Inclusive model that benefits communities
Called Holistica, this 50-50 joint venture will create an inclusive model that meets the needs of communities, governments and air, land and sea travelers.
'This is innovative destination development for an evolving world. We need to be more thoughtful and connected,' Michael Bayley, president and CEO, Royal Caribbean International, told Seatrade Cruise News. 'The name says it all. We are trying to thoughfully take into account everybody so everyone says "This is good. This works."'
'A well-designed destination brings economic benefits to communities and cultural enrichment to travelers, while creating the least possible disruption to the human and natural environment,' added Mauricio Hamui, CEO, ITM Group. 'There is a way to do these projects inclusively, collaboratively and sustainably — and those are the characteristics this new partnership is meant to embody.'
$275m Freeport development
Holistica’s first project is a $275m development centered around the regeneration of the Grand Lucayan resort in Freeport, Grand Bahama Island.
'It's thought of as a port development, but it's so much more,' Bayley said. 'That project will integrate with cruise lines, airlines, the local community, government.'
There's additional cruise berthing, yes, plus three new hotels, a golf course, retail, a casino and entertainment. The plans also call for local ownership, employment, job training (for example, skills needed for jobs at Grand Bahama Shipyard), community investment and sustainable construction practices.
The project is currently under review by the Bahamian government and Bayley hopes approval will come in the next 30 to 60 days. If things move ahead, the phased development will start to come to life in late 2020/early 2021.
Plus Costa Maya, Roatán and Japan
Initially, Holistica will also own and operate destinations in Costa Maya; Roatán, Honduras; and Kumamoto, Japan. RCL has long partnered with ITM Group in the continuously updated Costa Maya on Mexico's Yucatán Peninsula, where a fourth berth recently opened. Costa Maya already supports a bevy of youth and micro-business projects in the neighboring village of Mahahual through its community-driven Fundación Costa Maya.
As earlier reported, ITM Group in 2017 bought the majority stake in Roatán's cruise port from RCL, and added a second berth to be able to handle two Oasis-class ships at once while also developing Garifuna Village with heritage attractions, entertainment, a restaurant, bars and excursions.
Kumamoto, meawhile, was put into the venture to 'symbolically have something in Asia and to speak about the global aspect' of Holistica, Bayley said. Japan is an important cruise destination and Quantum-class ships have been calling at Kumamoto for several years.
'It's not a huge project, but there's a lot of potential and there needs to be a partnership with the community to develop more destination experiences and attractions,' Bayley said. For now, the focus is on the port, specifically, building a cruise terminal for 2020/21 completion.
Why there's a need for Holistica
Bayley said there are many destinations around the world that want to develop and, for whatever reason, lack the resources or their governments don't have the credit rating to get financing. By bringing companies like Royal Caribbean and ITM into a project, and maybe other partners — three, four or five large, successful entities — the ability to get financing is remarkably different.
'The timing is right for a venture of this type,' Hamui added. 'A collaborative development approach, paired with meaningful private financial resources, gives local destinations the opportunity to grow the right way.'
The need for something like Holistica emerged when RCL and ITM Group — which have partnered for 15 to 20 years in various endeavors and currently have five or six projects — worked on the Grand Bahama vision.
Connectivity to communities is getting more and more important. Finding a way to create real community value is vital.
'You can't just swoop in, build and leave,' Bayley said. 'You have to create something sustainable that builds the community and provides opportunities. All these elements come together. It can't be one-dimensional.'
Holistica, the partners said, will ensure development that's a 'win-win-win' for travelers, cruise lines and communities.
Stand-alone entity, CEO search
Holistica has been incorporated and is separate from Royal Caribbean's private destinations and port development groups and from ITM. Based in North Miami, it will have its own CEO, management team, lawyers and human resources.
The partners have commenced a search for a CEO who will report to Holistica's board. Besides Bayley and Hamui, the directors are RCL CFO Jason Liberty and ITM Group's commercial affairs chief Robert Shamosh.
8m visitors annually
Holistica's four initial projects and others in the pipeline are expected to serve 8m visitors annually in about five to six years, according to Bayley. They'll be open to all travelers, including land and air vacationers and the passengers from all cruise companies. Bayley said he's briefed other cruise line and hotel CEOs in recent days and got an enthusiastic response.
Holistica is engaged in discussions about multiple existing and proposed destinations around the globe.
'We know there's a demand. We think it's going to be pretty big,' Bayley said. 'Holistica, over time, if it's successful, will have significant scale.'