|By Douglas Hanks Iii, The Miami Herald|
Knight Ridder/Tribune Business News
Oct. 27, 2004 - An international investment group announced a plan Tuesday to take on the Bahamas' Atlantis resort with another Las Vegas-style casino in Nassau.
The proposed 2,500-room Baha Mar would end Atlantis' six-year reign as the only megaresort in Nassau and test the growing popularity of the Bahamas as a tourist destination.
JetBlue and other discount carriers announced their first flights to the island chain this year, but Atlantis owner Kerzner International contends that the Bahamian market isn't deep enough to support Baha Mar.
The developers plan to spend $1.2 billion combining at least three hotels and a golf course on Nassau's Cable Beach into a 400-acre resort to be anchored by a casino, said Robert Heller, president of Baha Mar Development.
The company, identified only as U.S. and European investors, announced Tuesday that it had signed purchase contracts for the Nassau Beach Hotel and the Wyndham Nassau Resort & Crystal Palace Casino.
Under Kerzner's 20-year agreement with the Bahamas government, Atlantis and the Wyndham Nassau are the only two hotels in Nassau allowed to offer gambling.
Baha Mar also said it was negotiating to buy the government-owned Radisson Cable Beach Resort and called a deal "imminent."
A government spokesman did not return requests for comment.
Phil Ruffin, owner of the Wyndham Nassau and Nassau Beach Hotel, called Baha Mar's announcement premature and said the company only had an option to buy the properties. He said that the investment group was well funded but that it had not secured financing.
"They're basically just kicking the tires," Ruffin said. "They could probably get out for any reason."
If the real estate deals do go through, they would present Atlantis with competition of its own making. Analysts credit the opening of the mammoth twin-towered pink castle on Nassau's Paradise Island in 1998 with reviving the Bahamas as a tourist destination and say it was inevitable that another major resort would try to imitate the Atlantis business model.
"Success tends to breed competition," said Mark Ellert, president of the Interlink Asset Group, a Fort Lauderdale hotel-brokerage and -development firm. "It's certainly not a surprise there are people trying to get a chunk of the market Atlantis has created."
Heller said Baha Mar, the working name of the resort, would market less to families than Atlantis does and operate under a major casino brand.
Otherwise, Baha Mar would compete for the same pool of Northeast vacationers willing to pay upward of $300 a night for a Bahamas vacation.
Atlantis has 2,300 rooms and plans to add about 1,500 by 2007. Baha Mar has not said when its resort might open, but the Kerzner executives have warned government officials that Nassau can't absorb the proposed influx of pricey hotel rooms.
"I'm not sure we think it's a smart thing for the destination to put 80 percent of its rooms in the luxury category," Howard Karawan, chief marketing officer, said in a recent interview.
Kerzner, a company based in Plantation, commissioned a market analysis that concluded that a midprice resort should go up on Cable Beach to give travelers more options in Nassau. But Heller, saying the Bahamas could grow to accommodate both resorts, rejected the criticism.
"Does Disney compete with Universal," he asked, referring to Orlando's two main amusement parks. "Yes, but it grows the market because the offerings are very different."
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