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By admin | March 31 2014
“I remember before” is a common traveler’s lament about how a once favorite, unspoilt spot has been overbuilt and overrun. While sometimes these places are able to re-invent themselves, getting too big too fast is a sure fire way to lose one’s identity and turn something special into a Priceline special.
Nearly a year-and-a-half into his tenure as Premier of the Turks and Caicos Islands The Hon. Dr. Rufus Ewing (below right) will have much to say about how elite travelers of today refer to his country in 10 or 20 years and probably a lot longer.
Judging by the tarmac at Provo Air Center at Providenciales International Airport last Friday – nearly full with over 50 private jets of varying sizes – his nation continues to be a hot spot for elite travelers, albeit with a heavy reliance on North America. There are 19 resorts rated as “luxury” by Five Star Alliance (out of 56 covered by TripAdvisor), and starting rates can easily begin at $500 and often $800 per night. While many times the arrival of a Four Seasons or Ritz-Carlton brings cache to a destination, Turks & Caicos has successfully put itself on the high-end map with an eclectic compilation of homegrown brands and a smattering of niche luxury groups – Aman (Amanyara pictured below), Regent, Como and Gansevoort so far.
Pre-recession plans that would have seen Fairmont, Mandarin Oriental, Ritz-Carlton and a few others have yet to get going again, although chatter is that there will be some news very soon. Unless you are a shareholder in McDonald’s, Burger King or Starbucks, and perhaps even if you are, you’ll be happy to know there are no fast food chains or franchises on the islands. Over a drink with Canadian born developer Stan Hartling (below) at The Regent Palms which he opened in 2005, it becomes clear that there is a strong desire to keep Turks & Caicos, or TCI for short, out of the mass. In discussing the leading celebrity chefs who now typically have 30 or 40 restaurants, it sounded as if that might even be out of place with the current vibe. Later Premier Ewing expressed to me instead of being invaded by various chains or groups, he would like to develop some of his country’s homegrown concepts to one day be exported.
With about 3,000 hotel rooms, 30,000 residents and 200,000 annual visitors the British Overseas Territory is small, but has broader potential than other places in the Caribbean. The fact the runway at PLS (lengthened in 2011 to 7,600 feet) can take widebody flights means expansion has to be carefully managed. There is already a brisk rotation of commercial flights by US Airways, United Airlines, Delta Airlines, American Airlines, JetBlue, Air Canada, WestJet as well as a weekly British Airways flight via Nassau.
The largest jet to land recently at PLS carried the Emir of Qatar, who arrived aboard his executive version Airbus A340, demonstrating that even among elite travelers not all private jets are created equal. The Emir’s visit highlights, like much of the Caribbean, TCI has the opportunity to raise its profile on the global stage (According to Travel Weekly, China’s current investment in the region is over $9 billion). Will the Emir follow the investment lead of single digit billionaire Lord Ashcroft, who recently opened the former Nikki Beach as Blue Haven Resort and Marina (its docks can handle yachts up to 220-feet) and has been upgrading the 21-suite Beach House? Speaking last Fall on Bloomberg Television, Grace Bay Resorts (pictured above) CEO and Founder Mark Durliat said the value of his group has risen from $14 million in 2001 to $250 million as of 2012. Either way investment tourism is a key strength and opportunity for Turks & Caicos.
The Caribbean, I believe, needs to position itself on a worldwide basis, particularly gems likes Turks & Caicos, if they want to remain focused in the high yield Upper Upscale and Luxury segment. In New York it often seems more people I know go on their honeymoon to the Maldives, stay in a Palace resort in India or ride elephants in Chiang Rai, Thailand than, well, go the Caribbean. It speaks to the point that with new long-range aircraft such as 747-400s and 777ERs you can fly virtually anywhere in the World today with one change of planes. Places that used to count on strong regional feeder markets are going to find a combination of value oriented long-haul airfares and shorter travel times mean the next generation of mass affluent and upper affluent consumers will be traveling further afield than their parents. At the same time with two additional airports that have 6,000 feet runways, and one more at slightly over 5,000 feet, access by the private jet market is a sweet spot that could enable TCI to generate continued growth in revenue without the wear and tear of mass tourism.
While the desire and ability to travel the globe is not contained anymore to the Super Rich, in the Ultra High Net Worth category ($30 million + Net Worth) virtually ever survey shows the very top end of wealth is more global than ever, coming from more places and going more places. Whereas the general affluent consumer goes someplace once, checks it off their bucket list and doesn’t come back, elite travelers often return and then become investors in the places they visit. The interest in finding safe havens for investment has probably never been stronger, and it is coming not just from China, but the Middle East, fast growing economies in Africa, CIS/Baltic Republics and Central & South America. For TCI many of these countries also have reverse travel seasons from North America and could provide a steady stream of super rich guests during what is the low season for the Caribbean’s typical U.S. and Canada customers. What’s more, the trend among U.S. UHNW families to take “multi-generational family group” vacations peaks in the Summer, and is well suited to places such as TCI where its relatively small resorts are ideal both for full and partial takeovers, and the good commercial airlift means private jet owners don’t have to fret about how the rest of the party will get there.
