Evaluation team to assess 2 new offers to buy Marriott Hotel – VP Jagdeo

– says after assessment, team will make its recommendations to Govt

A decision on the potential sale of the state-owned Guyana Marriott Hotel will be made after the two new bids that were submitted earlier this week are assessed by an evaluation team.
This was revealed by Vice President Bharrat Jagdeo on Thursday at his weekly press briefing.
Last month, the National Industrial and Commercial Investments Limited (NICIL) received six bids ranging from US$25 million to US$65 million to purchase the Marriott Hotel, located in Kingston, Georgetown.
However, Government felt that those were “too low”, and decided not to pursue any of them. NICIL then wrote the six companies, informing them that a base price of US$85 million was set, and as such, recommended that they resubmit bids reflecting this new figure.
Only two of the six companies responded by the May 16, 2023 deadline. New offers were received from X, LLC at US$90 million and Integrated Group Guyana Inc at US$86.1 million.
According to the Vice President, the next step is to have these two new bids assessed before a decision is taken on the sale of the hotel.
“I don’t know what [that decision will be, at this point]. When they go into the details of the bids, [I don’t know] what the evaluation team will find, but they have an obligation to assess the bids and then make a recommendation to the Government,” Jagdeo pointed out.
He highlighted that if the Government had gone ahead with any of the first set of offers submitted for the Marriott Hotel, then it would have lost out on as much as US$35 million in revenues from the sale of the property. The Vice President has maintained, “We’re not gonna sell this hotel for less than US$85 million.”
During the initial bidding round, the highest bid of US$65 million was received from X, LLC, an American investment group founded by Ramy El-Batrawi. The company’s website says its primary focus is to invest in, and enhance, target industries.
Among the other bidders were Pegasus Hotel Guyana, which bid at US$55.5 million; Georgetown Investments and Management Services Inc, which bid at US$50M; Muneshwers Ltd, which bid at US$25 million; Integrated Group Guyana Inc, which bid at US$55 million; and NCB Capital Markets Limited, which bid at US$33 million.
The Guyana Marriott Hotel, which opened in 2015, was constructed to the tune of US$58 million. A feasibility study conducted by a Miami-based firm, HVS Consulting, back in 2010 had outlined that the Marriott Hotel is likely to be sold ten years after its operationalisation at some US$76.1 million.
Vice President Bharrat Jagdeo has contended that the Marriott Hotel would not be sold until an “appropriate offer that mirrors” its true value is made.
“We know what a true value will be in the current context. So, that matter should be put to rest, that we will not proceed with any of the bids because we believe that they’re too low based on the value of that asset now and its capacity to earn,” Jagdeo stated last month in response to the initial six bids.
The Government’s rejection of the initial bids submitted had attracted criticisms from some quarters. In response, however, the Vice President argued that Government is not obligated to accept the highest bid.
In a notice back in December 2022, NICIL had announced its intention to sell the State’s shares in Atlantic Hotels Incorporated (AHI), the State-owned holding company for the Marriott Hotel.
AHI is the NICIL special purpose company that fully owns the 197-room hotel, whose financing structure had depended on a casino and entertainment centre to make enough money to repay up to US$30 million in debts to the banks and other creditors.
Those add-ons to the hotel were scrapped. The hotel opened in 2015, the same year ExxonMobil first found oil in Guyana’s waters, and has since gone on to play an important part in Guyana’s developing oil and gas sector. It is used to accommodate local and overseas offshore workers, as well as serve as a prime venue to host numerous private and State-sponsored events.
It was against this backdrop that the Vice President argued that now is the right time to sell the hotel, which is currently operating at a profit even without the casino and entertainment centre add-ons.
“Now it would be best to sell the Marriott off. You could probably maximise the price that you will get when it’s profitable, and before the seven new hotels that are privately [being] built, that are international brands, come on the market…within a year or two,” he had stated.
The construction of the Marriott Hotel, which started in 2011, had sparked widespread controversy. At the time, Jagdeo was the President, and his Administration had faced heavy criticism over the use of taxpayers’ money to finance the hotel. But Jagdeo has always defended the decision.
“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… There is no particular supreme benefit to Government owning [the hotel],” he has emphasised.
According to the Vice President, the hotel is operating at a profit and provides some 500 jobs to Guyanese, directly and indirectly. He insists that selling the Kingston, Georgetown hotel now would bring in “maximum value” to the State, that could go towards triggering other investments in the country. (G-8)