Hotel & Motel Management / August 10, 1998
By Larry Luxner
NASSAU, Bahamas -- What's being billed as the world's largest island resort is rapidly rising on Paradise Island, an 800-acre spit of land just over the bridge from Nassau.
Sun International Bahamas Ltd., a consortium controlled by South African multi-millionaire investor Sol Kerzner, is spending $450 million to more than double the size of its existing 1,138-room Atlantis Paradise Island resort to over 2,300 rooms. That would dwarf any other hotel in the Caribbean, and its 50,000-square-foot casino would be the largest in the world outside Las Vegas.
"This is probably the biggest private construction project the Bahamas has ever seen," says Timothy Brown, the company's project manager. "Once everything is complete, we're looking at an $800 million investment, with a total of 5,400 permanent employees," up from the current 3,500.
Guests at the hotel already have access to a casino featuring 800 slot machines and baccarat, blackjack, roulette and craps, as well as a 14-acre waterscape park featuring a 3.2 million-gallon saltwater, open-air aquarium with more than 100 species of marine life in six exhibit lagoons.
"We're about to employ 2,000 additional workers," said chief operating officer Alan J. Leibman. "The spinoff for the economy is huge. There is great pride for people wanting to work for the Atlantis. Over 9,000 people applied for 2,000 jobs."
Leibman noted that in 1997, the once-marginally profitable Atlantis enjoyed a year-round occupancy of 88% at an average room rate of $178. This year, he said, "we're looking at pushing 88% at a rate of $189. We're obviously focused on bottom-line performance."
It certainly seems that way, given the hotel's 1997 earnings of $62 million on sales of $265 million -- making last year the most profitable in the resort's 30-year history. Roughly a third of total sales come from the casino, which is one of three in the Bahamas (the other two are on Cable Beach, Nassau, and the Princess resort in Freeport).
"We have an agreement with the government that, for the next 20 years, precludes the issuance of additional casino licenses on Paradise Island and New Providence," Kerzner wrote in a recent letter to investors. "We cannot conceive of a scenario in the medium term that would entail the development of another project in the Caribbean similar in scale to Atlantis."
Upon completion of the 23-story Royal Towers, with its 1,208 rooms and suites, the new Atlantis will offer more than 11 million gallons of water activities and attractions, including a five-story-high, life-size Mayan temple with water slides, and a dozen new restaurants and lounges.
"We don't want it to be a Disney World, which is very predictable, but we also don't want people to be camping and backpacking around the place," said Leibman. "We want to create a highly themed property."
Brown said his team plans to tear down the existing casino and build a 25,000-square-foot convention center in its place, to be opened in April 1999. The casino will be relocated and doubled in size.
"This is the largest investment we've ever done," says Leibman, whose company also owns casinos and mega-resorts in Atlantic City, Las Vegas and the Indian Ocean islands of Mauritius and the Comoros. "Sun International is better-known throughout Europe than in the United States. About 40% of our guests come on package deals, though casino junkets are not our business. We are a resort that happens to have a casino. We've been in a position where we've not had to discount that much."
Currently, 40% of guests at the Atlantis come from South Florida; another 30-35% from the New York-New Jersey-Connecticut area, and the remainder from other U.S. locations, Europe and the Far East.
"Business has been very good," he said. "The economy is very good, and the resort has built a great name for itself. On weekends, for every reservation we turn six away. We just don't have the availability. In the last three weeks, we haven't had a day under 92%."