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.

Almond Resorts At The Cross Roads

Submitted by Adrian Loveridge

“Too big to fail’ was one of the many emotive headlines appearing recently and relating to the future, if any, for the Almond Resorts group. Of course the statement could be right. 836 rooms spread across three hotels, which gives the potential of a massive 305,140 room nights annually. Even at an average occupancy of 80 per cent, with two persons staying in each suite for 7 nights, that could amount to almost 70,000 long stay visitors per year.

Already for the summer, Barbados has seen a dramatic decrease in airlift with Virgin, British Airways and Air Canada all scaling back and perhaps more to come with American Airlines. Unless other existing properties, whether hotels, condominiums or villas could absorb what amounts to over 1,300 guests weekly, further flight reductions would be almost inevitable.

The question that seems still to be begging is how was the current Almond Resorts situation was allowed to get to this stage?

Is Almond Too Big To Fail?

Arthur Lok Jack, Chairman of Almond (l) Ralph Taylor, CEO of Almond (r)

The Almond Resort saga although in the news is competing with the CLICO, REDjet, and other issues which get top billing because of the political dimension attached to them. That is if we measure based on the court of public opinion. In an earlier blog comment BU suggested that the tourism sector should be managed as a strategic asset. If there is a doubt about the criticality of Almond to the sector there is a simple equation which paints a vivid picture – Barbados Room Stock (6000) minus Almond Room Stock (600) = 5400. This translates to a 10% reduction in the national room stock net of Almond. To extrapolate, conservatively  the 10% equates to 1000 direct jobs and after factoring the multiplier, the number grows to 2000 people displaced if Almond were to close its doors. The final piece of the analysis and as important is the need to factor that Almond is a forex generating enterprise which means opportunity cost has to be factored as well.

Why the country has not become emotionally connected to this issue is symptomatic of how displaced as a people we have become in ordering our priorities. Some may cite a lack of vision by today’s leaders to chart a path for the kind of country [avoided the use of the word society which as become so politicised as to lose its meaning nowadays] we want to build.

When Ralph Taylor was appointed Chairman of the Barbados Tourism Authority (BTA) BU joined a few who criticised the appointment. Almond was on the decline then and commonsense should have dictated that the hotel required his undivided attention. On a related point, BU also criticised the appointment of CEO of the BTA David Rice whose background is in hotel operations and not sales. What recommended him for the job appears to be the fact that he is a buddy of Ralph Taylor. [fodder for another blog].

Almond Resort Inc Should Be Asked WHY By Barbadians

Click image to read expanded version

Can anyone explain why a hotel operating in Barbados in the year of our Lord 2011 would believe they need to apply for work permits for the positions of Director of Food and Beverage, Executive Assistant Manager and Director of Hotel Operations? The question is being asked against the background of a nation whose number one business has been tourism.

BU has come to the conclusion that the practice of issuing work permits by the Chief Immigration Officer is a routine matter. Now that the hullabaloo has abated regarding how immigration matters were being dealt with in Barbados under the previous government, things have quietly returned to a business as usual culture.

Can the Chief Immigration Officer explain why the positions above and others we have seen in the local media in recent weeks are being entertained?

What is so special about the jobs advertised by Almond?

Are Barbadians objecting to work permits being issued?

Is the Chief Immigration Officer obligated to make public disclosures on how work permit processing is done?

Let the record show BU objects to the above positions being filled by Almond Resort Inc.