Barbados Beaches Resort Project Stalled

Submitted by Anthony Davis
Sandals Butch Stewart

Sandals Butch Stewart

The start of construction on the highly anticipated Beaches Resort in Barbados has been set back. “Speaking to the media following a tour of the Sandals Barbados property this afternoon, Gordon “Butch” Stewart, chairman of Sandals Resorts International – the operator of the Beaches and Sandals brands – said work on the property in Heywoods, St. Peter, had been pushed back due to the complexity of the project.” Source: Barbados Today

When the Minister of Tourism, and the Minister of Finance decided to give Sandals Resorts International the go-ahead for taking over the Almond Beach Village Resort, the excuse was that the projected time for Manager of the Crane Resorts and Residences’ Paul Doyle’s finishing of the hotel he proposed would take longer than Sandals. There was just a couple of months difference between the two, but this Government was adamant that Sandals had the best proposal and gave it to them. All of a sudden a third party became involved.

Continue reading

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?

Continue reading

Sandals Almond Chronology

Hotel mogul Butch Stewart

Hotel mogul Butch Stewart

The Barbados government recently announced that it has signed an MOU with Butch Stewart’s Sandals to manage the former Almond Beach Village property.  BU family member Due Diligence has submitted the following research to inform debate.

Neal and Massey buys control of BS&T in 2008, and by 2012 has acquired all the shares of BS&T; and in May 2012 had the shares BS&T delisted.

“Neal and Massy Holdings Ltd’s (N&M) request to have its Barbados Shipping & Trading Company Ltd (BS&T) delisted from the T&T Stock Exchange (TTSE) was made as a result of the T&T-based conglomerate acquiring all 100 per cent of its shares. So said Gervase Warner, chief executive officer, N&M Group. “Last September we made an offer to the BS&T shareholders for the rest of the outstanding shares, and now that BS&T is 100 per cent owned by Neal and Massy, it becomes a subsidiary of Neal and Massy. “Now that we acquired all of the outstanding shares of BS&T…there was no opportunity for anyone to trade shares anymore.” BS&T’s delisting means change, Warner said. “What you can expect is that Neal and Massy would be a little more prominent in Barbados than it has been in the past. We will continue to respect the fact that BS&T has a long history and heritage in Barbados. “It is 100 per cent-owned by Neal and Massy, the parent company, there are no organisational changes above and beyond what we have already done.”

Continue reading

Regional Turbulence!

Adrian Loveridge - Owner of Peach & Quiet Hotel

Adrian Loveridge – Owner of Peach & Quiet Hotel

Over the last few weeks I have been trying to understand the logic behind the collection of decisions made by the Board and senior management of LIAT (1974) Ltd, the consequences of which has been to create an unprecedented operational debacle. Even the CEO was describing the situation with emotive words like the ‘perfect storm’ and ‘meltdown’. While I admire Captain Brunton’s attempts to explain the circumstances behind the cause of what can only be called a state of chaos, there are still many questions that remain unanswered.

First, let us go back to the choice of the new replacement aircraft. Why the ATR’s?

When the Bombardier Q400 is faster, offering quicker turnarounds (more flights per day), has a substantially greater range, which would allow the carrier to operate to some of the new routes mentioned and perhaps even more relevant, required limited pilot retraining. There may have been overwhelming reasons why the ATR planes where chosen over the Q400’s, but surely we are owed an explanation? If LIAT had a history of profitability and that for a large part of it’s lifetime had not relied on the grace and favour of the Caribbean taxpayers, it might be different. But with a quoted ‘accumulated deficit of EC$344 million (around US$127 million) at the end of 2012’, any hope of achieving stand-alone viability, in the foreseeable future, appears an almost impossible dream. Yet elected administrations have been persuaded to guarantee loans and leases, amounting to tens of millions of dollars. If these cannot be repaid, then we will be the ones saddled with the debts.

Continue reading

Lifting the Veil

Adrian Loveridge - Owner of Peach & Quiet Hotel

Adrian Loveridge – Owner of Peach & Quiet Hotel

I would like this week to stay on the subject of transparency and communication in the tourism industry, and the underlying speculation, misunderstanding and consequential harm that can result by not ensuring these virtues are carried out successfully. In both major newspapers last Sunday was the announcement of an auction, set to take place the following Saturday, of many ‘goods and chattels’ owned by Almond Beach Village which closed its doors two weeks short of a year ago.

Yet in another arm of the media, a few weeks ago, under the banner headline Buying backwe were told that of the four options on the table, ‘Prime Minister Freundel Stuart will sit with his Cabinet to agree to buy back Almond Beach Village and its brand for almost $110 million’. The article went on, ‘The plan, being piloted by Minister of Tourism Richard Sealy, calls for a US$10 million refurbishment project, after which the sprawling 400-room facility will be turned over to former staff, who have submitted a plan to operate it’.

