est. 2007

Barbados Underground

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Prime Minister Urges Financial Institutions to Lend Money to the Hospitality Sector

Submitted by Due Diligence Thanks David for the link to the PM’s testimonial for Ocean Two at  http://bajan.files.wordpress.com/2013/08/untitled1.mp3. Not being familiar with the Ocean Two property, I checked it out at TripAdvisor which confirms the PMs glowing report. It is great to read. It is a bit confusing why the PM would single out one…

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Submitted by Due Diligence
Prime Minister Fruendel Stuart
Prime Minister Fruendel Stuart

Thanks David for the link to the PM’s testimonial for Ocean Two at  http://bajan.files.wordpress.com/2013/08/untitled1.mp3. Not being familiar with the Ocean Two property, I checked it out at TripAdvisor which confirms the PMs glowing report. It is great to read.

It is a bit confusing why the PM would single out one property for endorsement; but there has to be a reason. The PM’s remarks about its secrets of success being underpinned by “serious Investment” are obvious. His comments that “The splendour of the surroundings speak with moving eloquence of the commitment of the owners of this property to investment in the property” are indeed eloquent.

One should bear in mind that the amount of investment required for a property of this size is not “chicken feed”. If Peter DeFreitas’ motivation to make such a significant investment is to support the Barbados tourism industry, he is to be commended. If his motivation is to earn a Return on Investment, only he and his lawyers, accountants and bankers know if he has been successful.

The PM’s comments about the issue of the commercial banks to take investment in the hotel sector seriously is a bit naive and threatening.  He says they are going to have serious conversations with the banks about taking a more long term view, i.e. pressure the banks to loan to the tourist industry now. The objective of the banks is not to support the tourism industry or the forex reserves. The object of the banks is to earn an ROI for their shareholders. They are in the business of making money by making loans; and they make risk/reward analyses in coming to decisions on where to invest/loan their depositor’s money and their shareholder’s capital.

Recent reports have talked about the banks’ delinquent or non-performing loans being concentrated in loans to the tourism industry – so obviously that is a risky business – the number of failed hotels attests to that. In order to make a loan to a hotel owner, the banks have to ensure the owner has a serious equity interest in the property. a solid business plan to support its loan request, and a reliable secondary source of repayment of their loans if the primary source of repayment (the property) fails to generate the funds to service and repay the the loans. If, in its judgement, the bank is satisfied the application meets its criteria, it will make the loan.

Presumably Mr. DeFreitas has a history of successful and profitable operations in the chicken business, made a serious equity investment in the Ocean Two property, and provided his bank with solid business plan and a reliable secondary source of repayment; and his bank helped him finance the property.

If the Prime Minister is going to have serious conversations about taking long term views about the tourism industry; he should be talking first to the guys with serious money to invest as equity; Sir Charles, Bizzy, Kyffin, Bjorn, Mark or Elias about making serious equity investments in the industry, and letting them go to the banks to apply for their debt financing needs.  If, in its judgement, their bank is satisfied the application meets its criteria, it will make the loan.

18 responses to “Prime Minister Urges Financial Institutions to Lend Money to the Hospitality Sector”

  1. bullets!!!! Avatar
    bullets!!!!

    I wonduh if them doan tink b4 DEM open duh mout, ya mean tourism down,fumble tink de banks gine lend hotels money. Stupesssss. Piss in ma pocket do!

  2. David Avatar
    David

    Agree with Due Diligence that it will make for interesting observation to see how the PM and government try to persuade financial institutions to led to the hotel sector.

  3. PLANTATION DEEDS FROM 1926-2013 AND SEE MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS Avatar
    PLANTATION DEEDS FROM 1926-2013 AND SEE MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS

    LISTEN DONT GO TO NO BANK FOR NO FRAUD LOAN , TELL THE PM KISS YOUR ASS , DONT GET INVOLVED IN THE BULL SHE-IT, ALL GO TO THE BEACH AND LEAVE THEM, LET UWI DRY UP AND SEE WHAT THEY GET , NEXT ELECTION WE WILL MAKE YOU REMEMBER THE STRESS THESE CROOKS PUT ON YOU AND YOUR FAMILY SO WHITE PEOPLE WITH MONEY CAN COME TO BARBADOS FOR LESS, LESS VAT, LESS TAXES,
    TOURIST COME TO YOUR HOME AND YOU HAVE TO PAY FOR THEM ,,,, LET THEM ALSO STAY HOME , TELL THE WORLD BANK KISS YOUR TAIL,
    VERY SICK OF YOU SO CALLED SELLOUT GOVERNMENTS AND BANKS TELL YOU SUITED SLAVES WHAT TO DO ,,
    LET THEM ALL STAY UP NORTH AND FREEZE AND PAY OPEC FOR OVER PRICE OIL.

