Govt. footing RBL loans is tantamount to subsidies to Marriott chain- hoteliers

Mar 29, 2017 News

News that the Government of Guyana is forced to fork out over US$1.1M every six months to service loans at Republic Bank Limited (RBL) on behalf of Marriott Hotel is not going down well for a number of hoteliers.

Local hoteliers have upped pressure for the administration to sell Marriott after learning that Government has been forced to dip into taxpayers’ dollars to pay almost $480M annually in loans.

On Friday, Finance Minister Winston Jordan disclosed that Government has been intervening in the almost US$30M payments, with the bank being asked to flex on repayment.
However, the time for any payment delay has come to an end. The bill will have to be footed by the treasury unless the Kingston-based hotel manages to complete its adjoining entertaining centre ,which through its casino will generate enough revenues to pay its commitments.
Yesterday, a number of hoteliers said that for the Coalition government to use taxpayers’ dollars is in fact unfair competition.
“The wealthy international chain should have been required by any responsible Government to pay an annual rent for the property to support its business in Guyana instead of being subsidized by the poor Guyanese taxpayers,” a prominent hotel owner said.
With more than 20 hotels dotting the city and its environs, the anger has been real.
The hoteliers who say they will seek an audience with Government, made it clear that it is grossly unfair to the operators of local hotels, the majority of which go to the bank to finance their operations.
”Marriott pays no corporate taxes, no property and other taxes, earns massive management fees on the hotel’s sales, contributes nothing to the local economy and now our taxpayers are being asked to pay the loans on the property,” a spokesperson pointed out yesterday.
”Marriott ignores all needed maintenance of the property to maximize its management fees, underpay local staff and treat them with contempt. Where is the justice? The way forward is to sell the hotel property, cut future losses and stop the bailout.”
The hotel was opened in early 2015 by the previous administration and was touted to bring quality rooms to Guyana.
Over US$50M was spent but with concessions, land costs and other expenses, the final price could well be in excess of US$80M, critics say.
The hotel is owned by Atlantic Hotel Inc. (AHI), a state-owned company. More than US$20M was spent by the government through the National Industrial and Commercial Investments Limited (NICIL), a government company that oversees investment and which is the parent company of AHI.
There have been much criticisms of the project and the financing structure, which although the majority of the monies were being spent by the State, the controlling interests were going to private parties.
While business at the hotel has been picking up, it will never be making enough to pay creditors unless it opens its entertainment center, complete with the casino.
Leading up to the May 2015 elections, the then Opposition, now in Government, had vowed to make moves to sell the hotel.