Govt. forks out $220M every six months for Marriott’s loans

Mar 25, 2017 News

The loan repayments for the state-owned Marriott Hotel continue to be borne by Government as the Atlantic Hotel Inc. (AHI), the owner, does not have the monies.

Almost $450M is needed annually for Marriott Hotel to pay its loans to Republic Bank.

The Kingston hotel, according to Finance Minister, Winston Jordan, would have been obligated to fork out almost US$1.1M ($220M) every six months to Republic Bank Limited, for 13 years.
But since its opening in early 2015, the hotel has done poorly as a key money earner section- the entertainment facility- has not been completed.
The entertainment section was supposed to include a casino, nightclub and restaurant. The revenues from that section are what Marriott had been banking on to meet commitments, including loans, salaries, Marriott fees and utilities.
Since taking office in May 2015, the Coalition Government has been saddled with paying the amounts to the bank which has lent almost US$30M.
According to Minister Jordan yesterday, although the bank has given the hotel and government time to make the payments, the reality is that “time is not infinite”.
Currently due to the bank is almost US$750,000 ($150M). The expense is an unbudgeted one for the administration, the minister said yesterday, but the monies have to be found.
AHI is that state-owned company that controls Marriott.
The hotel was birthed by the previous Government but there were questions about the risks involved and the financing structure which give control to private investors despite Government spending the bulk of the monies.
While the hotel is currently making monies on its restaurant, rooms and conference hall, it will never make enough to meet expenses unless the casino and the other entertainment sections becomes a reality.
The 197-room hotel was completed are more than US$50M with real cost for lands and other concessions estimated at more than US$80M, critics of the project say.
Government has been mulling selling it.