In view of the recent Barbados Sandals/Beaches deal, we travel to Grenada where S. Brian Samuel presents…
A Case Study of Hotel Investment in Grenada
by S. Brian Samuel
I recently published an article entitled “Attracting Foreign Investment to Grenada” in which I noted some of the pitfalls to investing in Grenada. In the article I briefly mentioned the case of LaSource resort, to illustrate the use of fiscal incentives as a way of securing the Sandals chain investment in Grenada.
On reflection, the story of La Source is worthy of a deeper look. The LaSource saga, for indeed it is a saga; with ups, downs and plot twists worthy of any soap opera; is a classic illustration of what that can go right — and wrong — with hotel investments in small Caribbean islands. I guess I am qualified to write the story; for I was there from before the beginning; until after the end.
2. Before the Beginning
In 1990 I was working in Barbados for the Caribbean Project Development Facility, an offshoot of the World Bank. My job was to raise financing for Caribbean businesses, and one of my earliest (successful!) projects was La Source hotel in Grenada, which was being promoted by a local developer called Leon Taylor.
The first time I met Taylor, he wasn’t in a particularly good mood, as he had become frustrated from having to deal with the financing agencies, one of them being the agency I worked for. He fixed his good eye on me and growled “What the f___ do you want?” or words to that effect! But things went steadily upwards from there, and I ultimately ended up raising US$15 million for LaSource, in debt and equity financing from a consortium of development banks. That in itself was a long and winding road; including one memorable day when I finally cornered Leon into going over the final Business Plan for the resort, line by painstaking line – under a coconut tree on Sandy Island, during Carriacou Regatta!
In all my 20 years at the World Bank, LaSource remains my all-time proudest project — and there were quite a few contenders. For a start it reconnected me to Grenada, my home I never knew; and that feeling carried over into a sense of pride in a job well done, when I stood side-by-side with Leon Taylor on the gala opening night of LaSource in December 1993. When I retired from the World Bank and returned home in 2008, I worked as Executive Director of LaSource from its reopening in February 2008 until October 2010. So I know where a few skeletons are buried. Continue reading