Home Top Stories Now is best time to sell profitable Marriott Hotel – Jagdeo
As the Guyana Government moves ahead with the sale of the Guyana Marriott Hotel, Vice President Dr Bharrat Jagdeo says it is a “good business decision” to sell the property now before more internationally-branded hotels come on stream.
During a press conference on Thursday, VP Jagdeo confirmed reports that eight Expressions of Interest (EoIs) were received for the hotel thus far, which has been advertised since December 2022.
“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,” the Vice President states.
In a notice back in December, the National Industrial and Commercial Investments Limited (NICIL) has set January 10, 2023, as the deadline for interested persons to submit bids to be prequalified for the purchase of State shares in Atlantic Hotels Incorporated (AHI), the State-owned holding company for the Marriott Hotel.
AHI is the NICIL special purpose company that owns Marriott, a 197-room hotel that opened in 2015, 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. But that addition to the hotel was scrapped.
Interested bidders were required to have financial capability which NICIL had set as a minimum net worth of approximately US$250 million, audited financial statements for the last three financial years and letters of financial capability from a recognised financial institution.
AHI told another local newspaper earlier this week that the EoI applications were received from diverse local, regional and international companies and consortiums.
Jagdeo told on Thursday sought to respond to local reports of the hotel being controversially built and that the Marriott was unable to service the US$15.3 million from Republic Bank Limited hence the Guyana Government had to take over repaying the loan.
This, according to the Vice President, “…is factually inaccurate. The fact that [former Finance Minister under the previous APNU/AFC Administration, Winston] Jordan took over the loan, which we opposed to because we believed that it should have remained on the Marriott’s book, when we were in Opposition, and not be brought over [to the State], had nothing to do with Marriott being unable to service the loan.”
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’ monies to financing the hotel.
He explained on Thursday that this was a necessary move to catapult the hospitality industry in Guyana at the time.
“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,” he stressed.
According to the Vice President, now that the hotel is operation 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.
“There is no particular supreme benefit to government owning [the hotel]. Whether to maximise the money and invest it into something else …it’s a pure business decision [to sell now]… It is the period. You maximise the period in which you sell. This money, some of it will go to clear off the remaining loan and some will come to the treasury to be used back for whatever purpose is determined. And so, this is probably the best time when you can maximise the value before you get competition from seven other hotels coming into the market within a year or two,” he noted.
The Vice President also used the opportunity on Thursday to clarify that, contrary to reports in some quarters, he never owned the Marriott Hotel that was conceptualised under his presidency.
He outlined that every major project undertaken by a People’s Progressive Party/Civic Government has been deemed “controversial” yet these initiatives have gone onto bring massive benefits to the Guyanese population. Among these projects are the Berbice Bridge, the National Stadium, Arthur Chung Conference Centre and Hope Canal.
Jagdeo said even the much-anticipated Gas-to-Energy project will be considered controversial but at the end of the day, it will deliver stable and lowered electricity cost to the country as well as cheap cooking gas. He added same will be for the new bridge across the Demerara River.
“This Marriott, first of all, it was controversially built because people said it’s going to be a white elephant,” Jagdeo stated.
Nevertheless, the Vice President added that he is pleased that people are now seeing that “…the Marriott was a good decision and it’s a profitable venture. And without it, frankly speaking, I don’t know what we would’ve done in the last few years in terms of hosting people in this country.”
While in Opposition during the 10th Parliament, the APNU and AFC had individually criticised the construction of the Marriott Hotel. In fact, during the 2015 elections campaign, the coalition party had talked about selling off the multi-million-dollar tourism flagship project as well as making it into a hospital facility.
The US$58 million Guyana Marriott Hotel was completed in 2015, the same year ExxonMobil first found oil in Guyana’s waters. The hotel has since gone on to play an important part in Guyana’s developing oil and gas sector, as it being used to accommodate local and overseas offshore workers. It is also a prime venue to host numerous private and state-sponsored events. (G8)