Taking a Closer Look at Government’s Decision to Invest in Hotel Plant

Adrian Loveridge - Hotelier

Adrian Loveridge – Hotelier

When Government completes the acquisition of the former Almond Beach Village and Silver Sands Resort, it will become the single largest hotel owner on Barbados by far. In fact owning more than double the number of rooms than any private sector company does. Hilton (354), Almond Beach Village (ABV) (396), Silver Sands (130), Blue Horizon (120) including almost 50 abandoned rooms that were never upgraded under the GEMS project,Hotel 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 when ABV is demolished and rebuilt. All acquired and/or built with subsidised 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 the 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 also concerns me 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 22 April 2014 for a 7 night stay, minimum grade double room (two persons) 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.

Quite what ‘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.

29 thoughts on “Taking a Closer Look at Government’s Decision to Invest in Hotel Plant

  1. No mention of Barbados of course:

    Have it all without the hassle: Best Caribbean all-inclusive resorts for 2013

    By Jordan SimonNovember 21, 2013 3:51 PM

    (Photo: Courtesy of Tamarijn Aruba)
    Ever since Club Med promised the “antidote to civilization,” all-inclusive resorts have increasingly blanketed the Caribbean island-scapes. Once cookie-cutter, they’ve increasingly diversified in a battle for tourist dollars. Today they come in every conceivable style and price range, as wonderfully varied as the Caribbean itself. Some cater to family fun, while others put the sin in scintillating for couples. One thing hasn’t changed: no hassles. Pay one fixed price for all you can eat, drink, and do… then leave your wallet—and worries—at home. Small wonder so many travelers swear by them.Best Beach: Tamarijn ArubaDruif/Manchebo Beach, ArubaAruba is famed for its champagne-hued beaches, rock formations, sizzling nightlife and whipping winds that bend the divi divi trees at a 90-degree angle. All rooms at the Tamarijn Aruba look out on Druif Beach, which opens into the wide grin of Manchebo Beach fronting sister resort Divi Aruba. Guests at the quieter Tamarijn enjoy all the Divi’s facilities: two resorts for the price of one, including nine restaurants, seven bars, three pools, a 9-hole golf course and the nearby Alhambra Casino. The resorts take advantage of that long stretch of beach with aquatic activities aplenty, including snorkeling and windsurfing. Everyone gets their rocks off getting a grip on the 30-foot oceanfront rock-climbing wall.Insider Tip: Savor tuna Carpaccio with avocado-mango relish while admiring the Murano art glass on display at the signature restaurant, Paparazzi.

    (Photo: The Leading Hotels of the World)
    Best for Adventure: Casa de CampoLa Romana, Dominican RepublicCasa de Campo means “house in the country”—as in a Kennedy-esque compound designed by Oscar de la Renta. Worried you’ll weigh too heavily in the lap of luxury after indulging in the sybaritic spa and fine dining? Casa offers tennis (13 courts), horseback riding, a sporting clays shooting center replete with safari-themed clubhouse, and sailing or fishing (deep sea and freshwater) from the Portofino-inspired marina. Golfers snarl at “Teeth of the Dog,” a Peter Dye-abolical design featuring seven water holes, trademark railroad ties, wicked bunkers, sharp drops in elevation and unfair fairways.Insider Tip: Shop and dine at Altos de Chavon, a not-cheesy replica of a 16th century Mediterranean village with narrow cobblestone streets and crenellated stone castles.

    (Photo: Steve Sanacore)
    Best for Families: Beaches Turks & CaicosProvidençiales, Turks & Caicos Beaches Turks & Caicos is that rare family place that respects both children and parents. The resort sits on Provo’s showcase strand, Grace Bay. It has 19 restaurants and bars, a 45,000-square-foot water park (with surf simulator, lazy river and tweens-only section spouting water cannons and spray guns), six pools, an Xbox 360 Game Garage, and bountiful beach activities. Kids interact with Sesame Street characters at breakfasts and piratical parades. Edutainment opportunities abound. The self-contained French Village section almost out-Disneys Disney World. Suites in the newer, plusher Italian Village feature a sliding door that seals off the brood’s bunk-bed room for greater privacy. All rooms now feature a personal Xbox game console so parents can sneak off guilt-free for Blue Mountain coffee bean scrubs or romantic dinners.Insider Tip: Spend the sunrise on the dock outside Schooners seafood restaurant (owner Butch Stewart’s favorite on-property location), and the sunset sipping drinks at the Italian Village pool tower.

