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Most cruise ports now frozen, but Nassau builds for the future, expects Q4 calls

CRUISE Nassau Cruise Port.jpg
Berth 16, to be extended, sits adjacent to the new upland development which will feature an iconic arrivals terminal, Junkanoo Museum and authentically Bahamian retail
Following its recent $130m capital raise, Nassau Cruise Port is forging ahead on its $285m project to transform the Bahamian capital's waterfront into a world-class destination.

This at a time when no cruise ships are sailing. Yet the developers expressed confidence in their plan to expand the piers at Prince George Wharf and inject excitement into arriving at Nassau from the sea.

Iconic arrival

Cruisers will be met by an iconic arrivals terminal, a Junkanoo Museum with dramatic elements, uniquely Bahamian retail, an amphitheater and other entertainment and food and beverage spaces. Nearby Bay Street will be revitalized.

'Coming off a ship, it will be like wow!' said Mike Maura Jr., CEO of Nassau Cruise Port.

Junkanoo Museum

As the opera house symbolizes Sydney Harbor, the Junkanoo Museum will stand for Nassau.

'People will be able to say out of all the different ports down through the Caribbean and indeed around the world, that's Nassau,' according to museum consultant Arlene Nash-Ferguson.

The 30-foot-high atrium will house a 20-foot Junkanoo sculpture. There will be a Junkanoo Hall of Fame, costumes and performances. Technology will be incorporated to make interactive exhibits. An Impact Theatre with floor-to-ceiling images will put visitors into the center of a Junkanoo parade — or sailing on a sloop in the Exuma Regatta or under water to learn about the impact of global warming.

All retail will be from the Bahamas, not duplicating the international brands found on Bay Street and setting the shopping experience apart from the rest of the Caribbean.

In what Maura said would be a very safe and controlled experience, visitors taking excursions will be directed by digital signage to their specific motor coach or head to a shaded taxi station. There will be security and police presence throughout.

Project 'critically important' to recovery

Nassau Cruise Port Ltd., a Bahamian company, began operating in October as part of a consortium comprising Global Ports Holding with a 49% stake, the Bahamas Investment Fund with 49% and the Yes Foundation, which supports youth education and sports, with 2%.

Though the timing seems unlucky — who could predict a global cruise shutdown? — the success of this month's oversubscribed bond offering showed confidence in the project.

And, thanks to Nassau's proximity to South Florida homeports, it is expected to be in the charts when operations resume, likely in the fourth quarter.

'Our project is critically important. Our success is a signal to our tourism partners that the Bahamian tourism industry, and specifically Bahamian cruise tourism, will continue to thrive,' Maura said. 'Moving forward on this project puts the Bahamas miles ahead of our competitors, who will be challenged to offer a product to rival our exceptional port and waterfront experience.'

Now in the demolition phase, the work is scheduled to move into construction within 60 days and will 'immediately produce much-needed jobs and support the creation of small and medium-sized businesses,' according to Maura. It will 'put food on the table for many Bahamians who didn’t know how they were going to feed their families in the weeks and months to come.'

Given that more than 50% of GDP is derived from tourism, the Bahamas were hit hard by the global travel halt, and their single largest tourism gateway is Nassau Cruise Port, where 3.8m passengers arrived in 2019.

A 2018 economic impact assessment by KPMG concluded the project would have a $300m impact on the Bahamian economy during the development phase and a $15.7bn contribution over the 25-year concession period.

Oversubscribed bond offering

Launched May 4 and closed May 15, the oversubscribed offering of 8% bonds with a 20-year term drew a majority of Bahamian but also international investors. Colina Financial Advisors served as the lead placement agent.

The COVID-19 situation drove up the cost of the money (though not as much as some major cruise lines are paying for their recent debt issues), however Bahamas Cruise Port has the ability to refinance when the time is right.

Maura predicts cruising will restart with three-/four-day jaunts. Since the Bahamas charge a single head tax for multiple calls on an itinerary, ships can visit several ports for a varied experience.

Three-phase project

Demolition of upland buildings is under way, even as the Bahamas Environment, Science and Technology Commission continues an environmental impact review of the project's marine side.

This marine phase is expected to begin in August and includes resurfacing the existing piers. At the northernmost pier (the one furthest from Bay Street), a new 800-foot berth will give the capacity to handle two ships of Oasis-class size there. And Berth 16, which sits against the shore where the existing arrivals terminal stands, will be extended with a new seawall/bulkhead to accommodate a third Oasis-size ship.

Reclaimed seabed from dredging will fill in land along a portion of Woodes Rogers Walk, creating new acreage for the future arrivals center, Junkanoo Museum, entertainment and food and beverage offerings.

ENKA Marine, a global engineering and construction firm based in Istanbul, is leading the marine works, supported by Bahamian firms.

The marine side is now projected for September/October 2021 completion, earlier than expected because reduced ship traffic following COVID-19 will mean fewer work interruptions. The upland development, designed by Bermello Ajamil & Partners, is targeted for completion in the first half of 2022.

How COVID-19 changes the cruise count

After the whopping 3.8m cruise visitors in 2019, this year's count is forecast as 1.47m. That tallies the 835,000 passengers from Jan. 1 to March 16, then six months of no arrivals, and 635,000 from October to year's end. This makes for a 40% dip in Q4 year over year.

In 2021, 2.6m cruisers are projected. 'By no means are we expecting a rebound,' Maura said, 'but since the Bahamas are close to the Florida cruise market, we believe we'll benefit.' (Before COVID-19, close to 4m passengers were forecast.)

Nassau could start approaching its 2019 numbers in 2022 as the new port becomes fully operational. Given COVID-19's chilling effect, Maura doubts other Caribbean destinations will be investing to the tune of $285m, as Nassau Cruise Port is.

In about 15 years, 5m cruise visitors could arrive annually.

IPO planned for Spring 2021

The recently raised debt will support the port's demolition and construction phases. In March/April 2021, an initial public offering is planned to add equity through the Bahamas Investment Fund. Via this IPO, thousands of Bahamians will have an opportunity to own a piece of the action, starting with an anticipated $1,000 minimum. Some 15,000 to 20,000 individuals are expected to buy in.