Recently the Barbados Advocate carried an article in which the Auditor General stated that Hotels and Resorts Ltd owed Government, (the taxpayer), $48 million in unpaid interest. He also reported that the then Government had agreed a loan of $145.3 million. Hotels and Resorts Ltd, currently comprises of just three hotels, Blue Horizon, the Savannah and Time Out at the Gap, with a total of 241 rooms. This does not include the 30 rooms that have remained derelict since Blue Horizon was acquired.
Also must be mentioned is the sale of Silver Rock Hotel and Eastry House and exactly where the proceeds of these properties have gone. But let’s stick with the remaining operating properties. According to the Barbados Statistical Service, our registered accommodation providers (Hotels, Guest Houses and Apartments) achieved an annual average occupancy of nearly 51 per cent in the last recorded year available.
If we therefore take this an indicator for the GEMS properties, that means they reach around 44,862 in total, occupied room nights per year. To service the $48 million interest alone, that means each occupied room would have to charge an additional BDS$1,070 per occupied room per night.
Even at full published rack rates, I somehow doubt that overall they are achieving at average room rate of US$150 per night. Take into account, all the tour operator discounting and years of predatory pricing, and that figure could be closer to US$80. Add the latest loan just revealed, but made in July 2002 of BDS$145.3 million and you are compounding the debt by over $10 million per annum in interest alone.
So in addition to the $1,070 per occupied room night already needed to repay the interest (not capital) debt, another $223 for each and every night a room is occupied is required as the interest due and payable climbs by over $10 million per annum.
How much longer is this madness going continue?
Adrian Loveridge
6 responses so far ↓
David // June 17, 2008 at 8:10 PM
The Thompson led government needs to reveal bring closure to this matter. Is this a case where the financials are misplaced like the St. Joseph report?
Carson C. Cadogan // June 17, 2008 at 10:03 PM
If the new Govt. wants to sell, I know a group of Trnindadian business men interested in buying the Gems project.
The People's Democratic Congress // June 18, 2008 at 3:40 AM
This GEMS brand was badly and poorly conceptualized from the beginning, and surely remains as a dingy and unclean monument to the sheer catastrophic ignorance of former prime minister Owen Arthur, the worst prime minister Barbados has had so far and will have ever had for some while to come. The quicker this GEMS brand IS TERMINATED, the shorter the longest relief many Barbadians will have about this stinking messy affair!!
However, there is ABOSLUTELY NO WAY in which any previous political regime should have sought to have got involved in the way that the former Owen Arthur led Government did in what is essentailly the domain of the private sector. NO WAY, peoples!! For, there is NO WAY in which the GEMS should have been so wickedly perpertrated and superimposed – as it was – on the established hotel and tourism sector of Barbados, esp. by a petty tamarind tree leader that knew very little about the actual operating of hotels in Barbados or in any other part of this world!! Mr. Arthur was warned about the stupidity of the GEMS, yet he obstinately proceeded to establish this monstrosity, mainly because he foolhardly felt that TAXATION was – and still is – the right type of political financial thuggery to help form the basis of support for the financing of the operation of GEMS. What is so damnedly clear to us in PDC is that with the establishment of the particular GEMS properties, there would have had be unfair competition meted out to some Barbadian hotels and primarily on the basis that such hotels would have been finding that part of their incomes would have had to be and will continue to be DEMONICALLY STOLEN by the state to finance, to some extent, the same damn GEMS sham. What a shame to have such mindlessness in existence in Barbados!!
Indeed, Mr. Owen Arthur should be CONDEMNED forever for this type and extent of misery that he would have helped to foist upon the poor masses and middle classes of people of this country.
Moreover, the relevant laws should have been long put in place by previous administrations, and only waiting to be enforced at this time, to compel Mr. Owen Arthur and a couple relevant others involved in the GEMS to PERSONALLY FINANCIALLY RECOMPENSE the people of Barbados for the sheer recklessness, incompetance and mismanagement surrounding the financial wastage and governmental disaster that the GEMS has long been and will continue to be in the eyes of many people of Barbados; with any failure of anyone of them to make the appropriate recompense, meaning a period of time in JAIL – the right comeuppance for such ignorant people!! Only with a future PDC Government in place in this country would such laws be implemented, however.
As well, this GEMS operation will continue to be an albatrossic burden on the backs of the long suffering masses and middle classes of people of Barbados who would have had ABSOLUTELY NO say in the development of this one of the worst pieces of evidence of the maladministration and misgoverance in the history of modern government in Barbados. The establishment by a future PDC Government of Constituency Assemblies to debate and pass the laws of Barbados shall surely act as presciptions aginst such autoritative behaviour by governmental and any other political leaders of this country.
Finally, what compounds this despicable state of affairs is that the financial system that we have here in Barbados has been conspiring to make the GEMS an even greater burden on the country, when it still remains to be seen that wicked evil INTEREST RATES AND INSTITUTIONAL REPAYABLE LOANS REGIMES are what are seriously disadvantaging the ability of the GEMS to function, even as an entity that ought NEVER EVER to have come into existence.
PDC
David // June 18, 2008 at 6:53 AM
The other question which accountants in the BU family maybe able to answer is the role of the Accounting House. Did they have a duty to highlight this matter as an ethical and moral responsibility?
Green Monkey // June 18, 2008 at 1:47 PM
A) “How Much Longer Is The Economic Folly Of GEMS Going To Continue?”
B) How much longer until Hell freezes over?
Answer question B, and you will have your answer to question A as well.
The scout // June 18, 2008 at 2:22 PM
The Gems talk has died, this gov’t got to deal with hardwood first. They will use the hardwood to break Gems jaws