Building frenzy in Caribbean leaves sour taste for some

Once upon a time, palm trees, sea turtles and Carib and Arawak Indians populated a necklace strand of 7,000 islands, islets, reefs and cays that curved 2,500 miles southeast from Grand Bahama Island off Florida to Trinidad, scant miles from Venezuela's coast.

So many islands, so little time. Even the Caribbean's first tourist was overwhelmed by the choices.

"I saw so many islands that I could hardly decide which to visit first," Christopher Columbus reported to Queen Isabella in 1493.

The choices for today's visitors are just as daunting, but travel guidebooks, word-of-mouth recommendations, the guidance of agents, Web sites, blogs and clever packaging by operators help to winnow the choices.

But what about where to stay?

With more than 300,000 rooms in 7,250-plus hotels, guesthouses, apartments and villas, and more opening faster than the price of gas rises, that decision can be more confusing than trying to decipher room categories and rate structures. Those totals, by the way, include 45,270 rooms in 471 properties in Cuba.

Throw in an unparalleled building frenzy bulldozing its way down the sweeping curve of powder-white, palm-fringed beaches, and the ruckus could be enough to send those who yearn for the quaint beach shacks and barefoot beer joints of yesteryear off to isolated stretches and calmer seas elsewhere.

There aren't a lot of those beach shacks left, although the Caribbean's small hotels and inns are a tough lot with fiercely protective clientele who balk at change and want few people to know where they go "limin' " -- a West Indies word for kicking back and checking out.

Investors and developers are tramping sea grasses all over the region, funneling huge amounts of money, jump-starting island economies for a time by hiring lots of local labor, promising post-construction jobs in the hospitality industry and altering skylines with structures much higher than the palm trees.

New designs are emerging. These days, very few of the big hotel projects are just hotels. The catchphrase seems to be "multipurpose destination resorts" that contain structures called condotels (condominium hotels) along with all-suite properties and a growing list of must-have facilities: casinos, marinas, golf courses, shopping villages, private residences, villas and infinity pools galore. 

Most condo owners, who benefit from the services and facilities of an on-site hotel, are more than happy to drop their fractional-ownership or timeshare units from time to time into hotel inventories to generate their own revenue streams.

Not everybody is happy about this construction boom. In fact, the relationship between developer and islander often is fractious.

A recent full-page ad in the New York Times by a group called the Waterkeeper Alliance hammered Marriott and Four Seasons for their planned 3,000-room developments along Puerto Rico's northeast coast.

The watchdog group claimed the projects would strip leatherback sea turtles, as well as 40 native and rare species of plants and animals, of their natural coastal habitats.

"Marriott is the management company, not the owner or developer," Marriott spokeswoman Kess Connelly said, pointing out that the Puerto Rico project has not yet broken ground.

Connelly also noted that Marriott pioneered its ECHO program, for Environmentally Conscious Hospitality Operations, years ago and has garnered awards and recognition for its turtle-protection projects and other conservation efforts worldwide.

"The finger is pointed at Marriott, but we are not guilty," Connelly said. "And the developer, in fact, already had put forth $1 million for turtle preservation in that area." The response from Four Seasons was much the same.

Big development is a touchy issue on several fronts, yet investors, bankers, developers and owners are rarely turned away by island governments.

More than 300 people crammed into the East End Long Look community center on Tortola in the British Virgin Islands one night this summer to grill Hong Kong investor Raymond Hung about plans for an $80 million resort on Beef Island, a smudge off Tortola's east end and the site of the B.V.I.'s main airport.

Although the government first gave its stamp of approval to the project 12 years ago, reviewed it last year and signed a good-to-go agreement in December, some islanders sensed paradise lost. 

Despite assurances from consultants and architects regarding their sensitivity to protecting the environment, residents voiced serious concerns about the Beef Island Golf & Country Club Resort, which will be the largest development ever built in Tortola, with a five-star resort, an 18-hole golf course, a marina, residences, villas and a retail center.

Golf course construction is expected to begin this year with tee-off in two years.

In the Turks and Caicos, a stirring of discontent resonates particularly among longtime repeat visitors who remember palm trees and dirt roads where there now are seven-story buildings and traffic jams.

A prime example is the recent announcement that Vienna-based O Property Collection will launch (on uninhabited Dellis Cay) a $1.5 billion hotel and villa project, which the firm modestly describes as "the largest development in the hemisphere."

