Barbados Authority Gambles on Sandals Lifeline

Adrian Loveridge - Hotelier

Adrian Loveridge – Hotelier

It is now more than two months since the former Casuarina Beach Resort was re-branded as Sandals Barbados and Government granted the company unprecedented extraordinary concessions, creating probably the single largest unlevel playing field the private sector tourism industry has encountered in its long history.

Timing sometimes can be everything and following nearly two years of long stay visitor decline, the anticipated revenue generated through the critical two week Christmas and New Year period, perhaps has never been so pivotal to the survival of the industry, as we enter 2014.

On reflection it appears to me that there has been a degree of gambling behind the recent decisions made. Few can doubt that the Stewart family has built an enviable hotel empire with all the trappings of success, including a private executive jet, with a replacement value of over US$20 million. Yet it must have been a huge calculated risk to acquire a property that clearly was not up to the standards of other Sandals hotels and so close to Christmas.

Reading carefully through the initial hundred or so TripAdvisor guest reviews the phrase that stands out, almost above all others is ‘in-transition’. Time will tell what collateral damage, whether permanent or temporary has been done to the ‘brand’ and consequentially, the destination.

Again, reverting to timing this whole exercise going on where another hotel is in ‘transition’ on Grenada. Against normal practice Sandals Grenada has inherited the many positive TripAdvisor reviews of the former La Source, rather than starting afresh in ratings. But despite this, some of the personal guest experiences are far less than complimentary, in some cases describing the property as a ‘building site’.

When airlines and hotels are charging peak seasonal rates, it must be abundantly clear to all involved that the level of expectations is at the highest and there is little room for consumer disappointment.

Our Government too has gambled that the long term gain in attracting Sandals to Barbados will more than make up for the perceived short to medium alienation of the remaining entire accommodation sector.

I am still struggling to understand the logic. There has been no immediate increase in airlift, arrivals or room stock and it will be years down the road before additional capacity is added in new construction.

Yes! There may have been some new jobs created, but how many, when you factor in the reported 150 work permits. Compound the very limited use of locally made products and you have to question, what is the real gain?

The other major concern is that investors, both local and overseas, some of which have been building their businesses for decades, have been almost overnight, disadvantaged to a level where they cannot possibly compete with the new kids on the block, even before Sandals invoked widespread discounting.

Perhaps to a point where they have already reappraised any further investment until parity is restored. Clearly they will also be looking at creative ways to minimise the imposed detrimental effects caused by the unilateral concessions. This may include collecting a larger percentage of direct and tour operator lodging revenue offshore to reduce the level of VAT and corporation tax payable locally. Will this be monitored by the Central Bank? Some tourism entities may also consider re-registering their companies in less hostile tax havens like the British Virgin Islands, Cayman or Bermuda.

I am sure our policymakers have taken all these factors into account and Cabinet concluded that the overall long term tourism earnings will increase rather than fall as a result, but it needs to be explained.

30 thoughts on “Barbados Authority Gambles on Sandals Lifeline

  1. @ Adrian Loveridge:

    Can you bring us up to speed on the scheduled ‘reopening’ of the Almond Facility at Heywoods under the management of Mr. Weatherhead?

    Isn’t the hotel earmarked for a January 2014 “semi-grand” opening to welcome visitors to boost tourism numbers and spending and help save Barbados?

  2. Miller,
    their FaceBook book still shows a partial re-opening (135 rooms) on 16 January 2014. I am unable to comment on the concessions granted to Mr Weatherhead’s company as they have not been made public despite the hotel being wholly owned by the taxpayer (assuming that Government has paid for it).

  3. Sith,

    Unique Vacations Inc., registered in Florida.

    My own receipt of payment does not show any office address but my credit card payment was processed in the USA. On check-out at Sandals Barbados we did request a receipt of payment, but it was refused.

  4. @ Adrian Loveridge | January 13, 2014 at 11:51 AM |

    Any concessions granted to Mr Weatherhead’s company should not be a controversial issue given what Sandals were given at Casuarina.
    If concessions were granted to ensure the scheduled ‘partial opening ‘on 16 January 2014 all well and good.
    The question is whether that date is still realistic or is there a typographical error and it should really read “16 January 2015?

