Close to 300 workers at Almond Beach Resort may be on the breadline come April next year when work is expected to begin on the Beaches Resorts at the property at Heywoods in St Peter.
The state-owned Barbados Tourism Investment Incorporated (BTII) said it would not renew its lease with Sandals Resorts International (SRI), the operators of Sandals and Beaches, when the contract expires next year.
General Manager of Almond Resort Craig Smith told Barbados TODAY the initial lease was supposed to run for 15 months only, but three years later the BTTI continued to operate the property, causing much uncertainty year after year.
“The problem is the uncertainty because we are due to close next April. Each year we have heard that we have been extended, so again we are going into a year of uncertainty,” Smith said.
“Right now we are leasing the property from Sandals . . . and they will be developing a Beaches property there with construction to commence around April next year. Come April we need to be thinking about vacating the premises,” added BTII Chief Executive Officer Stuart Layne of the property, which was bought by Government under a memorandum of understanding with the then owners Neal & Massy Holdings, and leased to Sandals to manage under the Beaches brand.
SRI chairman Gordon Butch Stewart had told Barbados TODAY in 2014 that construction would begin during the second quarter of 2015 and would last for 22 months.
However, work on the project has been delayed for a number of reasons, the latest of which was the decision by SRI to expand the Sandals resort at Dover, Christ Church. That project has now morphed into Sandals Royal Barbados, an all-suite property.
Last September SRI Chief Executive Officer Adam Stewart told journalists gathered here for the Caribbean Tourism Organization’s State of the Tourism Industry Conference that it could be another three years before Barbados welcomes the much-anticipated Beaches hotel.
Stewart said then while the St Peter hotel remained on the cards, the decision on development of the property came down to financing and strategic business planning.
“We are a company that is not a hotel management company. We raise our own debt, we pay our own debt, we never faulted on a debt service payment,” he explained at the time.
“By virtue of that, the opportunity to buy the land beside Sandals Barbados, the Dover Estate, took priority over Beaches to get an existing property and get it to scale that would be a world class resort, second to none anywhere in the region.
“Beaches will come behind that but it has put a year’s delay in the Beaches plan putting it to probably 2019 officially.”
The London-headquartered international news agency Reuters recently reported that Sandals had hired investment bank Deutsche Bank AG to explore several options, including the sale of majority stake in the company, adding that Sandals could be worth well over $1 billion, including debt.
Sandals has neither confirmed nor denied the report, only issuing a statement to the Jamaica Observer newspaper stating that SRI was “exploring options to accelerate the company’s long-term growth and development plans. This is not new. Meanwhile, it’s business as usual”.
The Sandals chairman had declined to comment when Barbados TODAY pressed him on the reports and whether the sale of the company would impact the highly anticipated Beaches project.
Tuesday, Layne also shied away from the subject, stating there was no official word on any proposed sale.
“I don’t know of any sales of Sandals. There was a story in the press suggesting that certain discussions may have occurred, but at this point we have no information that any plans are being changed in any way,” the BTII boss told Barbados TODAY.
Meantime, Smith told Barbados TODAY the company was anxious to have a property at a different location after making way for Beaches.
“[The brand] Almond is actually owned by BTII . . . and we’re very anxious to continue the brand. It has been very good to us; there is a lot of brand equity and we are very hopeful that we will be able to continue operation at a different location,” Smith said.