COMMENTARY
Ko Olina plan not merely for a casino but a resort
By Jim Boersma
Jack Hoag's article in last week's Sunday Advertiser comparing Sun International's proposal for Ko Olina to Chris Hemmeter's failed casino project in New Orleans was very interesting. However, his conclusion that the Sun project would fail just as Hemmeter's did does not compute.
Associated Press library photo • 1998
First of all, Hemmeter proposed and eventually built a large Las Vegas-style casino, with some hotel rooms attached.
Sun International's Atlantis resort in the Bahamas contains a casino, but it sees gambling as an amenity, not the main focus of the locale.
Sun is proposing a resort at Ko Olina that would include more than 1,000 rooms, one of the world's largest marine habitats (aquarium), water attractions, a Discovery Camp for children, retail and entertainment facilities and, yes, a casino that would take up about 2 percent of the resort's footpad.
With Hemmeter, it was all about gambling.
Sun, on the other hand, creates resorts that complement their locations. Paradise Island in the Bahamas had a casino in 1994, but was nevertheless in bankruptcy when Sun acquired it. Sun's philosophy was that visitors would not come to the Bahamas for gambling, but rather to experience the wonders of that island nation.
As a result, when Sun developed that resort, less than 3 percent of the capital expenditures were applied to the casino. Over time, the profits from the casino were used to continue developing other features at the resort which led to an increase in occupancy from 62 percent to 83 percent and a 180 percent increase in average room rates.
The prime minister of the Bahamas has said that Sun's investment resurrected his country's economy.
The facts bear him out.
Sun invested $1.1 billion in Atlantis and employs 5,700 Bahamians at the resort, with another 6,000 employed indirectly supporting the resort. Moreover, Atlantis has been the catalyst for a further $1 billion investment by other businesses in the past eight years.
Occupancy for competitive hotels in the Bahamas has increased from 52 percent to 70 percent, and average room rates have grown by 47 percent as tourism visitor counts have grown by 31 percent. Airlift to the Bahamas has increased by about 20 percent.
Unemployment has dropped from 11.5 percent to 7 percent. Wages have seen a 70 percent increase, and crime rates have fallen as more people become employed.
Even a straight gambling comparison to Hemmeter would be wrong. When entering any of Atlantis' several lobbies, guests have no idea that there is a casino on the premises. There are no signs, no sounds and no slots in sight.
Even when guests locate the casino, they find it mostly empty during daylight hours. That's because, unlike Las Vegas or Atlantic City, Atlantis is a resort.
Guests are out during the day, enjoying the beach, golf and other outdoor activities. At night, to be certain, the casino attracts adult guests. But even then, revenues from food and beverage exceed casino revenues. At the Atlantis, gambling is just another entertainment amenity, not the economic engine of the resort.
In Hawai'i, Sun would create a similar resort.
In addition to all mentioned above, they have promised a minimum of 5,000 new full-time local jobs, and another 9,000 to 10,000 indirect jobs; a $6 million job-training program aimed at unemployed local residents; a $100 million up-front licensing fee; a $15 million to $20 million marketing budget that would increase visibility for Hawai'i around the world; and payment of up to $85 million a year in local taxes.
They are confident of achieving these results and would agree to a sunset clause in legislation which would shut down the casino after some time if is shown that they haven't delivered or that Hawai'i has suffered as a result of this one casino.
That's not what Chris Hemmeter proposed.
Jim Boersma is a public relations executive who has been working with Sun International.
