Barbados hotel operators face a Government slanted playing field

“Despite the open hostility frequently directed at hoteliers on Barbados, the general public forgets that Government is in fact already the largest single owner of accommodation room stock on the island.”

Adrian Loveridge, tourism expert

Adrian Loveridge, tourism expert

Over the last few weeks I have been following the various views expressed, vested or otherwise, comparing the merits of proceeding with the stated non-binding Memorandum of Understanding signed between the Sandals group of companies and Government or allowing the current operator of Almond Beach Village to take over the entire property. What appears dismally lacking is any comprehensive analysis detailing the potential financial benefits of both options for the short, medium and long term.

With Sandals now closed at least until December, the majority of fiscal activity will be generated by construction, where virtually all materials used are imported and require foreign exchange to pay for them.

Even with just 160 rooms out of a total of 396 currently open, Almond St. Peter will continue to earn somewhere around BDS$2 million per month at 85 per cent occupancy. With all rooms fully functional that amount would increase to approximately BDS$6 million. Meaningful employment would not only be retained but substantially grown year round increasing NIS and tax contributions to Government. And on the subject of tax, the current Almond ‘managers’ still pay VAT and from what I understand largely source the majority of consumables locally. 

Then there is the critical airlift support question. Nearly 16,000 seats this year have been lost with the closure of Sandals. Almond is helping to fill around 300 of these per week, based on current room availability which could climb to nearly 800 weekly if the entire hotel was open – based on an average 7 night stay. When, as planned, Almond then closes again on April 2015, it will be years before a new Beaches adds any additional or replacement airlift. Whether during the interim this leads to even more reduction in air services, either in frequency or curtailment of routes, only time will tell.

Meanwhile another 240 rooms remain empty – abandoned and unproductive at the derelict Sam Lords Castle, as the CLICO debacle slumbers on and on. The current administration has been less than candid over what amounts of NIS, land and other taxes are still outstanding by the owners of this property. As a preferred creditor in this case, it is also puzzling that over $100 million can be found to buy Almond, but not a lesser amount to acquire and restore, what is in many respects, an equally attractive location with tremendous land potential for expansion.

The site lends itself to building a new conference centre, providing over two hundred truly 4 star suites and the possibility of enticing a world brand to manage it. There is probably no better location than Long Bay to attract substantial numbers of incentive or motivational groups either.

Despite the open hostility frequently directed at hoteliers on Barbados the general public perhaps tend to forget that Government is in fact already the largest single owner of accommodation room stock on the island.

Very few of us in the private sector consider this desirable or even sustainable, but until our political directorate levels the playing field (as has been repeatedly promised for months) this is very unlikely to change in the near future.

2 Comments

Filed under Barbados, Barbados Tourism, Economy

2 responses to “Barbados hotel operators face a Government slanted playing field

  1. Reasonable man

    If I owned a small hotel in Barbados I would work hard to source locally, but with a huge operation the local shortfalls in supply cannot be tolerated. That’s why huge operations have to container in everything: because they know it will be there.

  2. Adrian Loveridge

    Sounds Reasonable but does not happen. Do you think Elegant Hotels and the Hilton, which alone has 74 more more rooms than Sandals Barbados, bring in everything by container? They also need to know it will be there. Thats why we have distributors like Hanschell Inniss, SBI Distribution etc. The current reason Sandals (when open) container consumables in, is so they can avoid taxes and duties.