As I sat in the special meeting called by the board of directors of Almond and listened to the bleak announcement of its closure at the end of this month, I thought: “Here we go again.”
It was about 26 years ago that I had to make a similar announcement and it was the most difficult experience I have ever had to face.
When the decision was made to close Intel in 1986, I did not sleep for several days because I knew it meant that almost 1 000 employees would be out of work and several more thousands of people would feel the impact.
Small and large businesses would lose what was thought to be a reliable source of business as suppliers of materials and services. You thought of each staff member and how their families would be affected. You thought of their fears and how they would react to this terrible announcement.
Intel had positioned itself to be a leader in the rapidly expanding semi-conductor industry and had invested (in 1985 to 1986) over US$17 million in a new production line and warehouse to support growth of the Barbados operation. The industry had been growing at an average of ten per cent per year for the previous five years but then several new players entered the market and global production capacity increased by more than 15 per cent in 1986.
This meant that Intel was going to face new competition and there would be an over-capacity problem for the next few years. The result was that competitors started dumping products in the market and prices for some of the products made in Barbados dropped by more than 50 per cent!
There are many similarities between what happened with Intel and what is happening with Almond Resorts Inc. in Barbados.
External factors contributed significantly to the decline and subsequent failure of Almond Beach Village as reductions in occupancy and daily rates led to steady loss of revenues. The quality of the product also declined as there were no profits to finance the necessary refurbishing of the hotel.
The economic downturn, which started in 2008, came shortly after the expansion of the Almond Brand both locally and in St Lucia and the investments in new hotels were being made in anticipation of continued economic expansion but the global crisis caused a major decline in arrivals and in overall business.
The closure of Almond Beach Village will have an impact on the Barbados economy that is about the same as when Intel Barbados closed 25 years ago.
The Barbados manufacturing sector never recovered from the loss of Intel.
We need to make sure we do not allow the closure of Almond Village to throw our tourism industry into a spiralling decline.
The industry can be seriously impacted by Almond’s closure and everything should be done to ensure that the new owners will reposition this important property back into the tourism pool as soon as possible.
Almond is on one of the largest sections of West Coast beachfront property that was first developed by Government and later redeveloped by BS&T Co. Ltd as the largest all-inclusive hotel in Barbados. The product was successful and quickly became a deal-maker when Barbados was negotiating contracts with airlines or trying to open a new market to help the tourism industry to grow.
This is the kind of strategic tourism development that Government must do all in its power to keep in production.
We must act quickly to get the right partnership together and to ensure that this strategic tourism asset is brought back into the active stock of rooms as soon as possible. It is more expensive and difficult to build new properties (as we are experiencing with the Four Seasons project) than to maintain existing properties.
It is also essential to the industry that Almond not be turned into condominium units like so many recent developments on the West Coast. Barbados needs to grow its inventory of rooms to maintain a vibrant industry and Government must make sure that the new owners of Almond will be acting in the strategic interest of Barbados rather than pandering to real estate speculators.
Our tourism industry and the people will be expecting to see the sensible thing being done so that jobs are not lost and the economy can start growing again.