Chairman and CEO Cem Kinay predicted that the O brand would "redefine the luxury property landscape."

But Is Bigger Really Better?

The development, scheduled to open in 2008, is expected to generate a billion dollars in residential sales in the next five years.

In its first-ever report on the Caribbean hotel industry, Atlanta-based PKF Hospitality Research found that Caribbean hotels continued to be profitable for owners and operators due to increasing rates of travel to the region. From 2003 through 2005, stayover visitors to the Caribbean grew by 19%, to 22.5 million.

"Caribbean hotels have profited from strong increases in demand, which has produced substantial gains in revenue per available room," said Scott Smith, vice president of PKF Consulting.

"The region has benefitted from an increasingly competitive airline market as well as more airlift to and from emerging and traditional destinations," Smith said. "In a new era of Caribbean tourism, the bar has been raised again, with demands for even higher standards of leisure and luxury. This has presented hotels with opportunities to create new streams of revenue."

And bigger and bigger developments, it seems. But is bigger better?

Pose the question to Atlantis Resort on Paradise Island in the Bahamas, and the answer is fairly obvious.

When it burst upon the scene 12 years ago, Atlantis was the biggest game in town. Today, it has 2,317 rooms, but that's nothing compared to what lies ahead for Atlantis.

Owner Sol Kerzner of Kerzner International will complete a billion-dollar expansion next spring of his Paradise Island playground, complete with the addition of Waterscape, which will reportedly be the largest water park in the Caribbean. The park will have water slides and rides that will transport guests through tropical jungles, whitewater rapids and underground waterways.

Guest room expansion includes the 600-suite Cove Hotel, a 21-story tower, a 495-unit condotel, two pools, access to two beaches, a fitness facility and many restaurants.

Throw in 100,000 square feet of new meeting space, the Caribbean's largest casino (1,000 slots, 90 table games, a baccarat lounge and nightclub), the 30,000-square-foot Mandara Spa, a Dolphin Education Center and a 65,000-square-foot Bahamian marketplace.

The Atlantis expansion has not, of course, escaped the notice of the Bahamas Ministry of Tourism, whose officials can barely contain their excitement.

Obie Wilchcombe, minister of tourism, announced his intention to seek more airlift in the next two years and to expand the international airport in Nassau.

That's smart, because -- hold on to your flip-flops -- another, even bigger project may knock Atlantis out of the top slot, even before the paint is dry and the cement is hardened.

Harrah's Entertainment and Starwood Hotels & Resorts partnered with Bahamas-based Baha Mar Development Co. to create what the developer bills as the largest single-phase development in the Caribbean in the Cable Beach area of Nassau.

The Baha Mar Development Co. is a subsidiary of Baha Mar Resorts Ltd., which acquired Nassau's Cable Beach Resorts & Crystal Palace Casino in May 2005. The three Cable Beach Resorts properties -- the Wyndham Nassau Beach, the Radisson Cable Beach and the Nassau Beach Hotel, as well as the casino -- are in the midst of an $85 million capital investment program.

Outing Secret Hideaways

Meanwhile, Baha Mar Development is planning a 1,000-acre, mixed-use resort of 3,550 rooms in four Starwood-branded hotels and the debut of the first Caesars hotel in the Caribbean since Caesars was acquired by Harrah's in June 2005.

The first phase of the behemoth undertaking represents an investment of $1.6 billion.

Harrah's Entertainment is slated to operate a 95,000-square-foot casino. Construction will begin next year with the first phase scheduled to open in 2010.

John Pagano, Baha Mar president, said the project, "which represents a strong vote of confidence from the Bahamian government and people, will establish a new blueprint for resort development."

And Wilchcombe said the planned revitalization of the Cable Beach area "will further establish the Bahamas as a premier island destination. We are competing with the world now."

These developments mirror what's going on up and down the island chain.

Even the best-kept "secret" locations are not safe. Consider remote Rum Cay, an island nine miles long by five miles wide, 40 miles east of Great Exuma in the Bahamas Out Islands, population 100. In May, ground was broken there for a $700 million mixed-use resort development project that will include a 200-slip marina for megayachts, a luxury hotel, residences, restaurants and shops, a spa and fitness facilities.

John Mittens, chairman of Montana Holdings Ltd., the Nassau-based real estate investor/developer, pledged "the utmost sensitivity to Rum Cay's environmental harmony and ecological balance."

And in the Dominican Republic, which of all the Caribbean destinations is perhaps the key barometer of the building boom, real estate projects are sprouting like palm trees.

