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Bids close today for sale of “profitable” Marriott Hotel
Kaieteur News – Today is the final day for the submission of bids for the sale of “profitable” Marriott Hotel.
The Guyana Marriott Hotel
The sale of the hotel was announced back in December 2022, and is being facilitated by the Government of Guyana through state agency, National Industrial and Commercial Investments Limited (NICIL). NICIL had created a special purpose company, Atlantic Hotel Inc. (AHI), to own the Marriott Hotel.
Chief Executive Officer (CEO) of NICIL, Radha Krishna Sharma, had confirmed to this publication that eight firms have submitted their Expressions of Interest (EOIs) for the acquisition of the hotel. The CEO had stated that several applicants had paid for and uplifted information packages and that the deadline for submissions of bids is on April 17, 2023.
During his March 30, press conference Vice President (VP) Bharrat Jagdeo stated that while the Marriot Hotel is “a profitable venture” and is “making a profit”, it is of no supreme benefit to the Government owning it anymore.
The US$60M hotel started under the Jagdeo administration when he was President using taxpayers’ dollars and with a syndicated loan through the Republic Bank Limited of Trinidad and had opened its doors on April 17, 2015. The Vice President said during his press conference that the proceeds from the sale of the hotel will be used, “to clear off the remaining loan and some of it will come back to the Treasury to be used back for whatever purpose is determined.”
Kaieteur News had highlighted that under the syndicated loan agreement, the preferred rights goes to those investors – meaning that in the event of the hotel being unable to service the loan – the unknown investors would have the first lien on the proceeds of any sale.
Jagdeo said that despite the hotel was started at a time when others touted it as “a white elephant”, the hotel is now a money-making machine. He explained that as a result of the Government being generous to help trigger a new wave of hotel building, “…there is no particular supreme benefit to Government owning (the hotel), it’s better to maximise the money and invest it in something else backing healthcare or maybe in another facility…”
The VP justified the Government’s reason for selling the hotel now by saying, “The Government didn’t need to own a hotel at that time, but the era was that we were not getting new hotels built and we had to trigger the investment. So now it would be best to sell the Marriott off, you would probably maximise the price that you will get when it’s profitable and before the seven new hotels that are privately built, that are internationals brands come on the market. It is the period you maximize, the period in which you sell.”
The Government has been reported in the media encouraging investors to build hotels as part of their plan to advance the hospitality sector in Guyana. There are seven new hotels being constructed. The new hotels are expected to meet a demand of around 2,000 rooms by 2025.
Back in 2017, AHI was unable to meet its due financial obligations to repay the syndicated loan. As such, AHI had requested the assistance of NICIL, the guarantor but the State agency was also unable to assist. In order to prevent the hotel from being acquired by the bank, the former Government in April 2017 made the decision to transfer AHI’s financial obligations to the Central Government. This decision has resulted in US$1.1 million ($226 million) of taxpayers’ dollars coming out every six months (since 2017) to service the US$27 million loan – for a 13-year period.
To this, the Vice President had stated during his press conference that while in opposition, the People’s Progressive Party Civic (PPPC) were opposed to the loan obligation being transferred to central government. Jagdeo claimed that the loan being burdened on taxpayers had nothing to do with the hotel being unable to service its loan.
- Bharrat Jagdeo, Guyana, Marriott hotel, maximise, NICIL, supreme benefit to the Government, v, Vice Prisident
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