Almost fifty hotel workers at the Clarion South Ocean Resort have been laid off and more could suffer the same fate as the fledgling property struggles against the odds to survive floundering occupancy rates and rising costs.
It’s a symptom of the hard times that the President of the Hotel Association of the Bahamas had warned of several weeks ago as some resorts on the island are suffering serious adversities.
A projected multi-million dollar cash loss at the South Ocean property for this fiscal year forced the layoffs and the temporary closure of almost 100 guestrooms at the sprawling site in western New Providence.
The resort has been plagued by poor levels of business for the past three years, according to Warren Adamson, president of the Caribbean Hotel Division of PRK Holdings Limited, the company that owns South Ocean.
“The Canadian pension fund, which has been supporting South Ocean from since it was originally acquired has put in multi-millions of dollars over that timeframe back to 1998, so they’ve been steadfast and true and have subsidised the cash losses,” Mr. Adamson explained in a telephone interview from his Canada office.
He added: “This year, for example, we expect to see a cash loss in the neighbourhood of $5 million and that exceeds the entire payroll for the year so I think they’ve been fair and true with respect to their support, but I think anyone would realise that you can’t go on like that forever so changes do have to be made.”
Forty-seven employees had been confirmed terminated as a result of the “right-sizing” exercise, which started last Thursday.
South Ocean officials have not disclosed as yet exactly how many more workers will be affected by the layoffs.
Mr. Adamson added that the downturn in travel following the 9/11 terror attacks had a significant negative impact on operations at the property.
“Not unlike many hotel investors throughout the world, the pension fund (that controls PRK Holdings Ltd.) has been victimised by the tragic events, which have constrained travel to international resort destinations, such as South Ocean Resort, since September 11th, 2001,” he said.
In addition to temporarily closing Gardenview guestrooms at South Ocean, management will focus on improving the resort’s golf course as a key strategy in improving South Ocean’s fortunes, it was explained.
“PRK has embarked on an ambitious program to restore South Ocean Golf Club to the high quality golf experience intended by its original architect, the late Joe Lee, who Mr. E.P. Taylor hired to design the course several decades ago,” Mr. Adamson said.
“Through contact with the Lee family, PRK has engaged Mr. Lee’s prot�g� of 30 years, Mr. Rocky Roquemore who will revisit his original work with Joe Lee. These improvements will re-establish South Ocean Club as the best test of golf in Nassau,” he added.
According to Mr. Adamson, South Ocean officials are hoping the cost-cutting measures will bear fruit within about one year.
“It’s really quite a lengthy process, but by the time we get into the high season of 2004/2005 we will have hit our stride and that’s when we will be able to begin to see how well South Ocean is doing in terms of our expectations and what sort of timing will prevail,” he said.
“Once we accomplish these goals and can demonstrate a reasonable return on investment we can then re-open the Gardenview guest rooms and, in turn, increase employment at South Ocean,” he said.
The hotel sector is not out of the woods yet, although certain lavish properties are enjoying outstanding success, Hotel Association President Jeremy MacVean had cautioned a few weeks ago.
He pointed to growing disparities in performance between certain properties in the Bahamas, reasoning that Kerzner’s success with its resorts here does not give an accurate view of the performance of other hotels that are struggling to stay afloat.
By Darrin Culmer, The Bahama Journal
