Minister: Gaming Referendum In Summer Or Fall

Mr. Speaker, I rise to provide a report of a recent conference I attended in Miami, Florida – the Caribbean Hotel and Resort Investment Summit, or CHRIS.

The conference was held May 6th and 7th at the JW Marriot Marquis Hotel in Miami Florida and attended by hundreds of delegates involved in all aspects of hotel and resort development, including Government officials, developers, investors, lenders and hotel operators.

I was accompanied by Tourism Authority Chairman Designate Mr. David Dodwell. It was a most productive and enlightening conference – and a badly needed wake up call for Bermuda.

Mr. Speaker, It is clear that 2012 was a turnaround year for most of our competitors to the South, such as the Bahamas, Barbados and Puerto Rico which experienced an increase in tourism in terms of tourism revenue, occupancy and demand. Not so for Bermuda.

I also learned of the significant hotel developments in places like Puerto Rico and the Dominican Republic. In the Dominican Republic alone there are 10 major developments worth approximately $2.5 billion.

In the Bahamas they are developing the ‘Baha Mar’ Resort, which will comprise 4 hotels with a combined 2200 rooms, and more than 300 private residences. This is helping their economy tremendously with increasing employment – so much so that there are not enough locals to fill the jobs and guest workers are expected to come to the Island to service this resort.

Mr. Speaker, It is a sobering reality that 2012 was a turnaround year for Caribbean Tourism yet in Bermuda our tourism numbers were down 6%, GDP contribution from tourism was down and we are still in decline.

It became crystal clear to me at the CHRIS conference that we are no longer considered players in the hotel investment arena. As a country we must decide if we want to be in the tourism business or not.

It is clear that gaming features prominently in jurisdictions like the Bahamas and Puerto Rico. Indeed when I asked the question of how important gaming was to the jurisdiction, I was told it was crucial in getting new hotel developments to the country. To date their gaming has been geared more towards local residents and consisted mainly of slot machines, as they provide much revenue, but mainly attracted few visitors. However, they are now shifting to table games to bring new visitors to the island.

Mr. Speaker, I heard a presentation from the Premier of Montserrat and from the Deputy Executive Director of the Puerto Rico Tourism Company. They highlighted their primary competition and at no time was there any mention of Bermuda.

So this is a clear challenge to me as Minister and us as a country – we must make substantial shifts in our approach to tourism. We must make changes going forward. Those presenters from the financial community made clear that it is still a difficult environment for hotel development – banks are very cautious in lending and private equity is difficult to obtain. For these countries to entice
developers, the Government must play a significant role in helping by providing financial incentives which become game changers.

Mr. Speaker, To achieve these game changers to attract development, this Government will lay the gaming referendum bill this session and we expect to hold a referendum at the end of summer or beginning of fall.

Mr. Speaker, I will add that it is imperative for our Tourism revival that the referendum is supported.

Mr. Speaker, In other developments, in our efforts to strengthen and reinvent our tourism industry, the Tourism Authority statutory framework will be debated before the end of this session as well. This will significantly change the structure of how the tourism industry is managed in Bermuda.

We will also, for the first time ever, host our own hotel developer’s investment summit in late June. We have invited blue-chip developers, hotel investors and advisors to Bermuda – and expect thirteen representatives from this arena to discuss investing in Bermuda, to share their experiences elsewhere, and to tell us how Government can enable investment.

Some of the participants include:

• Collin Braithwaite – Associate Director of Hospitality & Real Estate, CIBC/First Caribbean Bank
• Ted Middleton – SVP Development. Hilton Worldwide
• Pierre Charalambides – Founder, Dolphin Capital Partners
• Mark Purcell – VP, Managed Development, Starwood Hotels & Resorts
• Alinio Azevedo – Director of Development, Four Seasons Hotels
• Richard Davis – Co Chair, Global Hospitality Practice, Greenberg Traurig, LLP

The Government representation will be the Cabinet Economic Development Committee led by the Honourable Premier Mr. Craig Cannonier and includes myself, Finance Minister Mr. Bob Richards, Minister of Public Works Trevor Moniz and Minister of Home Affairs Michael Fahy. The summit, which will be closed to the public and media, will be a day of intense sessions with these individuals, facilitated by an independent, outside person who is well respected in the industry.

A report will be prepared summarizing the conclusions reached.

Mr. Speaker, Whilst at the Miami conference, Mr. Dodwell and I met with leading investors and developers. We were able to make significant contacts and some of them will attend our summit in Bermuda.

Once we have concluded our summit I intend to produce a white paper containing recommendations to bring to Parliament, so that Bermuda can finally move forward with much needed development, and assistance to existing hotels, to reinvigorate our tourism sector.

Thank you Mr. Speaker

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