The Adrian Loveridge Column – GEMs a Lesson in Squandermania

Adrian Loveridge

Adrian Loveridge

In an article carried by the midweek Nation on 24th February 2010 the declared value of the then three remaining GEMS hotels were stated at BDS$ 74 million plus an accumulated debt of $229 million. With a total of 244 rooms that values each room at $303,278 when averaging it across the Hotels and Resorts Ltd properties.

Recently it was announced that a prominent private sector player had acquired Time Out for $7.5 million. With 76 rooms, this equates to well under $100,000 per room, less than a third of the valuation stated seven years ago or almost $16 million below book price.

Hotels and Resorts Ltd currently only operate one remaining hotel, Blue Horizon and the financial state of that property is a complete unknown as no audited accounts have been made available to the taxpayers, so we are all left to guess what other negative trading liabilities there could be.

The new owner of Time Out has had a long and seemingly successful history of managing and operating hotels and other tourism services for decades, again apparently without all the concessions granted to highly restricted chosen few. I personally have no doubt that after considerable upgrading the newest St. Lawrence Gap acquisition will be no exception.

Our insurers recently quoted a replacement or new building cost for a hotel of between $1,500 up to $2,000 per square foot, so perhaps this is a more realistic way of attempting to value open and functional properties.

This latest sale also takes us, the people who financed the Government of the day disastrous foray into hotel ownership and operation almost to closure. We can again only speculate what these hundreds of millions of squandered Dollars on GEMS could have done, if instead they had been invested in creative and cost-effective marketing of the destination, in terms of increased arrival numbers and job creation across the entire sector.

What is also often forgotten is the systematic predatory pricing policy practiced by Gems over years of operation to the detriment of the mostly small hotel private sector players, who then took considerable time to restore viable room rates and anything close to profitability, essentially needed to maintain and upgrade properties on a regular basis.

From our own experience we saw Silver Rock Hotel closed under the St. John family with a minimum room rate of US$120 per night and after tens of millions of taxpayer monies were ploughed into the property and a considerable number of rooms added it re-opened at rates as low as US$80. When eventually it returned to the private sector, property transfer tax for the new owners was waived by Government, again giving a fiscal advantage not available to most other hoteliers.

While this tragic and costly affair in the history of our tourism sector cannot now be rectified, perhaps it will remain as the worst kind of example of Government’s ‘playing’ with our main foreign currency earner and remind every politician that sometimes it is better to let market forces prevail.

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19 Comments on “The Adrian Loveridge Column – GEMs a Lesson in Squandermania”

  1. Violet Beckles CUP March 6, 2017 at 4:47 AM #

    GEMS? Was MIA not in that Fraud? We heard but no know?

    Like

  2. Vincent Haynes March 6, 2017 at 11:42 AM #

    A good article on how political agendas do not always coincide with the countries developmental goals.

    Like

  3. John Walmark March 6, 2017 at 11:54 AM #

    when governments in any country try to run a “business” in the private sector, they always are sink hole for swallowing up taxpayers hard earned money.

    Like

  4. Vincent Haynes March 6, 2017 at 12:05 PM #

    I am not convinced that running a business was that govts objective with those hotels hence it was doomed to fail even more than its other “businesses”.

    Like

  5. Keep it Real March 6, 2017 at 12:32 PM #

    Wasn’t Rodney Wilkinson of the invisible cars and Owen Arthur’s right hand man at the time part of this initial GEMS Scam?

    Like

  6. David March 6, 2017 at 12:40 PM #

    What is the latest with Wilkinson’s court case?

    Like

  7. David March 6, 2017 at 12:41 PM #

    And yes BU recalls OSA making a change to the auto rental regulations to create a benefit for that sector. Not sure what to make of it. Pack of corrupt lot.

    Like

  8. Vincent Haynes March 6, 2017 at 12:49 PM #

    David

    Chuckle….you should not speak such of the BBEs newly annointed massiah….hahaha.

    Like

  9. lawson March 7, 2017 at 7:10 AM #

    An Englishman told me he got spotted dick in one of the hotels in the gap.

    Like

  10. Alvin Cummins March 7, 2017 at 8:48 AM #

    Lawson,
    Enlighten me. What is “spotted dick”?

    Like

  11. Simple Simon March 7, 2017 at 9:38 AM #

    https://en.wikipedia.org/wiki/Spotted_dick
    Spotted dick is a British pudding, made with suet and dried fruit (usually currants and/or raisins) and often served with custard.

    It is made from a flat sheet of suet pastry sprinkled with dried fruit, which is then rolled up into a circular pudding.

    The dish is first attested in Alexis Soyer’s The modern Housewife or ménagère, published in 1849, in which he described a recipe for “Plum Bolster, or Spotted Dick—Roll out two pounds of paste … have some Smyrna raisins well washed…”. The Pall Mall Gazette reported in 1892 that “the Kilburn Sisters … daily satisfied hundreds of dockers with soup and Spotted Dick”.

    The name has long been a source of AMUSEMENT AND DOUBLE ENTENDRES, to the point that the catering staff of Flintshire County Council decided in 2009 to rename it to “Spotted Richard” because of all the jokes they were receiving. While “spotted” is a clear reference to the dried fruit in the pudding (which resemble spots), “dick” is more obscure. The word was widely used as a term for pudding in the 19th century; in late 19th century Huddersfield, for instance, a glossary of local terms described “Dick, plain pudding. If with treacle sauce, treacle dick.” It could alternatively be a corruption of the word pudding, evolving through puddink, then puddick, then finally dick. Another possibility is that it is a corruption of “dough”.

    Like

  12. Simple Simon March 7, 2017 at 9:45 AM #

    @Adrian Loveridge “remind every politician that sometimes it is better to let market forces prevail.”

