Managing Partner (The Albany Resort)

FDI is a highly dynamic and competitive field, with all countries in the Caribbean fighting for the same scarce FDI dollars. In your opinion, what makes The Bahamas the premier investment destination in the region?

I think there are several factors. The first one is its proximity and access to the US. So firstly its location, we are 25 minutes from Miami in case of some emergency or just the ability to move around versus says Barbados, which is located more south in the Caribbean and harder to get to. So Americans don’t have as many direct flights to places like Barbados as they do to Bahamas, and the British are neutral and just as likely to pick Barbados as they are Bahamas because British Airways flies directly to both locales and both are approximately the same flight time.  People from the US and Canada, however, are not indifferent - In aggregate they represent 400 million people, so the biggest pool of customers for anything we do, whether it is sell hotel rooms or houses, is sitting right next to you. So direct flights from a number of cities and time of journey matters.

The second is the tax environment which is very pro-business. That is important because proximity, access & a favorable tax environment lead to the third reason, which is that you need the necessary infrastructure to provide for a full-time living location. We believe New Providence is the primary place in the English-speaking Caribbean where you can have full-time living. The recruitment of staff, etc. becomes very difficult when one is faced with living full-time on a remote island location, no matter how beautiful it is. It is important not to confuse vacation with living. The “live-in” place must have hospitals, schools, travel links, people like you that your family can socially be around year round.

Then the history of the country and rule of law becomes a final factor. Within New Providence there has been a history over the last 50 years of attracting wealthy people to own homes and I guess you would call inertia and comfort. Finally the rule of law in The Bahamas is a stable one as it is based on British system and that system is respected & followed.

These are the reasons why people like to invest in The Bahamas. Specifically in New Providence where a full-time population exists we are not at the whims of the stock market i.e. when its doing well there are buyers and when it’s going badly they are not. So in a place where there is a full time population, it is different. You have the holiday-home buyers in New Providence, but you also have full-time buyers and that is the most important thing in our business. We are not just going to be successful when the stock markets are doing great. Between 2008-2010 we were successful but our buyers were not coming from USA during those years. They were coming from England, Continental Europe, Canada, Australia, South Africa and other places where people were finding those other reasons other than a cool margarita and a beach to be here. That removes your cyclicality and that is why we are in New Providence and why we can survive boom-bust cycles.

Set on 600 oceanside acres on New Providence, the luxury resort community of Albany opened its doors in 2010 despite contending with the recession. Described as the epitome of island living, it is the collective vision of its founders Joe Lewis and private investment organisation Tavistock Group along with golfing greats Tiger Woods and Ernie Els. In your opinion how successful has the resort been over the last five years?

Very successful. The way I would measure that is, since the financial crisis we have probably done over $1 billion sales. We don’t spend any money on advertising, we have no debt. Great things are not advertised, things in this realm are viral. It’s one wealthy person telling another to check this out. Our definition of success is that we have 400 luxury properties to sell and just virally we have sold 200 of them.

Competition in Nassau’s hotel industry is increasing, with the relatively new local investment The Island House as a number of well-established international brands and all-inclusive hotels such as Sandals, and the Baha Mar hopefully opening within the next six to 12 months. In terms of the second home market, Nassau’s residential communities include Lyford Cay and Old Fort Bay. How would you describe the experience that you are trying to create at Albany?

The phrase luxury resort community is broad. You have luxury resorts, which are hotels that rent hotel rooms. Then in a private residential community, you are selling homes. In a luxury resort community we combined both concepts to create something very unique and special.

The real estate model has changed over the past 20 years due to what customers expect in a luxury development. Historically. a five star hotel in the Caribbean would have a beach, some rooms, a spa and an average gym. That’s what defined luxury in the Caribbean for a long time and there are examples of them all over the place. These were “little gems” that hopefully got their service right and they defined the luxury hotel market. But today the stakes are so much higher and the cost to create a location that is a luxury destination makes it very difficult. I don’t think anyone has seen anything like what we have done here. I have great admiration from the sidelines for a company like Apple, a company that has done great things but they are not sitting back saying “aren’t we great because of what we have done.” I think that they sit there everyday asking themselves “how do we get better”. I think that Albany is like that, our shareholders are some of the most successful people in the world and we all continually strive for excellence. Every day we have to get better, innovate, and find new and exciting ways to make our customers experience special and unique. My hope is one day we will look back and see that we have separated ourselves from the competition as I hope we are playing a different game!

