The Private Sector Commission (PSC) supports the establishment of the Marriott Hotel in Guyana but believes that more disclosure by the government regarding its involvement in the project would be useful.
The PSC said in a statement yesterday that the government should also have ongoing consultation with all stakeholders. “We also believe that appropriate consultation should be ongoing with all stakeholders and that evaluations of all projects are necessary to ensure reasonable return on investment over an acceptable period,” the statement said.
According to the PSC, the introduction of the Marriott Brand will have a significant impact on the tourism, airline, general service and other sectors of the economy. “The impact of additional international branding will have a positive result for the country as customers loyal to their brand will be attracted,” the statement said.
“It is also expected that the presence of a major international chain will create outward linkages to the international hub utilizing the Marriott Chain,” the statement added.
“While we at the PSC welcome the Marriott-Brand Hotel to Guyana, we believe that more disclosure would lend to a greater appreciation of the dimension of government’s involvement in the overall project,” the statement said.
Chief Executive Officer of the Pegasus Hotel, Robert Badal, in a recent letter to the press, called the government’s proposed US$20 million investment in the Marriott Hotel a misuse of taxpayers’ money and an indecent assault on the local private sector.
He said too that if the government was genuinely interested in improving the hospitality industry, it would make resources available to the local operators even if with strict conditionalities.
When Chairman of the Private Sector Commission Ramesh Dookhoo was asked by Stabroek News about the government using taxpayers’ money to invest in the project, he said the government has an investing agent NICIL which utilizes revenue other than taxpayers’ money. “The government of Guyana other than those revenues that come from the payment of taxes has an investing company called NICIL which acts on behalf of the owners in all government investments.” According to him, NICIL would be responsible for managing the dividends that the government would get from entities such as GuyOil, GT&T etc based on rules governing the institution.
According to him, investments in hotels, airlines etc often bring “off-book good” to a society and he noted that countries like Jamaica and Trinidad and Tobago have benefitted from this. He said that the investment should be understood within this context.
He explained that the PSC’s call for more disclosure is aimed at creating confidence and achieving greater understanding of the investment.
Meanwhile, asked about Badal’s argument that hotel occupancy locally is low and that instead of competing, the government would be better off pouring resources into developing infrastructure to encourage visitors, Dookhoo pointed to such investments made by the government. He identified improvements at the Cheddi Jagan International Airport, Timehri and the conversion of Ogle into an international airport as two such positive developments. The privatizing of interior air transport, regularizing of river transport by private operations, building of the stadium, bridges and highways as well as investments in the electricity and water sectors were also identified by Dookhoo as positive developments.
Meanwhile, he said low occupancy rates needed to be contextualized with profitability and high break evens. According to the Private Sector Chairman, profitability of a hotel also depends on other activities in the establishment such as restaurants, bars, special nights etc.
Speaking specifically about the Pegasus Hotel, Dookhoo said that the hotel is “doing extremely well” and remains the number one hotel in Guyana. “Its service is still on par with international standards,” he said, while noting that there have been improvements at the hotel. He suggested that once there is more competition in the hotel industry, “the market will become more differentiated adding to the industry’s total intake.” He said if the sector grows, individual growth will come via the introduction of business strategies.
Dookhoo pointed out that the Government of Guyana had started to negotiate for the Marriott hotel since 2006 and that thereafter it sent out expressions of interest for investors. Meantime, the PSC in its statement, also said that there is a need for local hotels “to seek international certification for their services for larger operators” on one hand and “the need for a separate set of standards for the smaller hotels and guest houses” on the other.
President Bharrat Jagdeo during a recent press briefing lashed out at Badal for his criticisms of the proposed investment in Marriott and said that the businessman was just afraid of new competition. He also criticized the state of the Pegasus Hotel and said that it needed to be refurbished.
Badal, in a subsequent letter to the press, pointed out that he had borrowed money to invest in the hotel and said that the President should ask the private partners to borrow money instead and invest in the hotel.
During his press conference Jagdeo said that the government may or may not put money into the project depending on the number of partners in it. He said that there were several entities interested in investing in the hotel but no decision had been made as yet.
