Hotels & Resorts Limited product is so bad, the Barbados Government is having difficulty exiting the business
Barbadians have no idea how much money they poured into the doomed-to-fail-from-the-start attempt to nationalize the hotel industry known as “GEMS”, Hotels & Resorts Limited. When you include the “free” air subsidies and “free” marketing support from the Barbados Tourism Authority it is surely a billion dollars poured down that hole and probably much, much more.
Not to forget that all the while the other hotels on the island were having to compete with a heavily subsidized nationally-owned chain. And Owen Arthur wondered why no investors wanted to build new facilities! To compete against government subsidized hotels? Cha! What… you think foreign investors are crazy?
Corruption, Foreign Bank Accounts, ZERO Accountability
Then there was the matter of the supply chain for GEMS Hotels. For many years everything for all the hotels ran through central suppliers. Yup, sourced out of Miami and New York probably through a few little “handling” companies that took 5% of everything and forwarded the profits to the owners’ foreign bank accounts.
The goods never went through Miami though: only the invoices and payments. The goods were straight shipped from the real suppliers to Barbados. Miami and New York were only about the skim. An accurate audit of Hotels & Resorts would show that – but it’ll never happen.
When the chain started to suck so much public money that there was no way the BLP could continue with the rape, the government started selling off the hotels. First, they fixed them up with public money and then sold them off for secret amounts after secret negotiations. It was just amazing how often deals were announced before anyone knew a hotel was up for sale – in a little dance choreographed as carefully as any ballet.
The Real Tragedy of GEMS: Hotel employment became a government job
Nevermind the money stolen and wasted. Nevermind the damage to the Barbados brand because of sub-standard facilities and service.
The real tragedy of GEMS of Barbados is that an entire generation of young people came to view their tourism employment as secure and protected “government jobs”.
In the real world, businesses have to perform or the customers go away. In the real world, employees have to perform or they get sacked. Not so with GEMS of Barbados hotels – because it was too big to fail and the government kept throwing money into the hole.
The GEMS hotels were always “a good deal” for visitors because the entire operation from facilities to salaries to marketing was supported by public tax dollars. In the good old days, of course the rooms were full because for every person in the hotel the government probably subsidized a hundred dollars or more a day. It was a great deal for the tourists: just not for you and me paying for it all you understand.
And, with no expectation or requirement for profit, there was no need to maintain performance standards for anything.
GEMS Hotels: A Corporate Culture of “So what?”
With the entire operation artificially surviving by sucking on the public teat, it was inevitable that a corporate culture of “So what?” and “Doan bother me ’bout losses” would filter down to the staff. Nobody gets fired from a government job and working for GEMS Hotels became a government job.
But as the internet grew, so did the reports of filthy rooms and rude, uncaring staff. Before the internet, the ordinary tourist had no way of countering the glossy brochures and multi-million dollar BTA advertising budget. The internet changed everything: any offended tourist, any person whose vacation was ruined by a filthy room or poor food and the “attitude” of staff could communicate that to the entire world.
And communicate they do!
“This hotel should be condemned! The pictures are deceiving. I chose this hotel because of the location and price, but the whole experience with management and staff was horrific. After a 13 hour flight and waiting another hour for the room to be ready it still was filthy: the linen had cigarette holes, the bathroom was unsanitary. There were hairs…”
TripAdvisor.com recent review of Time Out at the Gap hotel, April 18, 2011
“The hotel is a beautiful place but they seem to be on cost-cutting mode at this time. There were hardly any staff around, service was always poor, the bathroom could be cleaner and the toilet flooded out the apartment. Food is very expensive. Breakfast was the same for all the days we stayed with cereal, bread, butter and jam being…”
TripAdvisor.com recent review of The Savannah Hotel
Two more GEMS Hotels go private sector
Barbados Today says that over 100 people are going to be sacked when Time Out at the Gap and The Savannah Hotel properties are turned over to a private corporation in the next few months. The DLP government is wisely divesting the taxpayers of a money pit, having realized that government doesn’t have the entrepreneurial culture or skill set necessary to successfully run hotels. Let’s face it folks, government couldn’t even make money running a brothel!
Ludo Marcelo and Bernard Weatherhead have leased the hotels and they’ll be sacking everybody and then hiring the best. Former employees will be welcome to apply, but alas – many will be offered positions and salaries that more honestly reflect their demonstrated skill level and work ethic, or rather, lack of.
There is every reason to assume that Ludo and Bernie will make a go of these two failed hotels and it is likely that Time Out and The Savannah will eventually become hotels that Barbadians can be proud of.
I can guarantee one thing for certain…
For employees at Time Out and the Savannah this is the end of the sullen, uncaring attitude and resentment of labour that seems to be a trait of government employment. The staff who are lucky enough to be re-hired will no doubt have a different attitude. When a tourist walks through the door hotel staff will be genuinely pleased to see them because they will know that the hotel’s continued existence (and their own employment) depends entirely on keeping the tourists happy and returning.
It will be quite a change for these GEMS Hotels.
Tomorrow: Afra Raymond weighs in on government in business