Baha Mar delays raise fiscal risks for The Bahamas

Subject

The impact of the Baha Mar development's travails.

Significance

The Baha Mar tourism development is The Bahamas' largest and most ambitious tourism project, with significant implications for the country's growth prospects, employment and government revenue. Work on the development began in 2011, and when completed, it will include four hotels, a casino, convention centre, golf course and more than 40 restaurants and bars. However, the opening, initially scheduled for December 2014 and later rescheduled to March 2015, has still not taken place, and no firm new date has been set.

Impacts

• Failure of Baha Mar would undermine hopes of reducing the fiscal deficit.
• The Bahamian tourism sector already stands to lose from a possible diversion of US tourists to Cuba.
• Baha Mar's bankruptcy could also affect the finances of local businesses and suppliers at a time when the economy is already weak.