Among the factors responsible for the fevered buildup are several new direct flights from the U.S., numerous investment incentives, a strong pool of cheap labor, miles of prime beachfront real estate and a plethora of all-inclusive resorts that creative tour operators package with highly attractive rates.

There's the 11,000-acre, multibillion-dollar Costa Bayana project west of Puerto Plata on the island's north coast, which will consist of three luxury resort communities called Atlantica, Bayana and Oceana.

The complex will have a total of 28 boutique hotels, 900 marina slips, six signature golf courses, three cruise ship piers and 11,000 residential units priced from $306,000 for a one-bedroom loft up to $5.2 million for a 7,750-square-foot oceanfront estate.

Two airports are also being built, one for private jets and an international airport near Montecristi, a 10-minute drive from Oceana.

According to Pierre Schnebelen, president of Costa Bayana Partners, the project "is designed to become the Costa Smeralda [in Sardinia, site of the Aga Khan luxury development] of North America, delivering the highest level of luxury to the most sophisticated clientele."

However, the 30,000-acre Cap Cana project now under construction south of Punta Cana is destined to lead the Dominican Republic pack in sheer size.

The $1.5 billion project runs along 3.5 miles of beach and includes golf courses, condos, several hotels, thousands of private homes, marinas and a marina village with guests ferried to and from yachts by Venice-style vaporetto water taxis.

Roco Ki, a Taino Indian phrase meaning "honoring the land," promises to be another seaside jaw-dropper. Situated on four miles of beach in the Punta Cana area, it will feature signature golf courses, a residential community, a marina and a Westin resort with a spa, five pools and a marina.

The financing arrangements include a long-term loan from the European Investment Bank (owned by the European Union), representing the first loan to a private Caribbean hospitality project by the EIB under the Cotonou Agreement, a partnership of African, Caribbean and Pacific countries and the European community.

"To have the EIB as our partner in the Roco Ki development reflects the bank's confidence in the project," said Nick Tawil, president and CEO of Macau Beach Resort, the project's lead developer.

"This validates our belief that Roco Ki's new luxury tourism resort, anchored by an international hotel chain, will not only be a huge success but also will pave the way for other tourism projects in the Dominican Republic," Tawil said.

Although Roco Ki is a large destination resort on 2,700 acres, Tawil said that it will operate and function as a close-knit community of employees, owners and guests.

"Roco Ki's philosophy is to obtain balance with nature, the environment and the local community," Tawil said.

Phase One at Roco Ki

The first phase of the 10-year project will debut in late 2007. The 327-room Westin Roco Ki Beach & Golf Resort will include 20 bungalows and 56 two- and three-bedroom condo units, a Nick Faldo-designed golf course, a spa and a conference center. A marina, private homes, additional hotels, a botanical garden and an interpretive museum will follow.

What's unusual is that the Westin will be the first internationally branded European Plan hotel, meaning no meals included, in the Punta Cana region, an area known for its all-inclusive resorts.

When asked about the reasoning behind this, Tawil said, "The Westin is an upper-upscale resort, and our target clients are not known to be heavy users of budget, all-inclusive resorts.

"Our guests will choose our resort based on the Westin reputation for personalized services and brand ambience. There will be six restaurants, room service and a gourmet market as well as packages with and without some meal components."

Other developments in the D.R. include four all-inclusive properties opening this winter from Spain-based Bahia Principe Clubs & Resorts, which also is opening a property on Jamaica.

Elsewhere, Temenos Anguilla, a St. Regis Resort, will debut its Greg Norman-designed golf course, the first on Anguilla, in November.

New York-based developer Flag Luxury Properties plans to open the rest of the $500 million project in winter 2008, including the first 120-room St. Regis hotel and spa on the island, estate homes, villas and 64 St. Regis Residences, priced from $1.4 million to $4.5 million each.

Another biggie on the small island is the Kor Hotel Group's Viceroy Anguilla Resort & Residences' project, which has garnered more than $250 million in residential sales since its groundbreaking last year.

Also in the works are Antigua's first new condotel in 20 years, a 200-room project of villas and bungalows by Miami-based BAP Development.

In Puerto Rico, Bahia Beach outlined plans for a master-planned resort community on a former coconut plantation 25 minutes from San Juan.

Incredibly, the list goes on and on.

To contact reporter Gay Nagle Myers, send e-mail to [email protected].