THE BIG INTERVIEW: Confident Almond bid
Sun, May 06, 2012 - 3:44 PM
Canadian-born businessman Paul Doyle has big plans for the now defunct Almond Beach Village in St Peter. The owner of the luxurious Crane Resort in St Philip wants to transform the former all-inclusive property, which officially closed it doors last monthend, into a major luxury resort in the north.
But currently standing in his way are two other strong bidders – Jamaican business magnate Gordon “Butch” Stewart and local construction magnate Bjorn Bjerkhamn of Jada Construction Limited who both have plans of their own.
Nonetheless, Doyle is very upbeat and he tells Editor-In-Chief Kaymar Jordan that his proposal for ownership of the 30-acre property is “superior” to the other offers.
We understand that you have already put in a formal bid for Almond Beach Village but, on account of your attorney being ill, your full written offer will not be in before Monday. How are you feeling at this stage?
Doyle: I think that given that the Almond board has indicated that one of the key considerations will be the social and economic impact on Barbados, clearly our business model will be superior in that regard. Other than that, they are going to take in the financial considerations which they have to and we would just hope we are successful on that.
Earlier you reported that the hotel was in better shape than you had expected, but we are still hearing of a property valuation of $100 million. Is that the bid you have entered – $100 million?
Doyle: I guess you can say in that region, but our goal is two-fold. One, to rebuild the entire property over a period of time, more as an upmarket version of the Crane but at the same time renovate existing rooms so that we could be in business virtually immediately. So we would look to take a large part of the rooms, as much as half, and be in business, we would hope, within six to eight weeks after the decision is made.
So you are confirming that your bid is for $100 million?
Doyle: I don’t think it serves anyone’s purpose to put the numbers out. We have put in what we think is an excellent offer for the property and have an exciting plan going forward, and we are ready to roll.
We have got good designs for the overall long-term project, as well as a good understanding of how we could make things happen virtually immediately.
When do you expect to hear back from Neal & Massy in terms of whether you are successful or not?
Doyle: Well, they have basically said that they want to make the decision very quickly, as do we. If we are going to open this summer, marketing materials would need to be put together and all of that; so I think everyone is on the same page on this. We need decisions quickly and I think probably by the end of this week or at least by mid-month we would know where we are headed.
We are hearing that so confident are you, you have already been briefing your staff on the potential purchase. Shouldn’t you have delayed that until after Neal & Massy’s sale announcement?
Doyle: Well, we have had a team of staff working on this for some time, so they know the opportunity is there. We like to keep staff and management informed of what is happening and what is potential. You know staff of course read the Press and rather than having rumours going around, we thought we would share what we can share and, of course, it is nothing definitive. But every part of the team has been actively working on how they would make this work in the short term.
The real challenge for us is: what can we do to turn around business and start creating business for July?
We are also hearing that you have made some form of approach to the National Insurance Scheme (NIS). What do you want from them at this stage?
Doyle: I have already told you we are looking at a public offering in the later part of this year. We would never ask NIS to do anything that wasn’t in their economic interest, their business interest, in looking after the pensioners of Barbados. So whatever we would ask would be based solely on the merits of our financial performance.
But what does that mean in real terms? What is your proposal to the NIS?
Doyle: The key point is NIS, and this has been controversial. So I don’t want to [add to the controversy], but we would not ask NIS to do anything that they would not want to do as an investment on their own. So whatever proposal goes out has to be able to stand alone; and whatever social benefits, [they’re] icing on the cake. But the meat has to be based on the same thing with a public offer.
What I am proud of is our sales have steadily risen every year during a recession, our profits have remained intact [and] our retained earnings have steadily increased. So there is a good financial story to tell with good equity and good profits and a great management team.
On that basis we are going to be approaching investors in general to share with us in moving forward in not just this project, but all of Crane.
That being said, you are coming up against some formidable competition in “Butch” Stewart and Bjerkhamn. How can you be so sure that your offer is superior to theirs?
Doyle: We are proud of what we have done and we think that from a community point of view [we offer a benefit]. In terms of the local community, if you just drive through Speightstown you would see it is hurting and we think that sharing the business throughout the community is good for Barbados and particularly good for Speightstown in this case. And that speaks really to the all-inclusive model.
I am already on record as saying I don’t think that model is good for Barbados. I am not saying it should not be allowed. I believe in the free market. If people think otherwise, that is their business. But we had Sam Lord’s, and when it was a Marriott’s, there were little local businesses thriving outside the gates. When they decided to go all-inclusive, first all the local businesses were killed and then they died themselves.
The same thing in Almond. Speightstown was much more thriving in the Heywoods days [before it was called Almond Beach Village] and slowly has gone downhill. Now the whole property has gone down.
So I think that model has challenges for the community, particularly as Speightstown is outside the mainstream tourism belt. But I think as a historic city with historic buildings, it could be a wonderful tourism destination; but it needs tourists.
So our model will very much support that.
What about the proposal for hotel and villas?
Doyle: There are two issues with that. One is, what’s the split? And to the extent it is condos, there is very little social benefit, economic benefit in the community or to the economy long term. Of course, everybody has to build things; so that is a benefit. But I am talking about the next 50 or 100 years after that. The condo aspect doesn’t have the benefits.
So I think the more resort hotel component, the better; and in our case, we are 100 per cent resort hotel, as would be Sandals.
There is a view, though, that while having Crane take over would be good from a national development standpoint, having the name of Sandals or Ritz Carlton (through an association with Bjerkhamn) attached to Almond would be better for tourism marketing.
How do you respond to that?
Doyle: Well, I think Sandals was in the Press about two weeks ago in Turks and Caicos. They have just hired their 500th Jamaican and that is not going over very well in Turks and Caicos right now. So you really need to look at what’s good for Barbados if that’s the decision.
In terms of marketing thrusts, Sandals looks after itself, which is fine. So do we. No doubt they are extremely strong in marketing. However, the Barbados economy will necessitate higher costs than any of their other destinations. So I think that is something that they are going to have to grapple with.
Since you have brought nationality into it, what is your response to the recent suggestion by Bjerkhamn that Almond should go to a Bajan like him and not a Canadian like you?
Doyle: (Chuckle) I have been here 23 years. However, I don’t even think that in itself should be a requirement. Barbados is actively soliciting foreign investors to help boost the economy here, and I think to look at how long a person has lived in the country is very counterproductive.
I think business ideas need to stand on their own and only when you are short on ideas would you look to “I have been here longer than you have”.
Ouch! In terms of employment, you have said that you would generate more than what existed at Almond. Can you be more specific now that you have actually made an offer?
Doyle: At the Crane, we employ 1.8 people per room, and based on those numbers and what we will do at Almond, we would be employing around 900 people over time, and that is not counting in construction. There would be multiple restaurants, bars, spas and all of the amenities. And we think that would be good, not just for us but other developments in the area.
They are more interested, it seems, in straight real estate. We on the other hand, our model is that the real estate is very much part of a luxury resort environment and we are open to everyone, including people who have bought into other projects, which can only help.
How many of the 500 Almond Beach Village staff are you looking to keep?
Doyle: Some of my people have kind of gone through some detailed budgets on that, but I can’t give you a number. Let’s say if we have half of the rooms [to start with], we are not all-inclusive so it would be less than half, but it would be a sizeable number.
On the other hand, on the construction side, that is going to pick up; so there are going to be decent construction jobs but that is unlikely to be under a year, just from working through the Town Planning process.
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