is now fully open – see Appendix VIDEO – and frankly empty! (See Photos below). This is the peak winter tourism season. This weather reality creates a seasonal demand for tropical resorts. Plus the excitement of a new property always generates a “buzz” … normally.

And yet, Baha Marthus far has been underwhelming! (There is hope for a better disposition in the future).

The Baha Mar project has been a source of contention for many years; one drama after another: dispute during construction, missed opening, bankruptcy filing, official wine-down, changed ownership, eventual opening, litigation among the originators.

See the latest breaking news in this Baha Mar drama in the news article here:


Title:
Bahamas Developer Claims Huge Chinese Fraud at $3.9 Billion Resort
By: Bob Van Voris

China Construction America Inc. was accused in a lawsuit of ripping off the original developer of the long-delayed $3.9 billion Baha Mar resort in the Bahamas by submitting fraudulent bills and collecting undeserved fees.

BML Properties Ltd., led by wealthy Bahamas businessman Sarkis Izmirlian, sued CCA Tuesday claiming the state-owned Chinese contractor pulled off a “massive fraud” to enrich itself at BML’s expense, leading to the collapse of the project in 2015. Delays in the construction of the biggest and most expensive resort to be built in the Caribbean have been a drag on the Bahamian economy in recent years.

BML claims that CCA submitted hundreds of millions of dollars in fake bills, understaffed the project and used it as a training ground for inexperienced workers. CCA knew it wouldn’t be able to meet the planned December 2014 deadline to open the resort but created the appearance that it would, in order to remain on the project and collect undeserved fees, BML claims. BML is seeking at least $2.25 billion in damages.

CCA didn’t respond to phone messages and an email seeking comment on the suit.

BML filed for Chapter 11 bankruptcy protection in Delaware in 2015. A U.S. bankruptcy judge dismissed the case in favor of a Bahamian court.

Baha Mar, which opened in April, is now owned by Hong Kong-based, Chow Tai Fook Enterprises Ltd. The development features more than 2,300 rooms, 40 restaurants and lounges, a convention center, a Jack Nicklaus-designed golf course, shopping and the biggest casino in the Caribbean, according to Baha Mar’s website.

BML outlined its claims in a 259-page complaint filed in state court in Manhattan.

The case is BML Properties Ltd. v. China Construction America Inc., 657550/2017, New York State Supreme Court, New York County (Manhattan).

Source: Bloomberg Business News Source – Posted December 26, 2017; retrieved December 30, 2017 from: https://www.bloomberg.com/news/articles/2017-12-26/baha-mar-developer-claims-to-be-victim-of-massive-china-fraud

All of this drama for a business model designed for … failure.

The Baha Mar Resort on Cable Beach features casino gambling and golf, two amenities that are failing more and more.

Casino
In a previous commentary, the business disposition of casino gambling was explored:

Increasingly in the casino/gaming industries, the money is not there. …

Despite the fact that the “house” always wins, the number of gamblers have declined! It is what it is!

  • 87% of Baby-Boomers gamble when visiting Las Vegas
  • 78% of Generation X-ers gamble when visiting Las Vegas
  • 63% of Millenials gamble when visiting Las Vegas

Golf
In a previous commentary, the business disposition of the sport of golf was explored:

“The games people play” … have relevance for our consideration. Golf is one of those games. But golf is more than just a game, it is an eco-system; but this eco-system is in peril.

    “The financial bubble burst and the Tiger bubble burst as well”.
    “Even as the economy recovered, golf is still in a nose dive”.
    “Your house is on fire”.

These (above) are among the key phrases from the narration of … [an] HBO Real Sports documentary story

This topic of the Baha Mar Resort is very important in the consideration of Caribbean economics, as casino gambling and golf has often been associated with Caribbean tourism.

The foregoing news article about Baha Mar aligns with the book Go Lean…Caribbean, which calls for the elevation of Caribbean economics. This book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) to better manage economic opportunities in the full Caribbean region. This is a Big Deal for the Go Lean roadmap to foster the diversification of the regional economy. Frankly, a $3.9 Billion investment should be able to generate better returns (job creation) than the Baha Mar fiasco has demonstrated. This hope for better tourism and economic diversification was identified early in the Go Lean book (Pages 11 – 14) in the following pronouncements in the Declaration of Interdependence:

iv. Whereas the natural formation of the landmass is in a tropical region, the flora and fauna allows for an inherent beauty that is enviable to peoples near and far, the structures must be strenuously guarded to protect and promote sustainable systems of commerce paramount to this reality.

vi. Whereas the finite nature of the landmass of our lands limits the populations and markets of commerce, by extending the bonds of brotherhood to our geographic neighbors allows for extended opportunities and better execution of the kinetics of our economies through trade. This regional focus must foster and promote diverse economic stimuli.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

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, like that of ship-building, automobile manufacturing, prefabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex. In addition, the Federation must invigorate the enterprises related to existing industries like tourism, fisheries and lotteries – impacting the region with more jobs.