    (Photo: Courtesy of Jumby Bay, A Rosewood Resort)
    Best Food: Jumby Bay, A Rosewood ResortJumby Bay (Long) Island, AntiguaThis swank resort presides over a 300-acre private island two miles off the Antiguan coast, accessible only by boat. After stopping at Jumby Bay Beach or at the SENSE spa, nourish your body and soul at the exemplary restaurants. The Pool Grille and Verandah marries the flavors of the Mediterranean to lighter, market-fresh ingredients. The men’s-clubby stone-and-mahogany Estate House, built circa 1830, channels bygone British colonial glamour. Sardinian-born Executive Chef Claudio Melis, who has manned kitchens in six Michelin-honored restaurants, has taken its kitchen to a rarified level. His food is distinguished by gorgeous tastes and textures—subtle to lusty, crispy to creamy. Sly touches include Parmesan popcorn with the otherwise classic beef Carpaccio.Insider Tip: Pack white for the resort’s White Night Sunday barbecue and dance party: It is Gatsby-meets-Caribbean.

    (Photo: Courtesy of IBEROSTAR Hotels & Resorts)
    Best for Budget: IBEROSTAR Costa DoradaPlaya Dorada, Dominican RepublicFor value, you can’t improve upon the Dominican Republic, where cookie-cutter compounds have spread in wildly popular Punta Cana and Puerto Plata. Fountains gushing throughout, a sensuous lagoon pool, and the elegant if odd architectural hodgepodge (Spanish Colonial-meets-South Pacific) belie IBEROSTAR’s low prices. Both the billeting (516 rooms in nine cheerfully colored thatch-roof buildings, each boasting its own concierge) and bill of fare, like a Brazilian rodizio (grill), exceed the budget billing; top-shelf liquors are even included. The Star Friends “ambassador” team helps guests stay entertained (on and off the property) with activities like water polo, basketball, shooting, tennis, soccer, billiards, merengue classes and Spanish lessons. All for roughly $200 per couple in high season.Insider Tip: Take an excursion to nearby Sosúa (a Latin Riviera with sidewalk cafes and twin sandy crescents) and Caberete (the Caribbean windsurfing capital).

    (Photo: ©dehoog)
    Best for Luxury: Spice Island Beach ResortGrand Anse, GrenadaSpice Island Beach Resort is a hedonistic hideaway run by one of Grenada’s titans of tourism, Sir Royston Hopkin. The contemporary-colonial design is incomparable: arches, Palladian-style windows, pickled-wood beams, paddle fans, billowing white curtains—all harmonizing with Grande Anse beach. Surveying the serene scene (spiced with celebs), it’s hard to believe that the resort lay in ruins after Hurricane Ivan devastated Grenada in 2004. But Sir Royston was able to improve on perfection. Guest rooms feature the latest decadences from flat-screen TVs to marble bathrooms with whirlpool tubs. Service is warm yet professional and discreet. Spice is also one of the Caribbean’s most environmentally conscious properties. Both Janissa’s Spa and Oliver’s Restaurant use local ingredients that give the resort its name and Grenada its nickname. Spice Island delivers the ultimate in barefoot chic.Insider Tip: Though Grenada is best known for nutmeg, mace and cinnamon production, ask the chefs about the Grenada Chocolate Factory, whose organic products have won international awards.

    (Photo: Courtesy of Sugar Beach, A Viceroy Resort, St Lucia)
    Best Spa: Sugar Beach, a Viceroy ResortSoufrière, Anse des Pitons, St. Lucia Just outside of Soufriere on St. Lucia’s less trammeled southwest coast, Sugar Beach unfurls across more than 100 acres of tropical forest below the glorious UNESCO World Heritage Pitons. Everything here screams (er, whispers) relaxation. Restaurants feature smashing views and use fresh local ingredients, while the Cane Bar presents a wide rum selection with “rummelier” to help guide guests. All accommodations offer butler service and contemporary colonial decor with four-poster beds, Wi-Fi, claw-foot tubs, plunge pools and private patios. Zen and zone out at the aptly named Rainforest Spa, which features seven tree-house treatment cabanas tucked amid the dense foliage. There’s also a wet treatment room with a salon and relaxation gazebo. An earthen Temascal is warmed by volcanic spring water; medicinal herbs poured over red-hot rocks produce a curative steam.Insider Tip: In the resort’s signature Sulphur Seduction, you visit nearby thermal hot springs to bathe in the mineral-rich waters warmed by the Soufrière volcano. Your therapist slathers you in creamy black mud, boosting metabolism and circulation.See all of Fodor’s Best Caribbean All-Inclusives for 2013