Demand by private jet travelers has surged to the point that there will be a second FBO opening by year’s end – Signature Flight Support – and the incumbent Provo Air Center will have a new terminal in November. On Wednesday, Thursday and Friday last week I was told there were about 25 private jet arrivals each day. If one uses the Prince Research benchmark that the value for a destination of a private jet party, excluding fuel and landing fees, runs about $70,000, in just 72 hours elite travelers brought around $5 million in spending to the TCI. Maria Sastre, the worldwide CEO for Signature noted, “The Turks and Caicos jet market has seen substantial growth over the past decade and we anticipate it will continue.”
Based on various reports, hotel inventory in the next decade will double with development focused on the high end of the high level. That would be a good thing from my view. The world has plenty of mass tourism destinations. Hartling is now working on his next project, Shore Club, on nine acres with potentially 25 additional acres for expansion. There will be a mere 30 units and six villas (rendering above) that will sell in the $5.5 million + range. Saying his goal is to improve on The Regent’s already luxe offerings, underground service tunnels will mean no more clanging of room service carts between buildings. Prep kitchens in the villas will mean that owners and guests can have private dining experiences with the chef out front or in the back.
During dinner with the Premier, I get the sense that he is on track to embrace the unique laid back natural beauty and easy pace that makes Turks & Caicos a special place. He is looking into attract more elite travelers by offering jet and yacht registration services. He understands the high value of the jet and yacht market, and that as the adage goes “mass follows class.” Medical tourism is also under consideration.
Singapore born and raised Nikheel Advani (right), who cut his teeth opening some of Ritz-Carlton’s most iconic properties, training under legends such as Horst Schulze, Herve Humler and Alberto del Hoyo, is COO and Principal of Grace Bay Resorts. On his website legendary hotelier Cesar Ritz is quoted saying, “The customer is never wrong.”
The host of our dinner, Advani noted that the best way to get Vice Presidents to put Turks & Caicos on their vacation map is to keep getting their CEOs and Owners to come. He cited travel ad agency guru Peter Yesawich (Vice Chairman of MMGY) whose research of affluent consumers has long guided many industry marketers. MMGY’s study “Portrait of Affluent Travelers” focuses on the mass affluent (Under $1 million Household Income) and has long held out that direct and non-direct recommendations from people held in esteem carry more weight than typical ad campaigns. I think Turks & Caicos is certainly an example of where a well-executed top-down strategy works well.
In terms of natural assets, Grace Bay was recently voted as second best beach in the world by TripAdvisor, and it would be hard to argue that TCI is anything but stunningly beautiful. With its picturesque barrier reefs, mangrove swamps, salt flats and sandy beaches, it’s a bit like the beautiful woman who looks better without makeup. Interestingly if Turks & Caicos could be raised 50 feet, it would be larger than Puerto Rico.
Service, or sometimes lack of it, has long been an Achilles heel when comparing Caribbean resorts to Asia depending on who your talk to. And while every tourism promoter likes to sell their people as an asset made up of smiling, welcoming faces, TCI has had an interesting level of success in showing it can compete on the world stage. Hotels here are regular entrants in Elite Traveler’s annual “101 Top Suites” list encompassing the best new suites and hotel villas in the World. Luxury Travel Advisor recently selected Grace Bay Residences as Best Hotel Villas in the World, and The Regent’s General Manager Karen Whitt was at the same time voted by travel agents top General Manager in the World. In visiting various hotels I met managers whose backgrounds included the likes of Raffles, One & Only and Mandarin Oriental.
Advani joined Grace Bay Club in 2004 when it was a 21-room boutique hotel, has overseen its growth to four distinct concepts with 82 suites, villas and residences (pictured right). He has also been driving a push to ensure that the local population, referred to as Belongers, will play a key role in the management and development of TCI’s tourism future. He has established the Grace Bay Club Hotel School. During my visit I met Stephen H. Spahn, Chancellor of The Dwight Schools, which recently opened campuses in Beijing and Seoul. One potential application would be a TCI branch where local high school students could gain a valuable head start to a management career in hospitality via a mix of local brick-and-mortar classroom education and access to the best and brightest via high-tech Internet classrooms.
Currently there are six AAA Four Star rated resorts, but in a data point that shows the high levels of service found in TCI, consumer reviews on TripAdvisor rate 55 of 56 resorts with Very Good to Excellent ratings regardless of star rating.
With much having been accomplished in the past decade, Premier Ewing now will set the course for the next generation. Will this group of 40 islands and cays take its place on the global stage alongside places such as the Maldives, Tahiti and Monaco or will it take a more mass approach? A practicing medical doctor whose style is more about listening than talking, many are waiting to see what Premier Ewing’s prescription for the tourism future will be.