According to Michael Hooper, general manager at the British Colonial Hilton, it is a difficult environment for big hotels to make money and a lot less money is being made in the Bahamas compared with other Caribbean destinations.
He cited things like wage costs, productivity, electricity prices among the contributing factors, which results in The Bahamas not doing as well as destinations like the Dominican Republic, Jamaica and Cancun.
Mr. Hooper said that while the hotel was performing reasonably well in the areas of occupancy, average room rate and revenue compared to other Hilton International properties – the hotel falls down in the area of profit percentage.
In an interview with the Guardian on Friday, Mr. Hooper said the recent announcement of layoffs at South Ocean Golf and Beach Resort should signal warning signs that all is not well in the hotel industry. This could result in other potential investors to the country wanting to reconsider the country as a viable investment choice.
“If they see existing investors having a hard time, then they might say: I’m not sure this is the place I want to invest my money.”
Mr. Hooper dismissed the idea that owners of the Hilton were actively searching for a buyer but conceded that if a good offer was presented it might not be turned down.
“The owning company along with RHK are developers and developers build to sell… I think they are committed to The Bahamas, however it (the right price) can affect anything.”
He admitted that the report given to the government citing a lack of return for Hilton investors revealed nothing that was not already being discussed on a weekly basis with the Hilton investors.
“We have always been talking about the fact that we need to be producing better returns.” He added that because the investors operate the South Ocean Golf and Beach Resort themselves, they realise the difficulty of this objective.
The British Colonial Hilton ended the month of September with 55 per cent occupancy, which while in itself is not good; it was very good compared to other similar size hotels operating in The Bahamas. “That’s not a good sign,” he added.
The current union negotiations that the Hilton is presently in the middle of were also cited as a possible “scare” for the hotel’s investors especially given the kind of increases the union is presently requesting, Mr. Hooper said. He described the current negotiation process, which the hotel began in August as slow.
“We started negotiations last August and we’re still negotiating.” He noted that while a lot of ground had been covered, “it’s the major financial stuff we are still trying to work out.”
He added that he hoped the negative news in the report and the laying of at South Ocean “might provide a kind of impetus for the union to say to the membership it isn’t that great.”
However, Mr. Hooper said despite the grim reality, the Hilton was still actively working to turn the situation around.
“We are doing a lot of things with internet companies and our own sales office to encourage more business,” he said.
By Martella Matthews, The Nassau Guardian