  2. Adrian…does the cost per night include the flight?.is that in us funds ? None of my friends would pay 6 0r 7 hundred a night for a room. and they make a decent salary where do these people come from?? Hotels like the chateau laurier , chateau Montebello are less than 200 Canadian. They are considered upscale here. Even Banff springs a five star hotel is under 300

  3. Lawson, No flights included and all US$. To put it is perspective, compare it with the other All-inclusive hotels on Barbados. I am told Sandals (one of their companies) are paying BDS$100 million for Casuarina. At 8 per cent (if you can get) it, thats a borrowing interest rate of US$50 per occupied room per night based on 80 per cent occupancy BEFORE any operational costs.
    What are the current interest rates in Canada?

  4. Check out the five star Shearton in San Jose Costa Rica for $139 per night. Barbados is overpriced. That is the reality of what we are facing. It is not a question of how other hotels will compete against Sandals, but rather how will all the hotels in Barbados, including Sandals, compete against other destinations. It looks like Sandals, even with a free hotel plant and little or no VAT can’t come close to competing with other destinations. That is also what S&P are telling us. Time will tell all things.

    • Is it that Barbados is overpriced or we need to target the right market? There is infrastructure which we have not available with the competition, we need to place the accent where our strength lies.

  5. Sith,
    not sure where you getting that rate. The cheapest bookable room online at the Sheraton San Jose (for the period I am comparing) is US$226 per room per night (with taxes) and that is ROOM ONLY. No Food/drink.

  6. @Adrian

    I am staying there in February for 9 days for $139 per night. Buffet breakfast included. Roof top pool. Real nice hotel. If you check Travelocity you will find 70 or so hotels in San Jose for less than $140 a night…many 4 star hotels. Most 5 star hotels in Barbados would be hard pushed to be a 3 star in Costa Rica. Not sure exactly where the strength of Barbados is anymore. The world has changed. .

  7. Adrian,
    Why continue to beat up the government for doing what the hoteliers in Barbados have refused to do . Even in the best of times , properties were not being properly maintained. Was it really fair to charge a tourist up wards of 15US$ for half a flying fish as obtained more than 25 years ago? Was it necessary to charge tourists above 4US$ for a locally produced beer 25 years ago? Why is it that no local hotelier ever matched what Butch Stewart has done? All you guys complained about was the workers and the governments (BLP and DLP). You guys took a wonderful product and priced yourselves out of the market. In the meantime you all blamed everybody for your glaring failures: beach vendors, taxi men etc etc.Have you all NEVER made a profit? I am not defending the Dems and or Bees but I get the impression that most of you are just waiting to fleece the taxpayers to prop up your glaring failures. Quite frankly both the BLP and DLP should asked that all the concessions ever given to you sorry lot be returned to the treasury with interest. Butch Stewart showed you up and it is a very bitter for all yuh to swallow. Simple as that .

  8. Adrian commercial rates in Canada fluctuate depending on who is borrowing, what type of property, size of property etc but usually it is higher than residential but it is tax deductible.It is better to buy old than build new depending on incentives. In this weeks travel section There were many all inclusive packages Varedero Aruba Mexico To varedero ,air Canada vacations all inclusive 3!/2 stars 800 per person includes flight. Nothing for Barbados in paper but island inn seems like a comparable and is 2800 around the same time frame ?????

  9. Adrian said

    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’.

    “Any future hotel investment”. What private sector investor would invest in a new hotel plant to compete with a taxpayer funded (via China) plant?

    And, while they are at it, why don’t they get some of that low cost financing so they can pay Rayside so it can pay the 60 laid off workers.

    • @William Skinner

      How do you respond to what the President of the Intimate Hotels group responded to the concessions to Butch? Intimate is comprised of small boutique hotels.