The purported logic behind choosing this fourth option was justified based on the time the property would be out of service, citing the other three alternatives as taking too long to implement. Other verbatim quotes include ‘In view of the urgency of this need, it is now proposed that Government seek to immediately acquire Almond Beach Village’ and ‘with a view of reopening in an effort to supplement room stock for 2013 and beyond’.

Continue reading

Following Grenada’s Business Facilitation Script

Adrian Loveridge – Owner of Peach & Quiet Hotel

Prime Minister of Grenada, the Hon. Tillman Thomas recently described the purchase of the former La Source by Sandals as ‘a potential game-changer for our tourism industry’. He went on to say, the entry of resort company Sandals to Grenada’s market is ‘a tide that could lift all boats’. I think he is right, perhaps in more ways that we can initially anticipate. What is remarkable about this ‘deal’ is the timing, which must make it at least a candidate for the quickest hotel acquisition ever in the Guinness Book of Records.

It was reported that La Source only closed around the 19th October, when 150 workers were laid-off. Yet, within three weeks the Government of Grenada ‘facilitated their (Sandals) investment with a package of incentives’. While other administrations around the region hesitated, procrastinated and some may even imply, might have adopted a form of hibernation akin to prolonged sleep. Perhaps galvanized by the negative consequences of revenue and employment losses and the danger of possibly losing airlift, someone picked up the phone and made the move.

Continue reading

Update On Almond Beach Village Anyone?

Hotel mongul Butch Stewart has his eyes on Almond Beach Club

One of the unforgiving characteristics of this Democratic Labour Party (DLP) government has been its reluctance to communicate to a public which yearns for information. Surely if there is one group in society who has a right to know how its government is treating with issues, it is the taxpayers. Prime Minister Fruendel Stuart’s taciturn nature has indelibly labelled the legacy of his Cabinet. On the eve of a general election it is unlikely public perception will change.

Of the myriad of issues which this government continues to wrestle -thrown up by the global economy – ordinary citizens have the capacity to understand that this is a difficult time to govern. Surely one way the Stuart government can allay the anxiety of citizens is to feed them relevant information. A reasonable assumption must be that disseminating information to the population is a prerequisite of a democracy.

One of the many issues which is of concern is the status of the sale of Almond Beach Village. Since April this year it was reported that several buyers were short listed by the owners Neal & Massy and a decision was promised in weeks to inform the winning purchaser. It is several months later and we are still waiting. Given the significant contribution to GDP which the Almond Beach property generated, the Opposition and others had suggested to government at the time that it was a company which should have been labelled too big to fail. The public was advised by Minister Richard Sealy the government would play its part to pave the way for a smooth sale of Almond Beach Village. It appears that Sealy has been emulating Stuart because he has been very silent of late.

Continue reading

The Hegemony Of Trinidad Continues

Christopher Sharon, Deputy CEO of First Citizens Bank

The woman who is leading First Citizens’ acquisition of Butterfield Bank says she knows there is anti-Trinidad sentiment in Barbados right now. But Sharon Christopher, the lawyer and deputy chief executive officer of First Citizens Group said the company wanted earnestly for the local public to trust the institution and accept it was not here to deprive Barbados of anything – Nation Newspaper

On June 07, 2007 BU posted a blog titled Is Trinidad The Hegemonist Of The Caribbean? The oil rich nation simply does not have the investment capacity in the domestic market to satisfy investors. A few islands in the Caribbean, Barbados especially, represent a receptive climate for asset picking. A passive business class, an accommodating government scared to offend its Caricom partners, and a people willing to toss away their identify all combine to make Barbados a play ground for T&T investors.

The truckload of T&T investors who have descended on Barbados create the opportunity for Barbadians to comment because they do not believe there has been a willingness on the T&T side to accommodate Barbados. The fishing agreement comes to mind. Most recent is Neal & Massy’s willingness to close Almond Beach Village (ABV) without a fight and in the process deposit 500 workers on the breadline. As a consequence of N&M’s mismanagement of ABV other investors are now fighting over the opportunity to purchase the property.

Continue reading

The Fall of Almond Beach Village, Next Chapter

Are tourist arrivals influenced by Capital markets?

Almond Beach Village (ABV) deposited hundreds of employees on the breadline yesterday. There is no need to rehash all that has been stated in recent weeks except to express commiserations with the employees of ABV. There is the saying that behind every grey cloud is a silver lining and BU remains bullish given the ‘quality’ of suitors vying for the St. Peter property.

When updated ARI financials are posted the country needs to answer the questions – what the hell happened at ABV given the leadership position it had in the market? How did the shareholders allow a property which was profitmaking for most of its existence to collapse? It is important for Barbados which depends almost solely on tourism – a strategic asset – to analyse what really happened to ABV. The fact that it used an all inclusive model is another consideration.

