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Almond Beach Village update

Derbyshire, United...
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Almond Beach Village update

An update on the Almond Beach Village situation......

"Buying Back" by Roy R. Morris

Two days after dissolving Parliament and calling elections for February 21, Prime Minister Freundel Stuart will sit with his Cabinet to “agree” to buy back the Almond Beach Village and its brand name for almost $110 million.

The plan, being piloted by Minister of Tourism Richard Sealy, calls for a US $10 million refurbishment project, after which the sprawling 400-room facility will be turned over to former staff, who have submitted a plan to operate it.

In so doing, Government has effectively rejected three private sector proposals to the current property owners, Neal and Massy Ltd of Trinidad and Tobago — from Paul Doyle of Crane Resorts, real estate developer Bjorn Bjerkhamn and Sandals Resorts International of Jamaica.

According to sources, while the Doyle plan would eventually lead to an upgraded 500-room facility, the “build-out could take years and depend on the sale of time share and will not protect the island vital airlift from the United Kingdom or significantly increase long-stay visitors.

And while Bjerkhamn plans to demolish the property and build a high-end hotel and condos around a marina, with public recreational facilities and high-end shopping, it would not protect airlift or significantly increase long-stay traffic.

On the other hand, while Government appears disposed to the Sandals option because of its capacity to increase long-stay visitors, protect airlift and increase the island’s tourism visibility, while injecting almost US $800 million into the economy over five years, it was worried about the negative impact of demolishing the property and taking three years to rebuild it. Government also has reservations about the fact that it calls for a US $248 million injection from Government.

Listed as Option 4 — Government’s proposal, Cabinet is expected to be told:

“The Ministry of Tourism believes that the proposal by Sandals Resort International is the best of the three… However, there is now an even more urgent need to bring the Almond room stock back into production as recent estimates show that as many as 1,000 rooms in Barbados are currently out of production. This will make it difficult to achieve growth in the 2012/13 winter season and beyond.

“In view of the urgency of this need, it is now proposed that Government seek to immediately acquire Almond Beach Village property and the Almond brand name with a view of reopening in an effort to supplement room stock for 2013 and beyond and to achieve the twin objectives of:

“Increasing the number of long-stay visitors that come to Barbados each year; and protecting existing airlift in critical source markets.”

Minister Sealy is expected to tell his colleagues that while prominent hotelier Bernie Weatherhead has expressed an interest in running the property, “the proposal from former employees is to reopen the entire hotel under the Almond brand after renovations over a three-month period. It therefore represents a.....................................

*Continued on Pages 4 & 5

www.barbadostoday.bb/2013/01/30/buying-back/

Barbados
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1. Re: Almond Beach Village update

It would be interesting to see if this ever materialises, seeing that the Parliament of Barbados was dissolved on Monday, and elections are due February 21st. This, IMHO could only happen now if the current government is re-elected. This is an issue which needs to be debated in parliament.

Burlington, Canada
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2. Re: Almond Beach Village update

Maybe but the government of the day still runs the country, so they use orders in council to move things along. So they might still be able to do something. In reality it's a vote grabbing proposition.

All someone has to do is ask the very simple questions. Where is the money going to come from and at what cost? What does this say to potential investors who want to invest but now have to worry about a government grab? Would their investment be safe from a government takeover? Not appealing at all on any level.

But as stated on another post "It's the Silly Season".

Bridgetown, Barbados
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3. Re: Almond Beach Village update

What a complete shambles this current government is!

And this statement " However, there is now an even more urgent need to bring the Almond room stock back into production as recent estimates show that as many as 1,000 rooms in Barbados are currently out of production. This will make it difficult to achieve growth in the 2012/13 winter season and beyond." makes me wonder what rock they have all been hiding their heads under for the last couple or more years???

They are absolutely hopeless - but I suppose now by issuing this statement they are guaranteed votes from the 500 or so ex ABV staff...

Absolutely ridiculous!

London, Canada
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4. Re: Almond Beach Village update

Do the "former staff" have the expertise and business knowledge it takes to run this type of operation successfully?

Christ Church...
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5. Re: Almond Beach Village update

I think someone has to do the maths here. The Barbados Today article indicated ABV attracts 25,000 guests per year. 395 rooms with an average stay of 7 nights and two persons per room would relate to an annual occupancy rate of 61 per cent based on quoted number.

In the last year or so of ABV being in operation, the hotel was dramatically discounting room rates including selling through GROUPON, which in some cases, after 50 per cent commission, would have given them a net room rate of around US$60 per night all inclusive.

If it re-opens, it is going to be very tour operator dependent and I very much doubt they would (even after BDS$10 million refurbishment) will achieve an average room rate of more than US$150 per night.

395 rooms X 365 nights X 61 per cent occupancy X US$150 per room would give an annual turnover of just over US$13 million. Could this justify an 'investment' of BDS$110 million?

Bridgetown, Barbados
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6. Re: Almond Beach Village update

Agreed Peach & Quiet... the whole idea smacks of ridiculousness to me!

London, UK
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7. Re: Almond Beach Village update

Neal & Massy are the ultimate owners of the village. They will make a commercial decision on the its future based on the proposals before them - a decision now due within 2 months (so June 2013). Unless the Barbados Government has some special powers they probably cannot force a sale to them. They can however put a lot of obstacles in the way of any other prospective purchasers. A lot of supplies at the village were auctioned off in April 2013 and the infrastructure will have deteriorated in the past years and months. It would take an experienced operator some months to get the village operating again while the local people and politicians would like the village to operate as it did before, they have to recognise that it was heavily loss making. So something has to change.

The government are concerned that visitors are not coming, and that threatens the number of air flights which in turn threatens visitor numbers. Employment and tourist related trade generally suffers if tourist do not come. The tourist authority have been promoting a deal on tourist activities in recent weeks in the form of vouchers for money off trips and activities.

Not an easy one for the Government, and I suspect that Neal & Massy do not have the government/workers plan as their best option - probably its at the bottom of their list.

Sudbury, Canada
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8. Re: Almond Beach Village update

I agree the property is in quite a state. I was there Feb and March and saw few if any security guards. Parts of the complex were a mess the pools had shallow stagnant dirty water in them, the buildings are old and look very 'tired and dated' some of the 'gardens' were overgrown, sundecks rotted through etc.. I read, I think on TA, that the hotels occupancy rate was only 60-70% last high season. With Virgin going to a smaller aircraft, Air Canada doing the same and dropping from 2 daily flights it's obvious the number of tourists going to Barbados is in decline. How wise is it to dump another 400 rooms onto a struggling market?

Bridgetown, Barbados
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9. Re: Almond Beach Village update

Yes I would agree that N&M are probably looking more for an outright sale and I doubt dealing with the government here is going to bring them that and to be perfectly honest where the current government are going to get the money from to invest anything, I have no idea! Apparently many government workers were not paid last month I have heard! - so not a good situation.

With regard to tourism, this current government has never really "got it" about the tourist industry and until they do I doubt much will change...until we get a change in government hopefully in 4-5 years time.

Sudbury, Canada
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10. Re: Almond Beach Village update

I agree Scary regarding the government lack of insight and expertise in the tourism industry. They have again demonstrated that with their botched launch and poorly thought out Barbados Island Credit scheme. Too bad the Barbados people didn't realize how important tourism is to their well being and prosperity and instead decided to re-elected them last Feb..