Our goal is to become the Monaco of the Caribbean. It didn’t start out like that, it evolved there by listening to our customers. I could go back over the last five years and recall many instances where our customers asked for new additions to Albany. We put these ideas through a filter and if it made sense we do it, and that’s how Albany has evolved and that thinking has led us to develop a vision that far exceeds a place to go on holiday. The vision for a “live-work-play” environment has evolved and you start taking all of the attributes from question one and now we have a financial centre that is going to open with some of the world’s top companies, which are coming here to serve our customers. We have the some of the most affluent people in the world here and top luxury service providers want to be on their doorstep to take care of them. Now we are building a sports school with a boarding component and a day school targeted at top teenagers from around the World in their respective field. Lleyton Hewitt is going to run the tennis academy and Mitchell Spearman is going to run the golf academy. We are opening a medical centre and a recording studio.

All of this is punctuated by something we deeply care about which is architecture.

Architecture is subjective, much like art so we have hired a series of the world’s top architects to design prominent buildings within Albany. One of these feature architects is, Bjarke Ingels Group (BIG), and they are designing the Google headquarters, and the number two building in the World Trade Centre. They are a great company, they are young and they are using technology with architecture like no one has ever done before and they have designed Honeycomb and the next building that we are just about to break ground on. They have designed our recording studio, which will be iconic. Some of the top musicians in the world are already here and they are going to record here.

Just to be slightly provocative, Albany is 600 acres and Monaco is 400, so we are bigger. The difference is that not anyone can come in here, which makes it even more special. That’s why the people that congregate here like it, because they can be private.

In our interview with Minister Wilchombe, he told us that he is striving to diversify the country’s tourism product by developing the recession-proof sports tourism industry. Given Albany has an 18-hole Ernie Els-designed championship golf course and other top class sports and fitness facilities from a fitness centre to water sports, equestrian activities, tennis and boxing, a number of sporting stars have decided to call Albany home. How is Albany capitalising on this to facilitate sports tourism?

We have already done it. Two years ago we arranged the first ever premier league football match in the Bahamas, where Tottenham Hotspur played the Jamaican national team.

There’s a $12 million PGA-Tour sanctioned golf event coming here in six weeks called the Hero World Challenge. These are not small initiatives and it takes the combined resources of our shareholders and Albany and The Bahamas government to make these ideas become a reality.

Sports tourism is actually the scope of our Sports school. It is an example of education and sports tourism, so the next wave of top junior golfers and tennis players can come to school and live here for four years, and our hope is that they will go on to do great things and they will always want to call this home.

According to your website, Albany is strategically laid out to accommodate high-powered business trips and intimate meetings to precious hours of pure relaxation. In a similar way, you said in 2013 that Albany is“ more than a place to own a home”, with a financial center, hospital and recording studio being built. How effectively have you been able to attract business travellers to either visit or for full time residence?

We are attracting people that want to make Albany part of their life. That could be for One week, One month, three, six, nine or 12 months a year, and those people happen to be some of the biggest business people in the world. A by-product of them spending time here means they might want to have a business presence here and they might want to host meetings here. So it’s less us targeting business travellers, it’s more a by-product of our users, owners and patrons. We are not trying to drive hotel occupancy, we care about quality versus quantity because our business model isn’t predicated on renting rooms, that’s a by-product of what our core business, which really is developing this “live work play” environment.