The Go Lean book posits that there is a need to re-boot and optimize the engines of commerce so as to make the Caribbean a better place to live, work and play. The tourism product, the mainstay of Caribbean economy, used to depend on certain amenities (i.e. Casinos and Golf) that have now come under attack by the social and demographic changes. It so appears that the future for Caribbean economics cannot lazily depend on factors like “sun, sand, surf and smiles”, no, there must be intelligent business models.

This is a changed world and changed marketplace. Likewise, our economic engines must change to keep pace … and get ahead!

The Go Lean book presents a Way Forward.

Way Forward
The Go Lean/CU roadmap seeks to elevate all of Caribbean society to remain competitive and consequential in the future. This is the heavy-lifting of shepherding a progressive region of 42 million people, 10 million Diaspora, 80 million tourists, and 4 language groups across 30 member-states. The CU’s charter is to effectuate progress in this 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.
  • Improvement of Caribbean governance to support these above engines, including a separation-of-powers between CU federal administrations and local member-states.

The Way Forward / Go Lean roadmap includes the quest to create the jobs for the near-future. There is the plan to monitor, manage, and plan for new jobs. The roadmap provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society.

As a region, we have failed to keep pace of change. As related in that previous blog-commentary

… our society is now in desperate need of reform and to reboot to insulate from many demographic changes. On the one hand, we must diversify our economy and avail other high job-multiplier industries, away from tourism, but on the other hand, we must double-down in the tourism product, as the economic principles of “supply and demand” just cannot be ignored. (During the winter months, our Caribbean destinations are the “best addresses on the planet”.)

The Go Lean/CU roadmap calls for fostering industrial developments to aid economic diversification and to aid tourism. This includes incorporating best practices and quality assurances to deliver the “best experience in the world” for our visitors and trading partners.

This commentary has previously related details of the changing macro-economic factors in the world and how despite the dynamic conditions, jobs can be created. The following are samples of previous Go Lean blog-commentaries:

http://www.goleancaribbean.com/blog/?p=13700 Increasing Tourism Market Share
http://www.goleancaribbean.com/blog/?p=13420 A Lesson in Whaling History – Expeditions for Shipyard Jobs
http://www.goleancaribbean.com/blog/?p=13184 A Series on Industrial Reboots
http://www.goleancaribbean.com/blog/?p=12668 Common Sense of Eco-Tourism
http://www.goleancaribbean.com/blog/?p=8590 Build It and They Will Come – Politics of Infrastructure
http://www.goleancaribbean.com/blog/?p=7977 Transformations: Perfecting Our Core Competence – i.e. Tourism
http://www.goleancaribbean.com/blog/?p=6341 Doing Better with Tourism Stewardship
http://www.goleancaribbean.com/blog/?p=6089 Need Better Jobs Than ‘Minimum Wage’
http://www.goleancaribbean.com/blog/?p=4037 How to Train Your ‘Dragons’ or Direct Foreign Investors
http://www.goleancaribbean.com/blog/?p=2857 Where the Jobs Are – Example: Entrepreneurism in Junk
http://www.goleancaribbean.com/blog/?p=2126 Where the Jobs Are – Computers Reshaping Global Job Market
http://www.goleancaribbean.com/blog/?p=2003 Where the Jobs Are – One Scenario (Ship-breaking)

So this commentary advocates not doubling-down on bad trends that just “soak up” investments and produce very little return. We must be better and do better. We need to double-down on improving our tourism products and diversifying our economy away from tourism.

Yes, we can! We can do the heavy-lifting (hard-work and smart-work) to make our homeland a better place to live, work and play. 🙂

Download the free e-book of Go Lean … Caribbean – now!

Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.

———–

Appendix VIDEO – Baha Mar: The Las Vegas of the Caribbean – https://youtu.be/T7lGljlr01M

Caribbean Journal

Published on Aug 6, 2017 – The long-awaited Baha Mar resort project is finally here, and Caribbean Journal got an exclusive first look. So what’s it like? Well, it’s a unique, impressive project: a Las Vegas in the heart of the Caribbean.

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