Billion-dollar projects in The Bahamas and Dubai have not dampened strong revenue performance by resort developer Kerzner International, as the company increased net income in the second quarter of 2004 to $30.1 million, up from $22.8 million for the same period in 2003.
While overall company profits realised appreciable gains, it was Kerznerﾴs Paradise Island operations that achieved record levels of net revenue; revenue per available room (RevPAR); and earnings before interest, taxes, depreciation and amortisation (EBITDA).
ﾓAtlantis Paradise Islandﾴs strong performance drove these record results, as the property achieved an increase in RevPAR of six percent,ﾒ said Kerzner CEO Butch Kerzner in a company statement released yesterday.
He continued, ﾓInclusive of the One&Only Ocean Club, the Paradise Island properties achieved EBITDA of $50.6 million, marking the first time the property exceeded the $50 million level in the second quarter.ﾒ
Kerzner Internationalﾴs company-wide revenue increased by 13 percent during the second quarter from $149 million in 2003 to $168 million in 2004.
Occupancy and room rates were also favourable in the second quarter, with the Atlantis Paradise Island resort achieving an 89 percent average occupancy compared with 85 percent in the second quarter last year.
Daily room rates averaged $273 for the second quarter of 2004 up from $268 for the same period in 2003.
Highlighting initiatives to improve on those numbers, Kerzner Executive Vice President and Chief Marketing Officer Howard Karawan said the company successfully negotiated an agreement with at least one low cost carrier to increase airlift to this destination.
New York-based JetBlue Airways announced yesterday that it had requested authority from the U.S. Department of Transportation to provide international non-stop service to The Bahamas.
Pending approval from both governments, the proposed service from John F. Kennedy International Airport would commence on November 1, providing daily service to Nassau.
According to Mr. Karawan, JetBlue is also expected to provide airlift from Boston and Fort Lauderdale to The Bahamas.
Kerzner officials, he added, are at an advanced stage of negotiations with two other low cost carriers to provide airlift from Chicago to Nassau. That service could begin by January 2005, Mr. Karawan said.
The executive vice president and chief marketing officer along with other senior Kerzner officials yesterday reviewed second quarter performance via a conference call.
While most operations showed strong performance, one of the companyﾴs major sources of revenue experienced negative growth in the second quarter.
ﾓIn the Atlantis casino, the largest casino in the Caribbean market, table drop in the second quarter declined 11 percent over the same period last year, as certain high-end players changed the timing of their visits from the second quarter to the first,ﾒ the company release stated.
ﾓOverall, trends in the casino for the first six months of 2004 were comparatively better than last year, with table drop increasing by seven percent over the same period last year. For the quarter, slot volume increased by 13 percent over the same period last year, however, slot win decreased by four percent as a result of a lower slot hold due to a different mix of machines.ﾒ ﾠ
While touting their Bahamas operations, Kerzner officials also expressed high expectations for other company properties.
Just last month the resort developer announced that it would increase its Atlantis, The Palm project in Dubai from $650 million to $1.1 billion.
ﾓThe reason we expanded the scope of the project is because we have seen an amazing boom in tourism in Dubai and the One&Only Royal Mirage is the only brand I think to achieve 93 percent occupancy year to date and our RevPAR is up about 160 percent,ﾒ said Mr. Kerzner.
ﾓThere are just some outstanding numbers coming out of that project,ﾒ he added.
Darrin Culmer, The Bahama Journal
