Government getting out of hotels
Government’s days in the hotel business may be numbered, with Minister of Tourism Richard Sealy saying it should not have been involved in the first place.
In delivering his report on the tourism industry’s performance for 2016 and projections for 2017, Sealy assured the Democratic Labour Party (DLP) administration’s involvement in hotel projects, including the Sam Lord’s Castle development, would be no replica of the debacle which engulfed Hotels and Resorts Limited (HRL) years ago when it racked up millions of dollars in debt.
He made the pledge today as he announced the sale of Time Out at the Gap – one of the former Gems of Barbados properties – to the Bernie Weatherhead-led Sun Group for $7.5 million.
In 2010 it was revealed that the Government-owned controversial Gems project, managed by HRL, had gone bankrupt after accumulating debts of about $229 million.
Another Gems property, the Savannah Hotel, has since been leased to the Sun Group, which is also operating the Almond Beach Village property in St Peter under a similar lease arrangement.
In the case of the Sam Lord’s redevelopment project, Government has secured a $240 million loan from the Export-Import Bank of China at an annual interest rate of 2.5 per cent for that project to host a Wyndham Grand Resort.
“I certainly want to give the assurance that Sam Lord’s Castle will be no HRL 2.0. I well recall that whole debacle,” Sealy said, while also recalling Government’s involvement in the Almond Beach Village Resort operations in late 2013.
“We reluctantly got involved [in Almond Beach Village Resort]. . . and far from loosing money we made money. And Sam Lord’s Castle likewise, the special purpose vehicle is about the Government facilitating getting this project going. We look forward to the Wyndham people or someone else, a hospitality investment company, coming along and taking us out, and that is why the special purpose vehicle we are setting up has to be done properly,” Sealy told the media and tourism industry officials at a news conference at the Lloyd Erskine Sandiford Centre this morning.
“The idea again is Government just facilitating the process and eventually coming out. We don’t want to get in the business of running hotels. That is not Government’s business . . . the Government is getting out of something it should not have been a part of in the first place.”
As for the other Gems of Barbados property, Blue Horizon, Sealy said Government was currently in discussion with “a private sector interest” to take over that operation. However, he said whatever decision was taken the interest of the roughly two-dozen workers and their families would “have to be considered”.
“We are going to be conscientious how we deal with that and we are going to phase out of the business of hotels,” Sealy emphasized, adding that he intended to undertake some redevelopment of the Savannah Hotel in order to make it “more attractive to investment”.
In his presentation entitled, Tourism Expansion for Job Creation and the March to Full Employment, the minister said tourism would create 14,000 jobs by 2021, helping the country achieve full employment.