MARRIOTT SHOULD TELL US WHAT THEY KNOW ABOUT THIS PROJECT

Jun 29, 2010 Features / Columnists, Peeping Tom

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I am proud to know that my country has been chosen as the place to build a hotel that will carry the Marriott name. This is another plus for Guyana.
The proposed hotel also looks classy, at least on canvas. When I saw the design of the hotel, as shown in an artist’s depiction of what it will look like when completed, my heart skipped a beat.
In fact it skipped two beats. The first was because I was dumbstruck at the thought that Guyana would have such another fantastic structure to add to the many that have sprung up since the PPP came into office. For a long time we had boasted only one international hotel which was always only quarter filled and which had for decades de-emphasised tourism.
Then we built another beautiful hotel but which has never enjoyed good occupancy rates. The hotel to be built on the Georgetown foreshore will be something else. I can just imagine how happy my friends would be to know that Guyana has a Marriott. Some of us cannot even afford to dine at a Marriott overseas. The construction of this hotel will be another opportunity for us to surpass ourselves. This is fabulous news. No wonder my heart skipped a beat.
But after that heart stopping, excitable episode, reality sunk in. I began to wonder whether the good folks at Marriott have considered the state of the hotel industry in Guyana before agreeing to attach their brand to this hotel. I wonder whether they are satisfied that this hotel is not going to turn out to be a white elephant.
Right now there are two major hotels in Guyana, the Pegasus and Princess Hotel. None of these hotels can be said to be enjoying anywhere near an acceptable rate of occupancy.
The tourists and the guests are simply not there to fill these and the hundreds of other small hotels that have sprung up within the country. The only time in this country when the hotel industry enjoys a boom is when there is cricket or some major international conference.
The cricket season and the international conferences come far and in between.
So it is extremely surprising that another international hotel with a casino is going to be erected. It will take some bold investors to put money into this project.
Perhaps, at the Marriott they know something that the vast majority of the people do not know or anticipate because there is nothing on the horizon to suggest that hotel occupancy in Guyana is going to improve in the next couple of years so as to make it feasible to open another international hotel.
This is why the folks at Marriott need to explain just why they feel that this hotel will be a success. And even if they are just going to brand a hotel, they certainly would not wish to affix their name to an enterprise which is likely to become a white elephant.
The folks at the Marriott must take the Guyanese people into their trust. They must explain the basis for their own confidence in the hotel. They must indicate why they think this hotel is going to be a success. They must explain how they think it is going to be profitable.
They also need to conduct a due diligence on the investors to this project. They must not assume that because the government is supportive and may be part of any cluster of investors in the project that this is sufficient guarantee.
Marriott has an obligation to protect their global brand and should therefore insist on due diligence of all the investors in Atlantic Hotel Inc. who will be responsible for the hotel.
The Marriott should also pay attention to the cost of this hotel. The owners should recognise the inexperience and poor track-record of the government in dealing with foreign investments and should therefore ensure that this hotel is not overpriced.
There are many unsuspecting investors who sink their money into projects that turn to be overpriced. In the end, these unsuspecting investors, including taxpayers, end up paying for the hotel while others hitch a free ride because the project is overpriced and they virtually get a free pass in return for equity which was never spent.
No one also wants to pay $64M for a house that costs $18M. This is waste of money but when taxpayers’ monies are involved it can also become a way of channeling public funds into private hands. This is why it is important that both the sponsors of this project as well as the government get the pricing right.
Another hotel of this magnitude does not seem to make any sense at this time or in the foreseeable future. Why would anyone wish to build such a hotel at this time and just who are behind the construction of this hotel are questions that the Marriott should seriously consider before they lend their brand to this project.
The secrecy that has surrounded the building of a hotel at that location and the paucity of information that has so far been made public do not make anyone feel confident about this deal. But perhaps Marriott can change all of that by taking the public into their trust and justifying the feasibility and cost of the project and by certifying the sources of funding for the project.
This responsibility should normally fall on the government but to wait for the government is to wait a very long time for answers that may never come.

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