The Radisson Cable Beach Resort is “financially hemorrhaging,” having incurred an operating loss of $3.5 million last year with a projected loss of around $12.5 million for this year, Prime Minister Perry Christie said today.
The increased losses are being attributed to the damage caused to 150 rooms by Hurricane Michelle last year, Mr. Christie said. Those rooms have been closed since November, 2001, suffering a monthly loss in revenue of $1.5 million per month.
“The former government left office with the insurance claim still outstanding, with no plan in place to renovate the 150 damaged rooms, a leaking roof, and with the hotel management contract, which expired last February, unsettled,” said Mr. Christie, who announced a new board for the Hotel Corporation of the Bahamas.
The prime minister said his government also found a grossly overstaffed 700-room hotel in which the number of employees had increased from 700 in 1992 to 950 ten years later.
“The new board is now having to correct this situation by arranging funding to arrest these massive losses, stopping the financial haemorrhaging, settling the insurance claim, carrying out the urgent renovations in time for the approaching winter season, and dealing with the outstanding management contract, while finding a suitable buyer for the resort.”
The property is worth around $100 million, said the Minister of Financial Services and Investments Allyson Maynard-Gibson, but she said she doubts the government would be able to get that much for the resort.
Mr. Christie said the new board, which is chaired by George A. Smith, former Member of Parliament for Exuma, will be impeded in carrying out its duties because of “unwise decisions” by the former FNM Government, which he said depleted the reserves and revenues of The Hotel Corporation.
The Prime Minister said up until 1998, the Corporation collected up to $20 million annually from casino fees under the provisions of the casino management agreements.
With these fees, the Corporation was able to fund the acquisition of properties, build renovate hotels and carry out other touristic activities, he said.
“However, in 1999, by administrative directive from the then government, the Corporation was directed to cease collecting casino fees,” Mr. Christie said. “This was done even though the Corporation was prevented by the government between 1999-2002 from collecting over $50 million in casino fees.”
He said the then government almost depleted the Corporation’s cash reserves by ordering $16 million to be paid into the Consolidated Fund to meet the government’s shortfall in revenue.
Mrs. Gibson said the board has been mandated to “stop the massive haemorrhaging being suffered” by the Hotel Corporation.
The board must also arrange a sale for the Radisson, which continues to lose money.
The board will also play a pivotal role in the continued growth and development of the tourism industry through aggressive promotions of tourist and other developments, especially those on the Family Islands .
She revealed that a five-star resort chain is interested in operating a property in South Eleuthera , which has been limping economically due to the closure of resorts there.
“To carry out this mandate, we need a visionary board with wide-ranging expertise,” she said. “I am happy to say that the ladies and gentlemen assembled here are experts and all are visionary.”
The deputy chairman of the Hotel Corporation is Dr. Baltron Bethel, who also serves as Investments and Tourism Development Consultant in the Ministry of Financial Services and Investments.
Mr. Bethel was the first Bahamian director general of tourism.
Other board members include: Debi Williams-Hancock, a corporate lawyer; Pat Mortimer, a businesswoman; Archdeacon I. Ranfurly Brown, Rector of Christ the King Anglican Church; Alphonso Smith, chief councillor of the North Andros District Council; Annischka B. T. Holmes, financial analyst; and James Catlyn, an experienced tourism professional.