  4. followtheroad.net Avatar
    followtheroad.net

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    articles for your blog in exchange for a link back to mine.
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  5. Roverp Avatar
    Roverp

    With Junk Status around many investors including locals would be cautious in investing especially in an industry that has had poor ROI for many. Tourism in Barbados needs a major shakeup. It also needs to be measured better with much more tools of measurement. Much of what we do in the industry is not research driven but a fair amount of assuming goes on. The Marketing to a large extent is poor with only a few businesses doing it well. We need to find out some vital questions of the industry: 1. Is the industry of real benefit to the country? 2. What are the measurements to say yes or no and are these the right type of measurements? What is government doing right and doing wrong in maintaining the industry? Is the industry viable for all concerned? What do we need to do to have a viable sustainable industry for all concerned? Are we measuring sustainability right? I look forward to some real answers.

  6. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    “The object of the banks is to earn an ROI for their investors. They are in the business of making money by making loans. They make risk/reward analyses in coming to decisions on where to invest/loan their depositors money and their shareholder’s capital.” – Taken from the above submitted article.

    The above excerpt is filled with so many egregious fallacies and erroneous assumptions, that it is very distressing, to say the least, that in this day and age of greater philosophical enlightenment such bunkum can be written by anyone.

    Any how in responding to some of those same fallacies and assumptions, the truth must be told that these particular, main monetary authorities, commercial banks, credit unions, finance houses and all other financial institutions in Barbados are primarily in business to carry out the oligarchic political exploitation by ideological ( western finance, etc) psychological (money lent) financial means (the capacity of many to use money to represent some of remunerations of the client transferors ) of the broad masses and middle classes in Barbados.

    And such is not only limited to Barbados but includes any other country where those kinds of institutions carry out such very mindless sick policies via “agreements” with clients consistent with their primary mission.

    For, a serious analysis of money financial affairs in Barbados, or any other place in this world where money is used by persons as a physical commodity, as oft times defined by the PDC, would show that MONEY CANNOT BE USED TO MAKE MONEY, NOR CAN IT BE USED TO COST MONEY.

    For, there are only four forms of remunerations: incomes; payments; unearned payments; and transfers, that are got by the relevant individuals, businesses, and other entities anywhere, and that themselves can be measured and represented by money itself.

    Note that remunerations CANNOT represent money or measure money, and this is so primarily because remunerations are psychological, ethereal and nominal, whereas money is material, real and actual.

    Note too that no form of remuneration CAN PRECEDE or BRING ABOUT money (pity the foolish called fractional reserve lending/money creation in presumably all financial systems of this world – no wonder there were and still are the financial crises in the USA, Eurozone, etc and that have been helping to bring about untold human suffering in those places).

    Nevertheless, each form of remuneration MUST be market based, MUST come through the cost of/ the use of money by the relevant individuals, businesses and other entities, and MUST involve the use of other commodities and services, earlier, simultaneously, or later, at the time the money is used in the same markets.

    Thus, money CANNOT be made to make money, or to cost money whenever these fundamental conditions exist in Barbados or in any given places.

    However, the use of money by persons MUST always involve the cost to remunerations of the others, for money itself to be given any inter-human psycho-political financial significance.

    Thus, whenever core financial institutions in Barbados and elsewhere falsely and fictitiously ( so-called) lend money (local money) to one another, and falsely fictitiously ( so-called) lend money (local money) to particular individuals, businesses and others – and which is money itself that already belong to the people of Barbados, or any other territory, or its dominion, if so, it comes at NO COST NO COST ABSOLUTELY (cost measured in money terms) to the remunerations of these particular financial institutions operating in Barbados or elsewhere.

    Indeed, these remunerations – when measured on a yearly basis – are really so minute in contrast to the vast number of portions of remunerations ( which are only measured with money though) that the relevant individuals, businesses and others deposit on a yearly basis in some financial institutions, and in contrast to the vast number of costs to the remunerations of some of the same said entities when they have to make these so-called loan deposits ( measured only in money terms) on a yearly basis too, altogether out of the same damn amount of money that is not only recycled in and out of the core financial institutions so many times ( at least some of it) but that is also circulated within the wider political economy and services industry sectors of this country countless times by the relevant people.

    Well, the fact having been that this type of false money transferring of money into and out of the relevant financial institutions was NOT designed by the engineers of this baleful ungodly western financial system to make it be that the remunerations of the core financial institutions are to be costed, when this money is falsely fictitiously lent, must mean that this same sick western financial system has been designed – originally and thereafter – and essentially maintained too – to cost tremendously the remunerations of those persons and businesses who – when operating in the non-financial private and personal sectors of this country; when falsely fictitiously lent their own money (it is worse when cheques are involved in this spurious deceptive money lending process ) – and when falsely fictitiously having “agreed” to repay ‘this money’ – will be seen to be repeatedly bearing this tremendous COST ( individually and otherwise) of having to hand over portions of their remunerations to so-called commercial financial institutions, just in order to have the uses of their own money, owing to these wicked oligarchies and their supporters maintaining this very spurious wicked money lending scheme in Barbados and beyond.

