PEOPLE AND THINGS: Economic democracy
It is often said that the greatest opportunities present themselves in times of adversity. Consistent with this argument is the recent announcement by Neal & Massy that is seeking to dispose of its three major hotel properties here in Barbados, which include Almond Beach Village in St Peter.
A proposal of this nature is normally associated with closures, job losses and a poorly performing asset, all of which are not good for this economy and the more than 1 000 people employed by the three entities cumulatively.
In this regard, however, we have almost simultaneously heard of a proposal to “rescue” the flagship Almond Beach Village by route of an ingenious employee investment scheme which naturally excites me.
The details of the scheme are at this time sketchy and are perhaps not relevant to this preliminary discourse, but it would appear as though the type of arrangement that allowed the staff of Transport Board’s maintenance department to establish United Commercial Autoworks Limited (UCAL) is being explored. This could potentially economically empower more than half of the ordinary staff members of the resort company.
This type of empowerment is likely to be a flower of slow and tender growth that would also need to be fertilized by several environmental factors that are yet to be determined. However, the feasibility of the project is already being hampered by what appears to be a propaganda campaign that seeks to condemn the viability of the project even before it takes flight.
The suggestion from some quarters that Almond Beach Village has been an economic millstone around the neck of the Almond group has to be examined in the interest of fairness and equity since the assumption that this is true would have implications for the type of economic enfranchisement central to this discussion.
Almond Beach Village is a facility well known to Barbadians since it was originally the Heywoods Hotel, conceived by the Errol Barrow administration as a tourism project to empower Barbadians.
It was to some extent controversial since it was purchased by the Government in 1978/79. The property fell into private hands in 1994 when it became part of the Barbados Shipping & Trading group and subsequently the Neal & Massy empire.
In his last CEO’s report in 2010, Ralph Taylor indicated that Almond Beach Village suffered substantially because of the company’s inability to upgrade the product.
In tourism terms, that plant is a “fossil” and will inevitably lose money unless it is being marketed as a antique-type property, which is an entirely different type of arrangement.
The need to refurbish it must be obvious to the present owners who are not new to this industry which demands that properties be refurbished every seven to eight years to remain competitive.
In a statement to shareholders last week, the Almond board of directors said support for the funding of the Village beyond the current tourist season is “highly unlikely” and that without critical funding the operation of this hotel beyond the high season would appear to be unsustainable.
The Almond board’s message also indicated that Almond Beach Club and Almond Casuarina are in a better position to sustain themselves independently and may remain viable beyond the high season.
Against this background, the options that emerge are clear and worthy of reflection from a national perspective since tourism is our livelihood. In its present state, the Village is unlikely to be purchased to be run as a functioning entity, which means that if Neal & Massy is able to secure a buyer for the three properties, the Village would likely become a valuable piece of real estate for immediate or future purchase.
Sadly, we are familiar with this type of option since that is precisely how Paradise Beach Hotel was viewed when Gordon “Butch” Stewart purchased it from the Cunard Group and promptly closed it since this was a far cheaper option than undertaking the expensive refurbishment at that time.
Arguably, an investor who can afford to purchase such a hotel can also afford to wait a few years while his investment matures in this less-than-buoyant market, and thereafter dispose of such a property with a reasonable profit.
This option works for the wealthy investor, but does little for Barbados, which loses potential foreign exchange, as well as valuable jobs.
In the case of Paradise, there have been ripple effects on the Black Rock environment and economy that have persisted and provide an adequate reason why it would not be in our interest to allow another major hotel property to languish in the north of Barbados, especially as there is major redevelopment taking place just north of the Village.
It is entirely possible, although unlikely in this environment, that a purchaser will come along with sufficient liquidity to buy either the entire group or the Village alone and invest sufficiently in refurbishments for it to continue as a functioning entity.
If this does happen, the concerns outlined above become irrelevant. However, this would also to my mind represent an opportunity missed for us to bring this investment home to the workers who made it the excellent location that it is today.
In life one often finds that adversity facilitates the emergence of opportunities that would otherwise not be available. This is perhaps one of those unique opportunities for the staff of the Almond Beach Village and we can only hope that any initial negative publicity does not scuttle this opportunity for economic enfranchisement.