Published by: Fay Simmons, June 28th 2023, Tribune News
A senior Royal Caribbean executive yesterday pledged that a key objective of its $100m Paradise Island project is to have the bulk of revenues and profits generated remain in The Bahamas.
Jay Schneider, the cruise line's chief product innovation officer, told a Bahamas Chamber of Commerce and Employers Confederation (BCCEC) brunch sponsored by Royal Caribbean: “As we've gone through this journey, really the goal is to make sure that we ensure that profits stay in The Bahamas.
"There’s a number of ways we’re doing this, and one of the ways is if you look at the structure of how we're developing a joint venture, which will essentially be the joint venture of the Royal Beach Club. Forty-nine percent of the total business, so total joint venture, that will really be owned by Bahamians with the remaining 51 percent owned by the Royal Caribbean family.”
Mr. Schneider maintained that ensuring the Government has a stake in the Royal Beach Club will allow profits to be generated for the Bahamas National Investment Fund to further develop the tourism product. He added that the valuation exercise for the four Crown Land acres that Royal Caribbean will be leasing, and which will be converted into the Government's equity stake, will be released in about two weeks.
He said: "We felt was really important to make sure that equity was given to the Government. And one of the first real important mechanisms to drive profit back into The Bahamas is, rather than just a lease, real equity, so sustainable profits will be returned to the Bahamas National Investment Fund, the fair market value of the four acres.
“We actually just completed the rapid assessment, I haven't actually seen the results yet, not for about two weeks, that will post on our website. That is valuing the totality of all of this equity model constructed for the Government's contribution, so one part of that equity is for the Government.”
Mr. Schneider explained that the Royal Beach Club's daily operations will be managed by Bahamians through partnerships with local companies, providing support for businesses that need scale and empowering entrepreneurs to provide services the development will need.
He said: The vast majority of the operation, the goal is that it's really run and managed by Bahamians. We think about it through a couple of different ways. The first one is really partnering to scale businesses. If you have a business, we want to partner with you…so if you own a laundry business, beach clubs have towels, and so we need a laundry partner as an example.
“The second part of the thought process is that those businesses need scale and support. And one of the benefits of a joint venture like this is we can help scale and support. So if there is a business that meets all the requirements, or one of the areas of the business, scale is where we can help.
“The third part of it is we want you to work with us and help you help us. And so as we go through this process, help incubate entrepreneurs who really can help scale themselves and create a business to help support us as well.”
Mr. Schneider said Royal Caribbean would hire locals to handle operations only if it cannot outsource to Bahamian businesses. He explained that the range of 200 to 400 workers is due to the lack of information surrounding the upcoming partnerships. He estimates that if Royal Caribbean hires staff to manage operations, about 300 persons would be needed, so the range accounts for the staff needed for outsourced arrangements.
He added: “And then if all of that fails, the last one on the list is, of course, to hire locally. So we estimate that it's somewhere between 200 and 400 jobs we think will be created and needed to sustain operations. Why it's such a wide range is when you're relying on a goal to maximize Bahamian participation, would Bahamian businesses have to do work to bring that to life?
“We're relying on partners that don't exist today, and how they do business, to shape the number of employees they need to deliver the services. Our estimate if we were to do it all by ourselves would be we’d need about 300 people, which is why we can range about 200 up to 400.”
Mr. Schneider said Royal Caribbean has opened a new recruitment office at The Pointe, and explained it will be used to find staff for its ships, Coco Cay resort and the Royal Beach Club upon the latter's approval.
He said: “We did open a new recruiting office here at The Pointe. Somebody asked me, it feels like we're jumping the shark a little bit by opening a recruiting office. The reality is we recruit for many different parts of our business. We’re recruiting for our ships as part of this office, as well as recruiting for Perfect Day at Coco Cay.
“So, this recruiting office was important for us to establish as a storefront not just eventually for the Royal Beach Club once we get through all of our environmental and regulatory approvals, but really as a benchmark and beachhead for, frankly, all of the recruiting that we need to do in The Bahamas, given the importance of The Bahamas to us, and so we plan on expanding that office as we go. But it's a great first start for us.”
Read the entire article here: http://www.tribune242.com/news/2023/jun/28/royal-caribbean-pi-project-aims-retain-profits-loc/?news
