Date: December 2017
Location: Barbados, The Caribbean
Name: Barbados Hilton, Bridgetown – four star
No. of Keys: 350
Seller: Following a sale with no advertising, Barbadians are questioning the sale of the Hilton Barbados Resort. The majority state-owned hotel was reportedly sold for less than its value to English property management firm London and Regional Properties.
Since Barbados’ independence in 1966, the Hilton property was publicly owned by taxpayers. However, the government of Barbados hasn’t provided any explanation for the property’s low sale price. While the government did announce its plan to sell the 350-room hotel to rebuild the country’s foreign exchange reserves, the Nation Newspapers released the sale price of the property at Bds$160 million.
Chris Sinckler, the minister of finance in Barbados, announced the plans to sell the hotel in May as part of the 2017-2018 budget, claiming that the property was valued at Bds$200 million. “If a successful bid is accepted, government is expecting to receive no less than Bds$100 million as the net proceeds from the sale, taking into account the liquidation of existing debt liabilities attached to the property,” he said in a statement.
However, the Nation Newspapers reported that no Barbadians were aware of an advertisement for the sale before the property was sold, and also claims that Sinckler is undervaluing the Hilton. After the Bds$27-million worth of shares and investment to the National Insurance Scheme, the public fund for workers’ unemployment, sick benefits and pension, the hotel was actually worth Bds$253 million. The NIS, who determined this estimate through an independent study, believes that an $11-million renovation that took place in early 2017 boosted the property’s value.
The group also claims that the government’s earnings after paying off loans and expenses, which the finance minister calculated, were inaccurate. After NIS shares and loans are included with the hotel’s other loans, there will only be some Bds$33 million left over for the government to collect following the sale.
Buyer: L&R, owner of The Royal Fairmont Royal in Barbados and many other fabulous hotels around the world (14,000 rooms). Interesting that the Hilton deal is not yet announced on their website. So maybe not such plain sailing…
Price per Key: at B$253m – B$722,857 (€302,975 – which seems par for the course) so the Govt claim of B$100m does seem pretty of order!
THPT Comment: something not quite right here! The fact that this Hilton is only four star, would suggest that the hotel has not been well maintained under government ownership… and not a great TripAdvisor set of reviews