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Marriott racks up $60M loss in three months
Three months after Guyana’s flagship hotel opened its doors; it appears that business at the 197-room facility is not doing so well.
General Manager of the Marriott, Roberto Grisi. In background is Winston Brassington.
In fact, Marriott has racked up a $60M loss up to the end of June, Government officials confirmed yesterday.
The hotel was officially commissioned on April 15, last.
The state-owned hotel’s biggest expense is its electricity consumption. Its monthly bill to Guyana Power and Light (GPL) is in excess of $25M. This has been a major factor why construction of a critical component of the hotel- the adjoining entertainment complex- has not started.
Marriott’s electricity tab would contrast starkly with that of its nearby competitor, the Pegasus Hotel, whose electricity consumption averages $15M monthly.
Marriott also has a five-megawatt generator with the capacity to power the Kingston area. It has been using this from time to time.
Marriott, according to its plans, had anticipated that the hotel would generate income from its rooms, restaurants, bar and grill, fitness centre, vending areas and gift shop and from seminars held there.
Details of how well Marriott performed in filling its rooms and from the other activities were not immediately disclosed.
A feasibility study conducted by Marriott had catered for attracting customers from Pegasus Hotel. There were other projections.
General Manager of Marriott Hotel, Roberto Grisi, referred the majority of the questions to Atlantic Hotel Incorporated (AHI), a company owned and operated through the Government, and which owns the Marriott Hotel. AHI is headed by Winston Brassington.
“We don’t disclose that information. We can’t disclose any numbers because we have a management agreement that’s confidential between AHI and Marriott. AHI can basically disclose at the levels that they see pertinent,” Grisi said.
He contended that Marriott was “exceeding the numbers”.
Attempts to seek answers from AHI, which is a Government shareholder company, were futile, with Brassington’s office demanding the questions be emailed to Brassington himself.
The Marriott Hotel
It has not been a smooth road for the US$58M hotel, which first opened its doors with former President Donald Ramotar and former Finance Minister Dr. Ashni Singh cutting the ribbon. There were protests from civil society questioning the spending which was done without the approval of the National Assembly.
The hotel was hailed by the former People’s Progressive Party/ Civic (PPP/C) government as a special project designed to boost tourism and hospitality. But with questions over costs, and the secretive investors, the project remained under a shadow.
Among other things, the previous administration had been bent on transferring 67 percent control to a shady Hong Kong investor, despite the fact that almost all the monies spent were from Government coffers. The previous Government refused to entertain investment offers from local businesses.
The elections of May 15, last, put paid to the fact that the hotel can be transferred to any foreign entity.
The new government has signaled an intention to sell the Marriott.
The project experienced more hurdles when Parliamentarian, Desmond Trotman, filed a court case blocking the hotel from seeking to mortgage the lands and the hotel. In the end, AHI secured debentures to the tune of some US$27 million.
News that the contractor, Shanghai Construction Group, imported Chinese labour, with few jobs provided for locals and a slew of tax breaks and concessions to the hotel, raised the ire of the local business community which claimed that the situation created an unfair playing field, giving the Marriott brand a huge advantage over them.
But according to the General Manager, “Marriott doesn’t have a single concession as a company. The concessions are for the AHI Company.”
Marriott currently benefits from a 10-year waiver on Corporate, Property and Withholding Taxes, which came into effect from the first year of commercial operations.
The hotel has hired 235 workers, of whom five percent came from overseas. The General Manager also revealed that on the Executive Committee, the Directors of Human Resources, Engineering and Finance are all Guyanese.
Grisi was optimistic that with the advent of oil, Guyana’s economy would perform much better and create conditions for the successful operation of the Marriott. Already, Exxon Mobil employees have started utilizing the hotel.
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