  5. Miller, I am afraid that I have to disagree with you on this one. Were the concessions offered to Mr Weatherhead offered to ANY other tourism entity? Bearing in mind this is a wholly owned taxpayer property, shouldn’t other players have been given a chance, at least
    to tender? This is the problem with trying to level the playing field.

  6. @Adrian
    a couple of qustions

    1) Unique Vacations do operate out of Miami Florida. Were you charged any Barbados VAT or any other sales tax on your purchase?

    2) How would the funds you paid that were processed in the USA flow back to Barbados to build FX reserves in Barbados?

    3) How many of the 159 work permits remain unfilled?

  7. @ Adrian Loveridge | January 13, 2014 at 12:08 PM |

    I agree with your position.
    My view is that there should be a level business playing field; hence my call for the amendment to the Tourism Development Act to make all concessions available to all players in the hotel sector of the industry.

    I was of the view that the Weatherhead deal was above board. Are you saying the food and beverages concessions based on the Casuarina model have also been given to the Weatherhead arrangement leaving the other players still at a serious disadvantage?

  8. Sith,
    no VAT was charged or VAT registration number or any other tax number was shown.
    For answers to 2) and 3), I am afraid you are going to have to ask Adam or Gordon ‘Butch’ Stewart or an informed member of our Government.

  9. Miller, I sadly cannot answer that factually. Clearly the concessions granted to Sandals (Casuarina) did not meet the Government’s stated criteria which required a minimum investment of BDS$500 million and I doubt if Mr Weatherhead’s minimal investment did either. There is absolutely no transparency behind either of these arrangements.

    Mr Sinckler has made it clear that they do not intend there to be a level playing field, otherwise he would have not make silly comments like the one he recently made about ‘Mom and Pop Bed and Breakfast’ places.

    Take away the family built tourism Business on Barbados and I wonder what sort of industry we would be left with, especially in the early days.

    ra concerning a minimum investment of BDS$500 million.

  10. “What a tangled web we weave.”
    When first(?) (maybe(: ) we practise to decieve.!!

    Why are we discussing this shite when we all know EVERYTHING that moves in BIM is Corrupt and rotten to the core.

  11. @Adrian

    So as I understand it your money was paid to a on line company Unique Vacations which also has the alternate name of Sandals International. There is no record on any of your receipts of any vat or sales tax accounting. Since the money was paid to Sandals International, it would be likely at the discretion of Sandals International as to where that money ultimately is disbursed to but it would appear from the lack of verifiable receipts that it is not going back to Barbados. So if the money you paid was in the USA it could then be disbursed anywhere and to anyone. Is it possible then that since the Barbados hotel was obtained without capital investment, that the money being earned by it which is being paid into a USA company, is being used to fund another hotel in perhaps another location or pay for fees such as consulting.

  12. How very perceptive of you Sith neither the DLP nor BLP would have come up with those very intertwined scams not even in a million years.

  13. The same authorities gambled on the cruise sector and by the look of things the gamble paid off. With the tourism sector pushing out green shoots of revival Adrian you’re in ducks guts. If the long stay numbers stop falling and start going north it will be interesting what new assinine line you going to come with.

  14. Ruffin,
    I deliberately stay away from cruise tourism as there are even far more areas of doubt and lack of accountability. Cruise ship operators are the masters of avoiding (some may say evading) taxes and you only have to look at the Carnival Corporation to substantiate that. Unlike land based tourism you cannot just look at Barbados in isolation as very few cruise packages would be sold offering just one port. Barbados benefits (when it does) with the help of its neighbours.

