A closer look at the Marriott project

Dear Editor,

A great deal of discussion has already taken place in the media on the merits of the proposed Atlantic Hotel Inc. (AHI). I offer brief comments on somewhat neglected areas only. There have been no feasibility studies.
The occupancy rates in the hotel plants in Guyana (particularly Georgetown) are low partly because too much additional capacity was created for Cricket World Cup a few years ago.

The initiative and drive for the 197-room five star hotel has therefore come from the Government of Guyana, rather than private hoteliers. The decision would conceivably have been based not so much on positive direct benefits and a reasonable rate of private return, but rather on potential indirect socio-economic benefits.

These could include employment creation at the construction and operations stage (provided the foreign/local labour ratio is not too high); linkages creation with the construction materials, food, recreational and other services industries; higher hotel standards setting (including new products like ‘convention tourism’ and other external economies. However, the Government has not seriously sought to justify the project in these terms and a feasibility study, supposedly done by an American firm on behalf of the Government, has not been made public.

Rather, a strongly held view is that one of the main reasons for the venture is the government’s desire to dent the fortunes of the country’s current premier hotel whose owner (Badal) had fallen out of favour with ex President Jagdeo and his friends who were outbidded a few years ago by Badal in a previous hotel deal.

Other areas in need of attention are: Unsatisfactory Finance and Contractor Arrangements and Operation and Management and Management Arrangements
Finally, although the Government made available some agreements and contracts, it has yet to make available the Management Contract that will be made with Marriott.
The fees charged will be another important determinant of the project’s financial outcome. It is traditional for there to be both a base fee and an incentive fee.

Carl Greenidge