Continue reading

A Land Use Policy:The Harlequin Squeeze

We loyal sons and daughters all

Do hereby make it known

These fields and hills beyond recall

Are now our very own

We write our names on history’s page

With expectations great,

Strict guardians of our heritage

Firm craftsmen of our fate

National Anthem of Barbados (chorus)

The failure of Almond Beach Village has fuelled feeling in some quarters that Neal & Massey is shedding assets to rebalance the acquisition of BS&T a few years ago. This has caused tongues to wag about whether Barbados has a viable land use policy. It is no secret our land space is known to be approximately 166sq miles. The absence of a robust land use policy should make this a concern for all Bajans at home and abroad.

Continue reading

Notes From a Native Son – Are We Facing the Point of No-Return?

Hal Austin

Two recent events should have shaken Barbadian society to the root. The first was the plea by former prime minister Owen Arthur for a truce on the dangerous standoff between the two dominant political parties on what to do about our badly managed economy, and for a cross-party National Commission on the Economic Development of Barbados. He did not put it in such words, but the sentiment is the same: if this generation of political leaders is going to pass on a sustainable economy and tolerant and stable society to future generations we have to call a halt on the political tribalism led by this terrible Ineptocracy (I love the word) and put our heads together in the interest of future generations.

The development, closely linked to the first, came out of the confusing and misleading hysteria about the future of Almond Resorts, was the call by Bjorn Bjerkhamn, the wealthy Norwegian, who now brands himself a ‘Barbadian’ on the basis of over 50 years of residence and, no doubt, a local passport. Mr Bjerkhamn is one of the wealthiest of the so-called New Barbadians, people who have moved from the four corners of the world and have sought to appropriate our lovely island and call it home. Some of them have nothing but contempt for local people, although this may not apply to Mr Bjerkhamn. I think I have some form on this: I have lived in Britain for over twice as long as I have lived in Barbados. Armed with my British passport, I am still reminded almost every day that I am an immigrant and any children or grandchildren those of us who have lived in Britain since the 1960s have, are called second-generation, or third-generation immigrants. It is a burden I am prepared to carry on my shoulders, since I challenge any man or woman to be more Barbadian than I.

Continue reading

Notes From a Native Son – Is There a Wider Lesson In Corporate Barbados From The Almond Crisis?

Hal Austin

Introduction:
It is always sad news when a business runs in to commercial trouble, but the Almond Resorts car crash was well telegraphed. It is clear that the so-called all-inclusive business model, although attractive in theory in that it gives consumers a rough guide as to how much they will spend, in practice it is untenable because providers see it as a good area in which to cut costs, stretch revenue streams and, more worrying, they need to fabricate a story of social pathology on the outside to terrify customers in to staying within their walls.

As a model for producing sound cash flow and profitability, the jury is still out; and as for being a model built on fear, that is a matter for governments. Even so, this negative policy not only denies visitors from enjoying the real hospitality of local people, it also gives the operators the freedom to manage the supply of ‘free’ food and drink by conveniently running out of supplies at the most inconvenient times and limiting the other services offered to their captive customers as a central part of business practice.

In tax terms, payments are often made outside the local jurisdiction and drip fed in to the local business as and when required. This means that in terms of the company’s revenue and profit and loss, this can easily be manipulated by the firm’s accountants to the advantage of its shareholders and executives. Almond Beach Village may not indulge in all or any of these practices, but as a 400-bed facility with reported debt of about Bds$100m, something has gone seriously wrong.

Continue reading

Neal & Massy Pulls The Plug On Almond Beach Village

Gervase Warner CEO of Neal & Massy

The Board of Almond Resorts Inc (ARI) confirmed today at a Special Meeting of Shareholders that Almond Beach Village will be closed at monthend. The news of the closure should not come as a surprise because it was hinted at in recent weeks by senior Neal & Massy personnel. It was confirmed at the meeting today that  Scotiabank – after several loans arrangements – pull the plug. There is the good news that the other Almond properties will likely be sold as going concerns.

The closure of Almond Beach Village will be a massive blow to the tourism sector and economy of Barbados. Over 500 employees on the breadline with the official employment rate posted at 10%+ gives good reason for a national response. The shareholders present at the meeting today viewed unaudited financials up to end of December 2012 – huge losses, negative cashflows and deep erosion of shareholders equity makes the decision to close a no-brainer but…

It is interesting Warner (CEO of Neal & Massy) took the time to stress to shareholders today that the aggressive expansion strategy by the Ralph Taylor led Board in 2006 over-leveraged ARI. He qualified his statement by stating no one could have predicted the global economic meltdown which has led to the financial difficulty ARI is experiencing.  BU wonders why a short 5-years ago when Ralph Taylor and company made the decision to expand there was no vision to upgrade the existing plant. It was a poor decision by Barbados’ leading hotelier and his other board members.

Continue reading