Underwater Possibilities, Lodging Magazine and Reef Worlds

Lodging Magazines May 22, 2013

By Diedre Wengen

Most beachfront resorts in the Caribbean have an impressive array of entertainment and leisure offerings on land, but when Mike Wallace, director of development at Reef Worlds, looks out to the sea, he sees untapped potential.

“For the last 40 years, resorts have done a very good job of maximizing every last square inch of land-based property that they have, but they’ve all come out of the last cycle saying ‘what’s next?’” he says. “They always kind of considered that the ocean would take care of itself. But resorts are waking up to the fact that they have acres of property that they can monetize and incentivize.”

Reef Worlds creates underwater wildlife attractions for private clients and hospitality properties. The company is comprised of marine biologists, expert divers, tourism experts, and Hollywood set designers who have worked on blockbuster films such as Lord of the Rings and Avatar. Wallace explains that Reef Worlds is in the process of developing partnerships with several Caribbean resort companies—think Sandals, AMResorts, and Club Med—to build out underwater reef attractions that not only benefit the environment but also have the potential to bring in an entire new revenue stream for hotels. The company is investing $4.5 million to help partner resorts handle up-front building costs.

In 2005 and 2010, the Caribbean suffered from mass coral bleaching events that wiped out a large chunk of near-shore reef systems. Major resort growth in the Caribbean was part of the problem as waste runoff, coastal development, and sedimentation due to construction put pressure on the reefs. “The ocean is like a garden,” says Wallace. “You have to till it, you have to take care of it. When you build that much, the in-shore reef is the first to go. If you’ve lost a big reef structure, you have to replace it. That’s what we’re trying to do bit by bit.”

To create these new systems, Reef Worlds collects orphan coral from off shore and uses bio-integration to attach the corals to newly built concrete structures, which the company places 20 to 30 feet off shore. The structures are designed with influences from ancient civilizations and are engineered to become habitats for sea life. And while Wallace doesn’t deny the ecological benefits of constructing new, thriving coral reefs, he says that resorts should focus on what these attractions can do for their bottom lines.

Creating artificial reefs is not an entirely new phenomenon, but Reef Worlds is hoping to draw on the experience of its Hollywood team to help bring a “wow factor” unlike some of the more simplistic reef balls that have been implemented near tourism hot spots. “Diving on a reef ball is about as much fun as poking yourself in the eye with a butter knife,” says Wallace. “There’s nothing there.”

Instead, Wallace cites the example of English artist Jason deCaires Taylor, whose Underwater Museum project, located off the coast of Cancun, has received endless praise and accolades since it was installed in 2009. The project brings in millions of dollars in tourism spend each year.

Hotel partners that do take advantage of Reef Worlds’ up-front investment will have to share per-person resort revenue with the company. Wallace says that the model will ask for approximately $5 to $10 per person, with a five-year commitment from the resort. After the five years, all revenue will revert back to the property. But Wallace explains that Reef Worlds has no interest in getting involved with how resorts monetize the sites and will not dictate what resorts charge for diving and scuba adventures or other underwater revenue opportunities that are tied to the reefs.

And since the reefs are built near land, resorts will have a higher turnaround for scuba and snorkeling expeditions. The time and transportation costs that some resorts spend on sending divers miles out to sea can be greatly minimized since the attractions will be accessible from the beach. “People’s time at a resort is very limited,” says Wallace. “If they can literally walk down the beach to the dive site, get trained, and get out again in half the time, resorts can increase dive sales by 100 to 200 percent.”

Resorts that partner with Reef Worlds will also have a new and high-impact attraction to market. The company provides resorts with high-quality photos and videos so the properties can build out glossy PR campaigns. But Wallace says it is the “intangibles” that make an opportunity like this extremely exciting for hotels. If tourists begin to dive down to these sites and start posting photos on social media such as Twitter and Facebook, generating a big buzz about the attraction and bringing in new visitors become real possibilities.

Reef Worlds is currently in detailed talks with three of the top resort chains in the Caribbean and hopes to have its first contract signed by August of this year and its first sites open by early 2014.

“This is instant tourism,” says Wallace. “From the day we’re finished placing the reef, it is open for business and tourism happens. We’re hoping for a visceral punch in the gut. We’re hoping someone will hit the water and go ‘Oh my gosh, this is amazing!’”