    • Business Monday: Tourism growth requires competitiveness


      AS debate continues on concessions which government has announced for Sandals Resort International, a leading Hotel Executive is insisting that there is no way the local tourism industry can pull the economy out of recession unless that sector is competitive.

      Mrs. Sue Springer, Executive Director of the Barbados Hotel and Tourism Association (BHTA) echoed these sentiments as the industry awaits Government’s response to calls for similar concessions on food and beverages to local hotels.

      Mrs. Springer had told a recent news conference that in all of his quarterly economic reviews, the Governor of the Central Bank of Barbados, Dr. Delisle Worrell has highlighted that improved tourism activity is vital for lifting economic growth in Barbados.
      “If that is to happen we have to be competitive. There is no way we can pull anybody out of anything if we cannot be competitive,” according to the BHTA official.


  10. David, I have always accepted that the hoteliers have to do more for themselves, but many seem to underate what they already do. In the Barbados Advocate article today, the EVP of the BHTA clearly states that her members spend more than $40 million a year in marketing and associated costs. Add the what the NON members spend and my guess that the total amount would be over $60 million. In fact, in real marketing terms, probably far more than Government spends. In the private sector we cannot afford to fund Second Avenue, Coral Gables and West End offices and their related costs. And in terms of upgrading and refurbishment, I don’t know of any hotel on Barbados (that it privately owned) that does not spend money EVERY year. I wonder for instance, what the Government has spent on the Hilton since it was re-built?

  11. man truth be told nobody really have sympathy or want to hear what the BHT has to say …..i meaning they have been saying the same sbhi.. “gimme ! Gimme ! for a longggggggggggggggg time and has nothing to show.,, the long and short of the story. people sick and tired of there sorry stories .now simply get on line and like the rest of us poor folks wait wunna turn, ,

  12. the beaches in front these hotels will be next.gated off.’private beaches’
    barbados has to buy its own hotels to save face when other new ones being built .also for future investments /make it all look as if everything is just good.
    smart.hummm ???????could turn silver sands easily into government housing. and things like that!!!
    how many hotels do we really need in barbados?????????huh
    greed is a terrible thing.more ,more more,let us commercialize it to the max.
    while your visitors swim in polluted sea water and eat mercury filled fish.
    you will be able to hide all that and more for a while.
    until the killing of tourist starts because barbados has no jobs nothing for their overpopulated African Barbadians.yea
    barbados dollar will crash.
    best get yours out Adrian and David .in fact i am sure you already have .
    Adrian would have never brought his all in.was just watching last night the fifth estate CBC news canada talking scientifically about barbados as a illegal tax haven for Canadian evaders and tax owing for years to canada .
    the total just from Barbados alone was about 100 million per year.
    so they coming down to get ya soon.good luck.

  13. Iabingy said:
    “Adrian would have never brought his all in.”

    Iabingy is quite the Einstein, he just gave Carson (where are you?) and AC all the ammunition they need to deal the Adrian……LOL!!

  14. @ David,
    You Asked: “How do you respond to what the President of the Intimate Hotels group responded to the concessions to Butch? Intimate is comprised of small boutique hotels.”
    I don’t listen to that crowd. Just another group of cry babies! How long have the intimate Hotels Group been around ? Have they now awaken form their slumber to get goodies too ?

    • @Alvin

      The fact you don’t know that the head of the small hotel group is a young and smart young lady name Renee Coppin says it all. Believes she owns Pirates Inn.

  15. The govt not throwing away any thing.the govt has taken away the poltical clout/leverage that the BHTA once had .Now all the govt has done is brought in a proven businees person who has been able to transform the Hotel industry across the carribbean signalling to those in the BHTA as an example and a roadmap by which they should follow.The BHTA has been handed millions or billions of dollars and nothing of signficant value to show.so what would be different now if given more

    • What % of the Barbados tourism sector is all inclusive? People who are clueless just read and try to learn for others who know a little more than them.

  16. @David,
    When I left home Dennis Tull, who conceptualised the “Intimate Hotels” brand was the head. I did not know who tllk over because I was also told that he was not well.

  17. THE FACTS:
    The Intimate Hotels of Barbados was conceptualized by a local consulting firm contracted by the Organisation of American States /Government of Barbados back in 1988.

    Contributors it would be useful to carry out research before reporting.

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