BUSINESS OUTLOOK CONFERENCE ON ABACO HIGHLIGHTS EMERGING

UNCLAS SECTION 01 OF 02 NASSAU 001437

SIPDIS

STATE FOR WHA/CAR/, EB/CBA WINSTEAD, 4322/ITA/IEP/WH/OMCB/MBROOKS,
AND
SANTO DOMINGO FOR FCS

E.O. 12958: B/A
TAGS: ETRD EINV SENV BF
SUBJECT: BUSINESS OUTLOOK CONFERENCE ON ABACO HIGHLIGHTS EMERGING
FNM THEMES



1. SUMMARY: At the 4th Annual Abaco Business Outlook Conference
earlier this fall, Deputy Prime Minister Brent Symonette told
delegates that the Free National Movement government plans to
monitor the environmental impact of major hotel investment projects.
The theme of the conference, "Growth by Design," was fitting for
The Bahamas as it tries to manage the rapid growth of the Family
Islands (islands outside of New Providence). Conference speakers
noted that the future of The Bahamas is in the Family Islands and
that Nassau is close to maximizing its potential. The Bahamas
Director General for Tourism noted the increased competition from
larger rivals such as Dominican Republic and Mexico. END SUMMARY.

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GOVERNMENT CONCERNED ABOUT THE ENVIRONMENT
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2. Embassy Commercial Assistant recently attended the Abaco Business
Outlook Conference, which featured Deputy Prime Minister Brent
Symonette, Tourism Director General Vernice Walkine, and Bahamas
Agricultural and Industrial Corporation Head Edison Key. Deputy
Prime Minister Symonette told conference attendees that Abaco's
environment was pivotal to its economy. He noted that the FNM will
not support developments that might create undue demands on
environmental resources and did not embrace Bahamian culture and
traditions. He observed: "Development that is not friendly to our
environment, which does not embrace our cultural traditions and
which creates undue demands on our environmental resources will not
be supported."


3. This environmental priority tracks with other recent meetings
with FNM ministers and with campaign statements made in April 2007.
Symonette said that the government now plans to amend the Hotels Act
and the Hotels Encouragement Act to permit the owners and operators
of small hotel and bed and breakfast establishments to access
customs duty and real property tax concessions for the first time.
These types of developments are reserved for Bahamians investors and
owners. The FNM government repudiated the previous government's
focus on "anchor projects," citing their high environmental impact
on the local communities. While it has not rejected any previously
approved project, it is unlikely to approve any new major projects
not already on the drawing board.


4. Minister Symonette also told participants that he will move
expeditiously to conclude consultation and adoption of a National
Marina Policy, establish independent standards for golf course
development, and adequately regulate coastal zone construction. In
pledging consultation with local communities, Minister Symonette
stated: "The time when governments could sit in Nassau and determine
the future for citizens living in the Family Islands without their
involvement is now gone."

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BAHAMIAN TOURISM IN 2010
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5. Director General (DG) for Tourism Vernice Walkine told Abaco
conference delegates that her main challenge and focus during her
tenure is to brand all major Family Islands so that visitors would
know exactly what each island has to offer. She said that this was
important because The Bahamas is still perceived as being just
Nassau and Paradise Island and that branding is the only way to
change this perception. The Bahamian islands will then be presented
as "a menu of island vacations." Walkine noted that The Bahamas
does not have the infrastructure to compete with other destinations
such as Japan or Dubai, nor the population size to match regional
competitors like Mexico, Cuba, and the Dominican Republic, that have
consistently received greater numbers of stopover visitors. Her
Ministry's plan is to "re-think" tourism in order to make all major
islands attractive to the global tourist consumers who are more
discerning and demanding.


6. The DG presented statistics suggesting that, in the year 2010,
The Bahamas will have an estimated 5,000 additional rooms, mostly
upscale - with up to five star rating. She said that Abaco
continues to be among the islands with the highest repeat visitor
percentage. According to Ministry of Tourism Exit Surveys, Abaco
received 63,000 visitors for the first half of 2007. These visitors
stayed an average of 9.4 nights. Additionally, a significant
percentage of visitor arrivals to Abaco are affluent, with household
income exceeding $75,000. The exit surveys further revealed that a
majority of visitors to Abaco say that they are likely to return and
to recommend Abaco to their friends and relatives. Walkine said
that Abaco was the island closest to achieving the balance The
Bahamas ought to strive for in a tourism mix. She said that
economic growth in Abaco has come at a manageable pace that has been
assimilated by the community.

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WHAT ABOUT BAY STREET?
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7. Edison Key, Chairman of The Bahamas Agricultural and Industrial
Corporation (BAIC),told conference delegates that the future of The
Bahamas lies in the Family Islands. Key believes that both Nassau
and Paradise Island have reached their potential and do not have
anything further to offer tourists. He noted that Bay Street --
Nassau's main business street -- is in a state of disrepair and
unwelcoming to tourists, especially the cruise ship passengers that
frequent the area. Plans for the redevelopment of Bay Street were
left on the drawing board by the PLP, and the current FNM
administration is currently studying the plans before deciding on
their preferred course. The FNM government has also put plans to
rebuild the downtown straw market on hold and have cancelled
architectural plans left by the PLP government, stating that the $23
million price tag was too expensive. The FNM government has
allocated $3 million for its construction and is negotiating with
straw venders regarding an appropriate location for the market.


8. COMMENT: The Abaco Business Outlook conference presented a
snapshot of some of the general themes emerging from the new FNM
government regarding tourism. Overall tourist arrivals were down
roughly 10 percent early in 2007, which created angst in the
Bahamian government and business community. Summer and early fall
figures have rebounded, easing some concerns. Minister Symonette
has a strong interest in the environment, and both his and DG
Walkine's statements reaffirm the FNM government's emphasis on
smaller, boutique resort projects that better fit the environmental
and community needs of the Family Islands. While Edison Key's
comments may reflect his speaking to an Abaco audience, they also
reflect the challenges facing the redevelopment of Nassau's most
visible street. Bay Street is a mess, and the FNM government will
have to expend significant financial and political resources to
revitalize the area or risk losing at least some of the valuable
cruise ship passenger trade in the coming years.

HARDT