Harrah’s Entertainment and Starwood Hotels & Resorts Worldwide have announced plans to develop a $1.6 billion destination resort in the Bahamas in conjunction with Baha Mar Resorts. The vast development will feature six hotels, the largest casino in the Caribbean and a championship golf course. Promoters are billing the so-called Baha Mar development as a “unique resort metropolis” given its urban scale and lazy tropical setting.

“The three partners in the ambitious venture share a determination to see that international guests are pleasantly overwhelmed by their experience at Baha Mar,” says Gary Loveman, chief executive officer and president of Harrah’s Entertainment. “We believe this integrated resort represents an auspicious international debut for the Caesars brand, and offers some insight into the sort of high-profile gaming-entertainment projects that we plan to pursue in promising global markets in coming years.”

Steve Heyer, chief executive officer at White Plains, N.Y.-based Starwood, calls the Baha Mar project “one-of-a-kind,” adding that it will “dramatically accelerate” the expansion of other Starwood brands in the Caribbean.

By all standards, this is a massive project. From a 55-foot high circular waterfall to the largest freestanding spa facility in the Caribbean, the Baha Mar represents one of the most expensive and ambitious forays into the region’s hybrid hotel and gaming industry. Even Baha Mar’s total room count — 3,550 — would make it the largest in the Caribbean.

Construction will begin in 2007. The project is scheduled for completion by 2010, though future phases are already being planned. It’s unclear how Mother Nature will take to the project, which could delay the construction: Nassau sits astride an active hurricane corridor.

Regardless of how future storms could impact the development, the Bahamas have recently experienced a boom in tourism fed by a strong cruise ship and air travel business.

“The partnership marks a significant occasion for the islands of the Bahamas,” says Obie Wilchcombe, Bahamas’ tourism minister. “The planned revitalization of the Cable beach area and development of Baha Mar will only further establish the Bahamas as the premier island destination for vacationers and business travelers alike.”