A bailout plan is needed in Guyana, too!

Oct 14, 2008 Features / Columnists, Peeping Tom

Hotels are going up in Guyana; going up for sale!
Instead of the hospitality sector expanding, it is shrinking. Most of the resorts in Guyana are facing hard times because of low occupancy.

One of these resorts, once described by a regional prime minister as a paradise, is up for sale. Others may soon have to make a decision about how long they can maintain themselves in the red.

The domestic market is far too small and poor to keep these resorts afloat. Unless there is a huge injection of tourists into Guyana — something that requires proper planning — then these resorts will inevitably have to close their doors.

This will be a tragedy for Guyana, since anyone who has been to one of these resorts will tell you that they are quite magnificent.

The hotel industry is in far worse shape than the resorts. One of Guyana’s most beautiful structures, Buddy’s International Hotel, has been sold, while investors are eyeing up the Pegasus Hotel. Both of these hotels have suffered from low occupancy rates.

Another hotel built for Cricket World Cup 2007 is on the market for sale, while many others are seeing little or no occupancy.

What we have in Guyana are a great many white elephants, because the private sector was led to believe that Guyana would benefit from CWC 2007 and that the exposure this event would provide would lead to a boom in the hospitality sector.

There never was a bubble. CWC 2007 turned out to be a flop, and the boom in tourist arrivals never materialized. Hundreds of Guyanese, who invested on the basis of what they were led to believe by the Government, lost billions of dollars.

Sadly, they are watching as their investments go bottom- up in Guyana; and there is no bailout plan, not even for the hundreds of families who renovated to the tune of hundreds of millions to provide bread-and-breakfast services for the tourists who never came for cricket and who have not come since.

The Rio Summit, the Commonwealth Finance Ministers Meeting and Carifesta have come and gone and have not impacted on the profitability of the hotels. Billions of dollars of investments are being left as white elephants.

A few years ago, the rice sector found itself in problems with the banks, and the Government offered a billion-dollar bailout package to farmers.

I have heard of no such package for the hotels in Guyana, which I believe deserve to be compensated by the Government for the losses they have had to carry because of the pipe dreams they were sold about how Guyana would be transformed following CWC 2007.

The Government cannot leave these investors out in the cold. It should work with them, now that they are in deep problems, in the same way that it offered concessions to them to be established.

The Government should work with these investors to find alternative uses for their buildings, so that at least some return can be forthcoming on investments.

It is clear to me, though, that a great many of these hotels will have to be put on the auction block, and therefore the Government should try and work with the owners to find alternative uses for these buildings.

I really am baffled as to why any of the investors behind that huge hotel to be built near to the former Luckhoo Swimming Pool would wish to make such an investment at this time in Guyana.

Even though it is mooted that the hotel is likely to have a casino for gambling, I really cannot see how such an investment can yield a profitable return.

I really cannot see hundreds of thousands of persons coming each year to Guyana just to gamble, given the many alternative venues they have around the Caribbean.

The President did promise that, upon the turning of the sod, the names of the investors would be announced; but, from the way things are going, that sod may not be turned for some time yet.

Yet, a great deal of land, including the former Government Analyst Department, has been levelled to prepare for this hotel. My question is: if this deal flops, what happens to this land?

Is it going to be put up for sale? Or is the land going to be re-claimed for historical purposes, as is being advocated in some quarters?

Already, taxpayers’ monies have been expended to dig up Battery Road and lay sewage pipelines. On the basis of this expenditure alone, the people of Guyana need to be informed as to just who is behind this hotel, and just when construction is going to start, if at all.