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Marriott success hinges on Guyana finding oil
…Brassington deliberately withholds section of feasibility report
…80 per cent of Pegasus bookings linked to business not tourism – Study
The feasibility study done for the Marriott Hotel in Georgetown, lambasted the Pegasus for its purported substandard service. It also labeled Princess International Hotel as unattractive, for a significant portion of the country’s business and Government travellers.
The report has included in its projections for the success of the Marriott Hotel, that “we have assumed” that a portion of the nation’s economic development initiatives are realized.
The Marriott Hotel under construction.
The report says, “These include but are not limited to the cultivation of a portion of Guyana’s crude oil.”
This would mean that included in the factors that would make the Marriott feasible for the country is the need for Guyana to find oil.
Chairman of Atlantic Hotels Inc, Winston Brassington, last week released only a section of the report, which begs the question, ‘Why withhold a portion of the document?’
The study was undertaken by HVS Consulting and Valuation out of Miami, Florida in the US. That company said that it would need Brassington’s permission to release the full report.
The extract of the feasibility study that was released to the media, revealed that an analysis of the occupancy levels of the Pegasus and the Princess International Hotel were also conducted.
What the study has uncovered, is that 80 per cent of the bookings at the 130-room Pegasus Hotel is linked to commercial activities or Government-related business, while only 10 per cent can be linked to leisure activities.
The Guyana Government has been selling the Marriott Hotel as one directly linked to the tourism market.
The Pegasus while described as inadequate, does recognize the hotel as the city’s most prominent hotel which was formerly operated as Le Meridien before it was de-flagged in November 2008.
The report said that “the Princess Hotel is outside of the central business district and thus not an attractive option.”
It was found that between 2009 and 2011, the average room occupancy at the Pegasus was 62 per cent, while bookings at the Princess averaged at 52 per cent.
Tax Free
The report has also documented that a tax agreement has been executed with the Government of Guyana to provide a range of tax benefits to the Marriott Project.
Included in the agreement signed onto, Marriott will enjoy a 10-year waiver on corporate, property taxes which will commence from the first year of commercial operations.
The Marriott Hotel will also enjoy relief from import duty, VAT, excise tax and any other import fees, taxes, duties on machinery, equipment, building and other materials, fixtures and fittings and furnishings and non-luxury vehicles required by the developers for the construction of the Project.
During operations, relief will be granted from duty and excise tax on capital repairs or replacements greater that US$10,000 in value within 10 years of operations.
Construction cost of the Marriott Hotel, according to Brassington, stands at US$58.5M.
An unknown private investor with US$8M investment will be in control of 67 per cent of the hotel and will also control the Board of Directors.
The table below outlines the financing structure put together by former President Bharrat Jagdeo, Dr. Ashni Singh and Winston Brassington:
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