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The Magdalena Grand Hotel, suffering losses and low occupancy, is expected to get a new long term operator by October, says Evolving Technologies and Enterprise Development Company (eTecK) chairman Imtiaz Ahamad.
Ahamad did so yesterday when eTecK management appeared before Parliament’s State Enterprises Committee at the Parliament Building in Port-of-Spain.
Ahamad said the two main areas of concern for the company were the Magdalena and slow tenanting of its Tamana Industrial Park— eTecK’s heaviest “burdens.”
Ahamad said since the Magdalena reopened in 2012 it has operated at a loss and money was injected into it.
The company’s acting president, Maureen Singh, agreed the situation was “abysmal.” There were 10 years of consecutive losses—$400 million— and increased staff costs from $5 million in 2011 to $20 million in 2012 when it became fully staffed.
It closed in 2011 for renovations and reopened in 2017. Occupancy had been low, but was around 35 to 40 per cent in 2016/17. Still, Singh said it’s performed better than other Tobago hotels at this time.
Ahamad said efforts were made to engage a new person to manage Magdalena, but the person’s CV was not favourable and this is yet to be completed.
“There are also a number of challenges regarding Tobago tourism and hotel occupancy,” he noted.
Ahamad, however, said the hotel won’t be sold. He said Cabinet had agreed to offer a new contract to the current management provider and that eTecK will also meet with a committee comprising the Finance and Tourism Ministries and Tobago House of Assembly (THA) to seek a new long term operator.
“The due date for start of the long term operator is the end of October (2018). This is one of the key strategies to move things forward and put it in a less urgent position,” Ahamad said, adding an operator will aim to raise occupancy levels to 70 per cent.
While he was careful not to say the initiative will reduce Magdalena’s negative situation, he said the long term operator was recommended to bring it up to an acceptable standard.
“But other options will also impact on tourist arrivals in Tobago - that’s out of our reach,” he added.
Singh, who said occupancy was based on the Tobago tourism industry, noted visitors to the island moved from 88,000 in 2005 to 18,000 in 2017. She said recent air/sea bridge transport problems have also affected occupancy and supplies there.
Ahamad said eTecK expects a summary report of possible new operators by June and the committee will discuss it and get the best options back to eTecK to enter negotiations.
The company sourcing the operator— CBRE (Hotels), a foreign hotel consultant— met the committee and is due in T&T next week to deliver an interim report.
“That will guide us. I support not selling it. A lot of money has been spent to upgrade it and it’s in a better state than a few years ago,” Ahamad added.
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