    Finally, by the PDC long ago applying critical thought to such political financial processes – it has been found by us that these financial institutions, and even some of the masses and middle classes in this country and presumably other places, have been going as far as to be substantially removing the inter-human psycho-political financial significance of money as a special commodity out of numerous other commodities, in the market place, and to have been therefore primarily using these money methods and policies as a means of oligarchic political exploitation and control by ideological psychological financial means of the broad masses and middle classes of this country and other countries.

    PDC

  7. Roverp Avatar
    Roverp

    BTA restructuring pressing ahead 8/27/2013
    The restructuring of the Barbados Tourism Authority (BTA) is at an advanced stage.
    That is the word from Prime Minister Freundel Stuart, who made the disclosure while speaking to the media last Friday, following a tour of Ocean Two Resort and Residences. He said that Cabinet had already approved the plan to restructure the Tourism Authority, separating the marketing arm from the product development aspect of the entity and this, he further noted, will see the setting up of two entities.

    “Now the rationale for that, according to the consultants who were engaged to deal with it, is that product development was lagging too far behind. If you are marketing, you have to be marketing something and if sufficient attention is not paid to the product end of things, the time is bound to come when your marketing becomes a dialogue of the deaf; because what you’re saying does not have any attraction for the people to whom you are saying it, because
    you’re not saying anything new,” he explained.

    Giving an update on the initiative, Stuart said that they are in the process of trying to operationalise the separation of the two arms, looking particularly at the manpower that will be needed. To that end, he explained that he expects the product development arm of the agency to start to take shape over the next few months.

    Prime Minister Stuart maintained that while his Government was moving in this direction, there is no intention to sacrifice the country’s tourism marketing efforts. He made the point as he noted that there are many markets waiting to be exploited by Barbados, and Government will ensure that adequate resources are put at the disposal of the BTA to get the marketing effort “on a serious track”.

    “We are studying our markets, of course the United Kingdom is still a principal source market and we are not about to let that go. The United States is still our second largest source market, we cannot let that go; CARICOM is our third largest source market and then of course Canada. We are trying to get into South America as well, [and] I should be paying a visit to Panama sometime to talk some of these issues through,” he indicated. (JRT)

  8. Roverp Avatar
    Roverp

    http://www.barbadosadvocate.com/newsitem.asp?more=local&NewsID=32078

  9. David Avatar
    David

    @Roverp

    Surprised you did not mention your pet peace, the forex leaking which takes place in this industry.

  10. Roverp Avatar
    Roverp

    Is the BTA going to have the usual TOP HEAVY STRUCTURE associated with government restructuring?

  11. David Avatar
    David

    It was interesting to listen to head of the Family Planning Association George Griffith lamenting that the structure of the Child Care Board was too civil service in structure and culture and as a result not nimble enough to do the job.

  12. For your information Avatar
    For your information

    @ David
    As a matter of information Mr George Griffith was a Chairman of the Child Care Board during the BlP administration before handing to Joey Harper .

  13. WestingMouse Avatar
    WestingMouse

    David

    Isn’t Ocean 2 a condo project which failed to sell and was then converted into a traditional hotel?

  14. David Avatar
    David

    So we understand and BU and Adrian must feel vindicated because being critical of the condo thrust by Barney Lynch.

  15. Nostradamus Avatar
    Nostradamus

    Speaking of Condos. Wasn’t one of Barney’s “condo “thrusts” Sapphire Beach, St. Lawrence gap? Built on the site of the old convention centre and a joint venture between Government’s Hotel and Resorts Limited, Consumers’ Guarantee Insurance (CGI) and Jada Development. Wonder how many have been sold. Was it a profitable joint venture for Hotel & Resorts Limited and by extension the taxpayers?
    http://www.terracaribbean.com/barbados/News-and-Media/Press-Releases/Sapphire+Condos+Open.html

    Wonder what kind of joint venture it was?

  16. WestingMouse Avatar
    WestingMouse

    Nostradamus

    JADA would not be going into a joint venture with GOB if Hotels & Resorts Limited was to make a profit. They would have it structured so H&R put up the land, the Government of Barbados was saddled with all the debt and all the risk and JADA would make all the profit and if eagle eyes are not about they might try to take a few millions from H&R for good measure.

  17. Roverp Avatar
    Roverp

    Stuart said that they are in the process of trying to operationalise the separation of the two arms, looking particularly at the manpower that will be needed…Simply said they looking for DEM yardfowls

  18. Archie Stiver Avatar
    Archie Stiver

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