THE state-owned Magdalena Grand Hotel in Tobago has had an occupancy rate of just 35 to 40 per cent over the past two years, Eteck acting president Maureen Singh told Parliament’s Joint Select Committee (JSC) on State Enterprises on Monday, at Tower D, Wrightson Road, Port of Spain.
Asked about this low occupancy rate by Opposition Senator Dr Lester Henry, Singh blamed it on a fall on visitor arrivals to Tobago, which, she said, dropped from 88,000 in 2005 to 18,000 in 2017.
Henry pressed, “Is it just that problem or is there something else?”
David Small, JSC chairman, also voiced his concern at the hotel’s lack of profitability.
“It seems there is some other problem or combination of issues that is causing the hotel to perform so horribly.
“On the face of it, even if you double your occupancy you’re still running a marginal operation. That shouldn’t be.”
Singh replied, “We conduct regular audits, but based on the feedback from the committee, we’ll conduct a more in-depth study.”
Asked by member Fazal Karim if eTeck had calculated a dollar value to the Magdalena’s losses attributable to the collapsed seabridge, Singh said no, but affirmed the collapse has affected the hotel. Otherwise, Singh estimated three quarters of the $14 million debt owed to the hotel is recoverable.
Asked by member Wade Mark the cost of upgrading the Hilton Trinidad, eTeck’s assistant vice-president Solange Henry said so far $518 million had been spent, exceeding the initial budget of $484 million. Singh told Mark the final cost of upgrading the Hilton pool was $7.6 million (up from an initial estimate of $6.6 million.) She said the upgrade was due to an HSE issue, the deepest end of the pool being 16 feet deep.
Mark asked, given the Magdalena’s”massive losses” since 2008, if it will be sold, but eTeck chairman Imtiaz Ahamad said no, said a new management plan will be put in place and there are plans to seek a new operator by October.
ETeck’s liabilities included a $488 million bond in 2010 for the Hilton, a $160 million loan for the Vanguard (now Magdalena), and a $148 million loan for Eteck’s Tamana Park.