A variety of real estate opportunities exist at Albany, from private villas and custom homes to beachfront estates and dramatic penthouses that overlook the mega-yacht marina. As you have previously said, these options reflect the fact that people like different flavours of ice cream. Expected to be completed in 2016, the new Honeycomb building - named for its unique design - will offer the ultimate luxury living with a variety of floor plans from two-bedroom residences to seven-bedroom penthouses, all with zero-entry pools overlooking the world-class marina and the panoramic views of the ocean. What other opportunities for investors are there in Albany?

We don’t like selling to someone who describes themselves as a pure investor, because that implies they are not interested in being a part of Albany. That’s like saying “I have some money to invest, I like what you are doing so I’m going to buy some shares in your company”. We are more interested in finding people that want to be a part of the Albany community, and a by-product of our responsibility when someone invests money in our lifestyle option is to try to create value for them. If you can accomplish both, that’s what we are interested in.

So I would say investment opportunities are first and foremost, driven by one’s desire to be a part of Albany, and what’s nice is that you can come and try Albany out before you buy because we have our luxury hotel where you can rent and you can rent many times before deciding to purchase. We have had a number of people rent multiple times before they decide they want to buy. What our customers love is they get to stay and use Albany before deciding to purchase. This is in stark contrast to the normal way of buying a home which is you get to see it for 30 minutes and make an offer, maybe you get to go back for another 30 minutes. What about if you could spend a week in that home, sleeping and using it? That is pretty cool, you will really have conviction behind whether you should be buying that place or not after living in it for a week. But most sales don’t work like that so my point is that get to test drive Albany before making a purchasing decision so the main motive has to be wanting to be here. We have done an excellent job of creating value for people through price appreciation of their properties - but that is more a by-product of executing against our daily goals. It is not the other way around and so Albany has turned out to be a fabulous investment for lots of people but not because we were trying to create a good investment; we were trying to build a great place and a by-product of creating a great place that is well run and financed properly, is you might make money through your property.

Who is your target market/what source markets?

We have a very simple philosophy: we welcome people at Albany who are nice families and can afford it.

And how do you want Albany to be perceived by them?

We want to be perceived as the Monaco of the Caribbean, as a place you want to be because you love being here, and you feel like you are in an international place.

Since inception, the Albany Resort has continued to expand. Can you explain to the readers of HBR your current expansion plans?

We are completing our financial centre and two new residence buildings, one is called Honeycomb with 34 units and then on the front end of the financial centre are six units and we call that part of the building the Lantern. So the way the financial centre works is actually two halves even though it looks like one building. The front is a pure residential area called Lantern and the back half of the building is the financial centre. Then there is Honeycomb, the sports academy and the music studio and we just released the next residential building which is going well and will probably break ground in March. That is 450,000 square feet under construction so that is keeping us busy for the next couple of years.

As you know every company needs to have a clear set of goals, but it is the vision of its leader that enables it to reach them. Given this report will be published early next year, where do you - as Managing Partner of Albany - see the resort in the next six months?

We will be finishing our winter season and hopefully it will have been a good one. We are a high growth business but it is very important to handle and manage that growth, so we have a cycle that has kind of developed. During the summer months we grow and expand, we bring in new people, ideas, technology, a lot of construction gets done and then on the operations side, winter is about executing. So in the next six months I hope we have executed all of the things that we have been putting in place this year. We have opened up some new restaurants, installed some new technology and we are constantly fine-tuning our offering. The golf tournament is going to be a big deal and that is the new thing for us to manage over the next six weeks. Our New Year’s Eve party is incredible, and so every year we are always pushing the envelope. So the next six months will be about executing a lot of things that we have put in place this summer and then throughout that winter period, we’ll formulate the goals for the next season and put those in place next summer and then execute, that’s the cycle.

To conclude the interview, as mentioned before, the readers of Harvard Business Review include many of the world’s most influential business and political leaders. What message would you like to send them about The Bahamas and also The Albany Resort?

Albany is one of a kind. I doubt it will be replicated in the next several decades. I think it is so unusual to be able to pull something like this off in a place like the Caribbean. We have invested close to $1 billion and we have no debt and because we have no debt it allows you to think and act differently.