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Sunday 18 November 2018
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Magdalena Grand not making money

JOINT Select Committee (JSC) chairman David Small says the core business of the The Magdalena Grand Beach and Golf Resort in Tobago needed to be fixed and the vision for the hotel reassessed.

He was speaking yesterday as the Joint Select Committee on State Enterprises met with officials of eTecK and representatives of the Trade Ministry at the Parliament building; the hotel falls under the remit of eTecK.

Small said the consultant’s report was an “unvarnished assessment” and was “brutally honest” and suggested there should be some scaling back of the thinking and vision for the Magdalena.

“It has to be a different type of hotel if we want it to be financially viable.”

He said while some may consider the Magdalena a three or four star resort, the physical condition did not say that. He pointed out the revenue per available room (RevPAR) for Magdalena declined from US $98 in 2014 to US $55 in 2017 which was “really below par.” Small said he looked at other hotel groups operating in this country and they had an average RevPAR of US $131.

“If Magdalena is at (US) $55 it is way out of the market.”

He said, for every dollar earned by the Magdalena the operating cost was $1.60 or $1.70. Small stressed this was the case even when the hotel had good occupancy in 2014 and 2015.

“Something is wrong in the core business operating.”

He said the Trinidad Hilton, in contrast, was doing much better when it came to revenue and operating costs as well as retention of employees despite having a union. He added the Magdalena had lessons to learn from the Hilton.

JSC member Fazal Karim asked how aggressively Magdalena was being marketed with the current state of the airbridge and the seabridge.

ETecK vice president Corporate Services Maureen Singh said the initial consultant report had been selected and a long-term operator was being sourced, which eTecK officials believed was the only way to turn around the resort financially.

She explained in the short-term eTecK was looking at measures to address the effectiveness and efficiency of the hotel and ensure the cost of operations was held tight.

ETecK chairman Imtiaz Ahamad said for the last two years the company had commissioned many jobs, renovations and repair works on the hotel and while these and flights were good, there were bigger issues of the tourism sector and Tobago, as a tourist island, needed to have direction.

Small said the air lift, international transport and transport between Trinidad and Tobago all needed to be improved.

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