Marriott project…Brassington seeks to outsource casino, restaurant and night club
Head of Atlantic Hotel Incorporated (AHI) Winston Brassington, has formally indicated that the casino, night club and specialty restaurant that would exist within the Marriott Hotel complex will not be included in the hotel’s management.
By way of an advertisement in the Tuesday, October 23, 2012 issue of the Guyana Chronicle (p.14), Atlantic Hotel Inc., said that it was seeking “expressions of interest from reputable organizations to outfit, operate and maintain” the three entities.
The advertisement stipulated that each may be operated individually or collectively, and that the first preference would be individuals or organizations already involved in the business.
Atlantic Hotel Inc., the company spearheading the Marriott Hotel project, said that it was “looking for operators who have already established themselves as a brand, regionally or internationally and can demonstrate extensive knowledge of the particular field of operation.” They must also have knowledge of local laws and regulations.
AHI has invited expressions of interest for the building of the casino at the proposed Marriott Hotel site. Offering 1,372 square metres for the casino, with more space on offer for the restaurant and nightclub, the advert smacks of a multi-million-dollar insult to the Guyanese public.
The advertisement brings more questions to the fore about the entire so-called Marriott deal. This latest advert can be seen to be giving away the goose that lays the golden egg, since the main revenue earners of the project, the casino, the night club and restaurant, will now be outsourced. This latest move by the National Industrial & Commercial Investments Ltd (NICIL)’s officers must be scrutinized.
The specialty restaurant will occupy 777 square metres; the casino (as indicated above) 1,372 square metres; and the night club, 595 square metres.
According to the current laws, no facility with less than 200 rooms can operate a casino. The Marriott is projected to have less than 200 rooms, but the government has already signaled that it would operate a casino.
Even more interesting, the hotel has not yet been constructed, and the main revenue earners are being divested ahead of construction.
One analyst said that if the government is the owner of the project, then how can it outsource this aspect without being transparent about the process? If the hotel will be funded by private equity, then how can the Government sell parts of it before building it? Which private investor will now be interested in buying in a hotel when the main revenue-driver is gone?
“If one follows the logic of the advertisement, the cost of the hotel (US$51million) is just for the building of the structure – and does not include the cost of the casino, night club and restaurant. The numbers of questions are increasing with each activity on this project that is shrouded in secrecy.”
“How much will be charged for the use of the facility? If the hotel costs US$51 million and investors require an average estimated 10 per cent rate of return on their investment, then the hotel has to make a minimum of US$5million per year,” the analyst said.
With the seasonal impact of the hotel industry and Guyana’s low tourist penetration, the hotel would be hard pressed to make this return and therefore may be operating at a loss, bringing the investors into problems – especially if those investors were to be the taxpayers of Guyana, he added.
Questions abound on this new move that can be translated as intent to run the hotel at a loss, unless one can assume that the casino/nightclub/restaurant management will pay a minimum rental to the Hotel that will exceed the US$5million per year.
When the government was seeking to divest itself of Sanata Textiles Limited it also sought what it called expressions of interest. However, this course of action was only taken after the government said that no one submitted a bid for the few buildings in the compound.
Dr. Ranjisinghi Ramroop tendered an expression of interest and secured the entire complex. There are reports that his consortium has been sold the entire complex.
The casino, restaurant and night club are the money spinners of the local hotel industry. Occupancy has not been a boon for hoteliers.