The most impressive resort in the Caribbean in the 80’s; the Crystal Palace Resort & Casino site will now become a waterpark

We all watched in rapture this week as the old Crystal Palace Hotel imploded, but it has since crossed my mind that the hotel was not really very old. It actually had quite a short (and sordid) history in the grand scheme of things. Let’s face it, 35 years is not a significant lifespan for a gazillion-dollar resort project. Hopefully, moving forward, the new breed of mega-resorts and developments, with all of their land subsidies, incentives, and tax breaks will benefit the Bahamas for more than one generation of hotel industry workers. In the meantime, whilst politicians and international consortiums monopolize the stage with their mega ‘anchor’ projects, the most amazing thing is quietly happening in the Bahamian tourism industry, right underneath everyone’s noses

Airbandb! Yes, most people have heard of this term by now, however there has been little public discussion about Airbnb in the Bahamas and what is really going on. As a real estate professional with many years of experience dealing with vacation rentals, I can tell you that there is a silent, game-change going on in the Bahamas and it’s probably about time the fledgling industry begins to stand up and account for itself.

There is nothing new about people renting other people’s homes for short-term vacation accommodation. For decades, this was typically handled by local real estate agents and it tended to revolve around the higher end of the market in places such as Harbour Island, Treasure Cay and George Town. It wasn’t exclusive by any means, but it was assumed that you had to have a really amazingly expensive property to participate. What’s different now is that global online platforms such as Airbandb, have enabled literally anyone with an internet connection to market and rent their respective ‘occupiable’ spaces to any interested holiday-makers from all over the world. Airbandb is one of many sites, by the way, but my point is that they are simple and inexpensive technologies and they are EMPOWERING Bahamians to participate in the tourism sector in such a positive way that no one could ever have imagined.

Think about Crystal Palace. They brought in a thousand Bangladeshis to build it (no, nothing new about foreign construction workers). It had to be bought and operated by the government when it was in trouble (nothing new there either), and at the end of the day, who knows what financial benefits it has really netted to the Bahamas, apart from providing hotel worker jobs. This has been the goal of various governments over the years; hotel worker jobs. But let’s be honest with ourselves about the situation. You’re looking at a foreign-built hotel, owned by foreign investors, with a foreign franchise and foreign executives and managers, and working-class Bahamians are typically the lowest on the totem pole, getting paid a minimum salary. That’s been our tourism model. Whilst the international partners in this program come and go, this economic model has been confronted with decades of losing customers to our Caribbean competitors, falling room and occupancy rates, and a cycle of resorts in distress having to be bought and supported by the government all over again. This isn’t to say that the mega-hotels are bad, nor all the hard working people that operate them, but in the long run, the reality is that so few of these anchor projects have had the major positive impact that was hoped for.

On the flip side, think about an opportunity for a Bahamian being able to rent a room directly to a tourist; a one-on-one interaction where the Bahamian host is 100% responsible for making sure their guest has a good stay and receives 100% of the money they are spending in the process. Instead of putting on a uniform and showing up for a line shift and smiling all day so that franchise ‘x’ can make a profit to send to Wall St, the Bahamian host just has to get up and smile…all the way to the bank. Of course, it is not all that simple, but I truly believe that we are on the verge of something extremely important here. This is an opportunity to bring back the genuine Bahamian hospitality that made the country famous in the 50’s and 60’s, but this time it’s completely in the hands of the majority, 100% in the hands of the tourism workers.

So far everyone has been terrified that this new ‘disruptive’ technology would have a negative impact on the big hotel business. Hasn’t happened. The Airbandb market is predominantly made up of people that would normally NOT come to the Bahamas, because it’s notoriously too expensive. The facts are showing that the vast majority of people coming here to stay in Airbandb are NEW BUSINESS. That is – plane loads of budget travelers adding up to a whole lot of money and they are all going away happy and telling everyone that IT IS better in the Bahamas.

In Nassau right now, there are nearly 1,000 active Airbandb listings. The average rate is $170 a room night and average occupancy is close to 50%. That is roughly $30 million dollars a year of gross income and the entirety of it is going directly into the local economy. If you include all of the other online platforms, family island listings, and 20% year-on-year growth, it means this little mom and pop industry is rapidly becoming as important as the commercial fishing industry with regard to direct foreign income.

This is crazy good. It is directly and indirectly distributing tourist dollar into every neighborhood. Tourists from all walks of life are venturing into inner city suburbs and staying with and interacting with real Bahamians…and loving it! This technology allows you to advertise a room, an apartment, even a tent (which someone is doing in Nassau and is getting great reviews)! You can set your own rates and make your own house rules. You can activate your listing or deactivate it when you want your family to come to stay. You can make a few extra bucks by cooking your guests dinner or taking them on a private tour. The only caveat is that your ratings online are based on direct guest feedback. The more genuine and nicer a host you are, the more business you get. There are no built-in gratuities, so you can’t suck your teeth and get a tip anyway. It’s one-on-one, real-life customer relationships with constant feedback that immediately affects your income, which even the most hard-headed Bahamian can understand…and take advantage of…in a good way.

This new form of cyber commerce is also self-regulating so we don’t need to establish another overweight government ministry to manage it. There are no crooked heads of agreement, no government bailouts, no political risks, no stress on the government at all. I know some people are going to cringe when I say this, but I do believe there should be a tax on it. If Airbandb can add VAT at the point-of-sale and hand that straight to the government, it may just help our wise leaders to realize that this is a fantastic opportunity for the country and they need to take their cut and keep the heck out (because it is doing just fine without them).

Other spinoffs include, but are not limited to, an uptick in people improving their properties for rent, which is great for local construction. In the real estate industry we are seeing more and more investors making property purchases based on potential short-term rental income. There is a growing demand for people to help manage and maintain the rental properties. There are more tourists coming that are more inclined to visit local bars and restaurants and are generally spending all of their vacation dollars outside of the mega-resort complexes. More people are travelling to the family islands and it’s opening up tourism where there are no hotels, and this is all fantastic for everyone. I am sure there are a few small hotels out there still feeling threatened but at the end of the day, a more diversified tourist model creates momentum. More tourists equals more spending, more spending equals more bars and restaurants, more activities, more flights, more tourists having more fun which equals even more tourists ……and I dare say that it is all good change!