  15. @Ruffin. We can tell you’re a genius. “Took a gamble?” Paid off? Paid off how? Your one dimensional arithmetic fails to account for a return on the “gamble.” Without repeating ad nauseum that cruise ship passengers per head spend very little in Barbados, the topic here, ironically, is much the same: MONEY spent by Gov’t (READ TAXPAYERS) locally so foreigners can EARN and KEEP their profits elsewhere. NO VAT charged on rooms? I sometimes forget how absolutely dumb as dirt an alarming number of Bajans can be in “complex” matters such as these. It is not what you make, it is what you keep. In this case, Barbados makes very little, if any. But you already knew that. I’ll bet you even have a certificate or a degree.

  16. So wait….!!!
    Wunna mean to say that all along wunna still fail to grasp the meaning of brass bowls….?

    Wuh shite!!, what could be dumber than..?
    Buy an abandoned hotel for $100M
    Pay to knock it down…
    Rebuild it for $500M
    GIVE it to a foreigner from a COMPETING country
    Give him 100% tax exemptions

    Do we need to analyze anything else….?
    What the France!!!!

  17. @ David
    ” Barbados is #1 on the HDI….”

    No doubt!
    In other places, this sorta shiite is seen as a problem to the citizens who riot, sue, cuss, demonstrate and rebel …..

    Brass bowls like shiite…. They lap it up!

    What problem what!!
    We have no problem here……


  18. The document at,%20Gordon%20v%20The%20Contractual%20General.pdf

    suggests that anyone who has a dispute with Hon Gordon Stewart OJ and/or Gorstew Limited better have a good solicitor and deep pockets for legal expenses.

    First 5 pages recording background of Sandals Whitehouse may show the MO of Hon. Gordon Stewart OJ.

    He sure seems to get his way

    • Anyone heard the MOF of Antigua speaking to their Sandals association. Wonder who commissioned the piece for airplay.

      It seems they too are hoping to mirror the DLP general election experience in Barbados.

  19. If only we can grow our arrivals like St. Lucia. What is their strategy? Id it that it is a cheaper destination? Maybe a better product?

    Saint Lucia’s 2013 visitor arrivals exceed 2011 high
    Published on January 14, 2014 Email To Friend Print Version

    CASTRIES, St Lucia — Last year brought unprecedented growth for the tourism industry in Saint Lucia. The Saint Lucia Tourist Board has reported record stay-over arrivals for 2013, achieving the highest number of arrivals in the island’s history, reaching more than 315,000 visitors, surpassing 2011’s record of 312,404.

    Preliminary statistics boast a 3.4 percent increase in overall arrivals from 2012. The largest growth was seen in from United States, a leading source market for the island, with an 11 percent increase from the previous year.

    “Several factors played an integral part in the success we’ve had this year, each as necessary as the other, from increased airlift accessibility and strategic marketing initiatives to the enhancements made by our hotel partners. We look forward to starting 2014 on a high note and striving to make this year more productive than last.” said Lorne Theophilus, minister of tourism, heritage and creative industries.

    According to Theophilus, the momentum in 2013 will continue to build in the New Year as the Saint Lucia Tourist Board estimates that hoteliers and tourism entities on the island will spend upwards of US$230 million on upgrades and refurbishments, attracting renowned luxury brands such as Sixth Sense and Capella Resorts to the island.

    The Saint Lucia Tourist Board will continue to promote several island-wide initiatives such as the recently rebranded Saint Lucia Jazz and Arts Festival, the renowned Saint Lucia Health and Wellness Retreat, Chocolate Heritage Month and the second-annual “Love Elevated” Wedding Symposium, offering insight into the island’s romantic hotspots and top wedding locations.

  20. David | January 14, 2014 at 6:31 AM |

    If only we can grow our arrivals like St. Lucia. What is their strategy?

    Newspaper advertising part of strategy

    Back page of first section of January 13, 2014, Globe and Mail, is full page St. Lucia Tourism/Air Canada Vacations ad, promoting 12 properties, including two Sandals.

    Prices for one week vacations range from CAD$819 (4 days at Bay Gardens) to CAD$4,919 ( 1 week at The Landings St. Lucia).

    These ads run regularly in Toronto papers.

    BTA has not been seen in Toronto papers in many months.

Leave a comment, join the discussion.