A five-star international hotel group is on board to develop the “key tourism asset” of the long-closed Ariel Sands property, with opening expected in 2025.

The House of Assembly heard that Kempinski Hotels is set to operate the 131-key hotel on the 13.8-acre site.

Kim Swan, the junior tourism minister, told the House that Bermudian-registered Ariel Sands was “a joint venture between Michael Douglas, Hollywood actor, and JTRE Holding, founded by Peter Korbacka”, a European tycoon.

“The resort will be operated by the international operator Kempinski hotel group,” Mr Swan added.

He said JTRE was intent on turning Ariel Sands on the South Shore into a top-flight resort with 21 private five-star villas, 33 hotel suites and 30 condo hotel suites, with pools and pickleball courts.

He said “success breeds success” in hotel development as two investment orders for resorts were approved in the House of Assembly, boosting Aerial Sands as well and the Bermudiana Beach Resort in Warwick.

Mr Swan said the boost to the island from the two hotels could ultimately attract investors for other properties, such as Lantana and Sonesta Beach

Construction at Aerial Sands is expected to be done by late 2025, with $12 million to go into the acquisition of land, $108 million projected for construction and total costs expected to come in at $155 million.

Wayne Caines, of the Progressive Labour Party, said a renaissance was in store for the island’s tourism, with new hotels coming online, while Vance Campbell, the Cabinet Office minister responsible for the Department of Planning, said talks had been going on with JTRE over the past year.

Mr Campbell said Ariel Sands was established by the Dill family in the early 1950s as one of the island’s first tourist cottage colonies until its closure in 2008.

The property is sited “immediately above a picturesque beach with unobstructed views of Bermuda’s famed South Shore waters”.

To prompt the development, the developer will get 15 years of payroll tax relief contingent on management training for Bermudians, and a ten-year land tax break from year six to year 15 after opening.

Ariel Sands proposes 60 per cent Bermudian staff upon opening in 2025, going up to 70 per cent with training.

Bermudiana Beach Resort, the subject of the second order, initially received an order covering three years of construction in February 2019.

The project was set back two years during the Covid-19 pandemic and ran out of time.

Under the new order, Mr Swan said, the developer would get a 15-year break on customs duties on furnishing and equipment.

The order grants full exemption for hotel occupancy tax for 15 years, plus a 15-year break from the employer’s share of payroll tax and a ten-year exemption from land tax commencing in year six after the hotel’s opening.

The land tax break requires 70 per cent Bermudian staffing by year six, while the payroll tax sweetener requires management training for Bermudians.

The resort will have 94 condos for sale and 110 hotel keys for rental. Development includes eight elevator towers, a pool and poolside amenities, and a new building for reception and hotel offices.

Mr Caines told the House that at present Bermuda had more than 1,800 hotel rooms, compared with 21,000 in Jamaica and 7,000 in Cayman.

Mr Caines noted that visitors staying on land spent six times more on the island than cruise guests, and said if the island’s string of hotel projects came to fruition, the inventory could reach 2,500 rooms by 2026.

“The Bermuda Tourism Authority is excited about these two orders that will be passed in the House today. It means a step in the right direction for tourism.”

Lieutenant-Colonel David Burch, the public works minister, spoke of the “chequered history” of the Bermudiana going back to the unsuccessful low-income housing first built there.

Colonel Burch said 94 people had been working at the site for more than a year: 66 Bermudians, five spouses of Bermudians and 23 overseas workers, with construction expected to finish by next July 1.

He said Hilton, owners of the development, would then require two months to test-run the hotel before formally opening it.