    I won’t happen as long as politicians have “friends” whom they love deeply, whom they love beyond reason.

    And every politician has such “friends”

    Our current Prime Minister has “my friend Leroy Parris, he is not a leper”

    Owen Arthur had his Rodney Wilkinson.

    Back in the day Erroll Barrow has his Joy Edwards.

    And even now no doubt “friends” are eyeing Mia.

    Like

  13. Simple Simon March 7, 2017 at 9:48 AM #

    And haven’t we since then seen Rodney in handcuffs on the front page of the daily paper (or maybe it was the back page) as the Nation’s back page is often more interesting than its front page.

    Like

  14. lawson March 7, 2017 at 2:35 PM #

    Alvin just threw that out there as a joke, SS is right a pudding , but it would have a lot of people checking if they had it

    Like

  15. Piece Uh De Rock Yeah RIght - INRI March 7, 2017 at 5:16 PM #

    @ Adrian Loveridge

    The issue here is that CARIBBEAN governments ARE TO GOVERN AND ARE NOT TO GET INTO RUNNING BUSINESS because they, having bastardized government and governance have by some warped rationale sought to incorporate the act of doing business by some type of eponymous absorption.

    They, true anonymous mice, to coin Carl Moore’s phrase, as make believe “business men”, believe that they can experiment with business initiatives WITH THE BACKING OF THE STATE.

    So, armed with the people’s resources they fund several business enterprises, all of which are doomed BECAUSE (a) they lack the grey brain matter to effect the idea in normal circumstances (b) the pool upon which they rely – snivel servants simply do not have the expertise to effect the initiatives and (c) from the onset what was envisioned by each successive minister is how to get their equally inept cuntstituents work and ultimately sell off the asset to a friend e.g. GEMS, the Transport Board, Ionics, Hilton and the plethora of nationalized and then de-nationalized projects that abound.

    Do you know the genesis of GEMS?

    Some time back when Almond was being sold out the staff of the property got together and put a proposal to run the hotel.

    The proposal disappeared and some time later GEMs of Barbados was formed using the exact proposal that the staff provided.

    So it was nt to empower anyone other that the Minister of Tourism and the rest of the cronies who were and are abysmal failures at business whether in their personal or their ministerial positions

    THis is why Bajans, including you, if you have the right to vote, have to vote out the DBLP cause they are BOTH the same

    Like

  16. Simple Simon March 7, 2017 at 10:05 PM #

    Anybody remembers Eastry House?

    After this business owned by a politically connected family had failed did not the BLP use tax money to rescue this family and to saddle the taxpayers with a non performing asset?

    Piece is right.

    BLP/DLP same damn party.

    Like

  17. David March 10, 2017 at 9:01 AM #

    Airbnb raises $1 billion in new financing

    The home-sharing site says two rounds of fresh funding over the last six months will give it "operational flexibility." The peer-to-peer start-up is now valued at $31 billion (29 billion euros).

    Airbnb Logo (Imago/STPP)

    Airbnb Inc said it has added $447 million (421 million euros) to the $555 million it took in funding in September last year, according to a filing with the US Security and Exchange Commission.

    The $1 billion in new investment helps value the online room renter at $31 billion.

    Airbnb, which operates in more than 65,000 cities, has enjoyed tremendous growth as it pushes ahead with its plans of global expansion.

    The home-sharing site became profitable in the second half of last year before accounting for interest, tax, depreciation and amortization, according to a company source.

    The source told the Agence France-Presse news agency the new funding will give the start-up "operational flexibility."

    No IPO

    The source added said Airbnb has no plans to launch an initial public offering (IPO) "any time soon."

    One of the most prominent members of the so-called "sharing economy," Airbnb has raised more than $3 billion since being founded in 2008. But it’s yet to reach even half the market value of the ridesharing giant Uber, which is estimated to be worth $68 billion.

    The company is locked in an global battle with regulators who say the service takes affordable housing off the market and drives up rental prices.

    Several cities including Barcelona and Berlin have launched legal action to restrict the start-up’s expansion.

    Over the past year the start-up introduced travel experiences to its range of rooms and homes to rent, and has partnered with a restaurant booking platform to allow users to book dinner from its app.

    Watch video 01:30

    Trouble in paradise: Airbnb undercuts hotels in Curacao

    mm/uhe (AFP, Reuters)

    Like

  18. Hal Austin March 10, 2017 at 9:07 AM #

    Let the hotels compete. They have been protected for too long.

    Like

  19. Piece Uh De Rock Yeah RIght - INRI March 10, 2017 at 9:57 AM #

    @ The Honourable Blogmaster

    De ole man does not tink dat I am unique nor do I tink dat i is bright.

    What i do know is that certain ideas cannot be presented before their time to swine BECAUSE when the people to whom you present the ideas CANNOT COMPREHEND WHY YOU HAVE TO PUT ON SOCKS, BEFORE YOU PUT ON SHOES, you got an effing problem.

    Here is the thing that i am going to respectfully suggest to you regarding the “home sharing initiative” and which anyone can ask Steve Devonish and Gabrielle Springer about.

    Before any of those people even entered the arena 20 years ago, that suggestion was tabled to the two of them when the latter was at the Ministry of Toruism.

    But we are a nation of Brassbowl idjuts who, unless it ensues from the United States of America or the backside of Avanash Pursued-the.Four-Season-Deal-for-a-Few-Million-Dollars-dat Mugabe Mottley shared in, it WILL NOT FLY

    Simply because they cannot see it.

    But here we are in 2017 with somebody else profiting on the concept while valued at US $31 billion while we have devalued Government Bonds and a rating akin to a failed state.

    Yet you and I contesting about supporting the BLP solely because we have a two party state as opposed to competencies, integrity and VISION

    Like

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