Letter from... Grenada

Catherine Chetwynd reports on the Caribbean island's recent change in fortunes

Grenada's fortunes arguably hit their lowest after it was devastated by Hurricane Ivan in 2004 but, four years later, the Spice Island is seeing a rebirth, with a number of major investment projects. The most advanced are Mount Cinnamon Hotel, which opened for business on 1 March this year, and the re-opening of Port Louis as a high-end marina, two of four projects worth nearly US$600m and fronted by entrepreneur Peter de Savary.

'There had always been low-key tourism here but the spice trade had dropped off,' he said. 'The island is a democracy - there are two parties; it is politically stable and there are no social problems. It is where other Caribbean islands were 20 years ago. It is Grenada's time.'

Mount Cinnamon's accommodation is in 21 villas, which have been sold to private investors for between US$500,000 and US$995,000. All staff, from kitchen workers to operations manager, are locals.

More dramatic is the renovation of the derelict Port Louis, which was acquired by marine specialist Camper & Nicholsons for US$24m in December. Phase I has produced 50 serviced berths, with another 260 to follow. The marina village is part of the de Savary project and will be branded - Harrods and Sachs are front-runners. Town houses with up to six bedrooms will be built overlooking the lagoon.

A hotel will be built on adjacent Pandy Beach, with Nikki Beach Hotels & Resorts the most likely operator, and apartments will be built on the hilltop above the beach and run by the hotel.

'Over the years, investors have developed traditional hotel facilities, but now there is a trend towards residential tourism - villas and condominiums,' said Ronald Theodore, investment promotion manager for the Industrial Development Corporation (IDC). 'Peter de Savary was the pioneer and that awakened us to the other opportunities. He bought land from the Government, which granted him an incentive package, and we have granted similar packages to other projects of that magnitude,' said Theodore. These include developments at Levera, Bacolet Bay, Petit Trou, Grand Harbour in the Edgmont Area and a Four Seasons hotel at L'Ance aux Epines in the south-west of the island.

'For projects to receive support, they must be able to place villas into a pool as part of a hotel for at least 40 weeks of the year because Grenada has only 1,700 rooms, and we want to increase the island's room stock,' said Theodore. 'That will assist us in negotiating with airlines to come here.' The authorities will be undertaking a Carrying Capacity Study to assess the risk of over-development.

Concessions are not granted on the basis of job opportunities for locals, but he says the marina at Port Louis will provide a number of openings. 'There will be many spin-off jobs in auxiliary support services such as cleaning boats and rigging supply.'

Joseph Charter, the High Commissioner, is also positive about the outlook for Grenada and Grenadians. 'Grenada has become a vehicle for new investment and that will have an enormous effect on the economy. There will be a lot of jobs in construction and tourism industries, and I am optimistic that in yachting we will be doing substantially better than we have in the past. We have become a sought-after destination for high-end tourists,' he said.

'All the investments in the island mean Grenada is seen as a safe place to invest and visit.' There is, however, a risk that increased tourism, particularly yachting activity, may increase the risk of drugs trafficking. 'We do not have major drugs problems on the scale of some of the other islands, and I imagine it will put pressure on the immigration authorities to make sure there is no contraband activity,' said Charter.

But what do the locals think? A straw poll among Grenadians produced mostly positive responses, particularly concerning Port Louis. Bernard McPherson's view sums it up: 'De Savary has revolutionised the port and put money into Mount Cinnamon, and the investment will bring people here. That is good for the economy,' he said. However, one of his party felt that because tourists have more money than locals, prices would go up in supermarkets. 'We are seeing that already,' she said.

'The Government is very conscious that tourism could bring some negative by-products, and we hope that is not one of them,' said Joseph Charter.

Visitor figures already reflect Grenada's raised profile, with a total of 129,147 stay over arrivals in 2007, an increase of 8.84% over 2006.

Catherine Chetwynd is a freelance journalist specialising in business travel, conference, incentive and exhibition writing.