When Government completes the acquisition of the former Almond Beach Village and Silver Sands Resort, it will become by far the single largest hotel owner in Barbados. In fact, it will own more than twice the number of rooms any private sector company does.
Hilton (354), Almond Beach Village (396), Silver Sands (130), Blue Horizon (120), including almost 50 abandoned rooms that were never upgraded under the GEMS project, PomMarine (21).
Still to be explained is whether the purchase of Casuarina (280) will be funded by Sandals companies, using their own money. Even without Casuarina, already that’s over 1 000 rooms! This number could climb to over 1 500 after Almond Beach Village is demolished and re-built, all acquired and/or built with subsidized taxpayer monies.
Only time will tell if it is either desirable or healthy for any government to own more than one in five of the entire hotel room stock in a tourism-dependent nation. I cannot think of a similar precedent in any other Caribbean country and if our policymakers are suggesting “government should consider owning more hotels”, can they point to this model working anywhere else?
The probability exists that it will dramatically change how any future hotel investment is made in this country, as clearly the private sector does not have the advantage of access to, as the Minister of Finance has frequently repeated since August of this year, “low-cost financing from the People’s Republic of China”.
And while other ministers may give the impression that the exceptional terms granted to the Sandals companies are also available to other all-inclusive hotel operators, if the commercially driven private partners cannot borrow at the same low cost rates, then it really makes an absolute nonsense of that statement.
Will it echo a repeat of the ill-fated GEMS (Hotels and Resorts Ltd) project, where Government-owned properties could consistently punch above their weight, as they really don’t have to operate in a truly commercial environment? It makes me wonder if the administration is taking the best advice available, especially when I read verbatim quotes like, “It is necessary when the loss of major plant like Almond allowed us to lose just under 900 rooms at one spot”. Informed decisions can only be made based on factual knowledge.
Much has been discussed about the extraordinary concessions granted to the Sandals companies and the effect they will have on our remaining private sector tourism industry overall. One immediate consequence is that it has enabled the company to position Sandals Casuarina at the lowest price of any property they operate in the entire Caribbean, with the single exception of the 52-room Carlyle Inn.
Using a benchmark example date of April 22, 2014, for a seven-night stay, minimum grade double-room (two people) at the lowest bookable rate, this is how they compare:
St Lucia – Grande US$656, Halcyon US$503, Regency La Toc US$596; Bahamas – Emerald Bay US$718, Royal Bahamian US$762; Antigua – US$607; Grenada – US$655; Jamaica – Grande Riviera US$450, Montego Bay US$549, Negril US$553, Royal Caribbean US$540, Royal Plantation US$724 and Whitehouse US$676.
For the same period, Sandals Casuarina is only US$393 per night, which includes unlimited premium drinks, gourmet dining, scuba, watersports, round trip airport transfers, all taxes and gratuities. Exactly what the term “all taxes” relates to, some may question. Highlighting rack rates are, in fairness, only part of the equation, as a substantial proportion of Sandals turnover would be generated by tour operators and travel agents. However, published room rates generally determine wholesale prices, obviously at a discounted level.
• Adrian Loveridge is a hotelier of four decades’ standing.
