Newstead Belmont ‘Bad News for Bermuda’

January 19, 2011

simons-cole[Written by Cole Simons, Shadow Tourism Minister]

The takeover of the Belmont-Newstead hotel operations is bad news for Bermuda.

It closes out a fully Bermudian operation. It casts doubt on the Island’s tourism viability. It raises concerns about other hotel properties and the bank’s own obligations. And it makes us wonder whether the Government has marched Bermuda to the brink of tourism collapse.

There is plenty of blame to go around for this sad situation, but there is no doubt the Government’s failure to make tourism work lies at the bottom of it.

There are two points in this regard:

One is the Government’s proven inability year after year to attract sufficient numbers of visitors to our shores; and

Two is the Government’s failure to act in a timely and effective way to help hotel properties sell fractional units despite the industry’s Government-facilitated commitment to them.

High tax rates for the purchase of these units – significantly higher than competing jurisdictions – reflect the Government’s subordination of market realities to cover its own out-of-control spending.

Developers had been pushing Government for purchase tax relief for years, but there was no relief – and then not enough –until 2010 when the market had effectively collapsed.

We think the Government should have had a place at the table at some point to see if an arrangement could have been made to keep the Newstead-Belmont properties operating as fully engaged hotel operations.

But our sense is that the Government has lost sight of the big picture. Here, after all, was a young Bermudian who responded to its call to modernize and upgrade the tourism product. He committed 10 years to doing just that, maintained a nearly 100% Bermudian operation and when things got tough the Government was AWOL.

Hotel operators are telling us this is the is the worst winter they’ve ever faced, and that there will be close calls before visitor numbers pick up in the spring. If the Government wants this industry to survive it needs to be attentive to its needs and nimble enough to help in time.

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Comments (23)

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  1. rick olson says:

    Newstead really is not for tourists and that is why it was sold and converted to fractional condo’s or whatever it is years ago ? It does not appeal to todays traveller but perfect for IB but HPrincess is more convenient.
    This was a bad idea from the beginning and failed due to our collapsed real estate market ! It is time to change our real estate policies for all Bermudians NOT just developers. There are many people with negative equity in their home and struggling to make payments especially if you need rental income . We should be encouraging IB instead we chase away and now we are seeing the results do we really want to go fishing for a living ?

    • itwasn't me says:

      agreed…I should be able to sell my condo to ANYONE who wants to buy it. If I can’t find a local to purchase it, then I should have the option of selling to anyone. Let’s face it, Bermuda has been ‘for sale’ since Sir George Somers landed here. Change the damn rules so everyone gets a fair shake

    • Susan says:

      Maybe going fishing for a living is a living is a good idea. We have become too proud and greedy. We should be content with what our grandparents called “sustenance and covering”. Then maybe everyone wouldn’t have to work so hard everyday and not be there for their families. We would have less problems in Bermuda as a result.

    • S Brown says:

      I assume you are one of the minority persons in Bermuda who own a home… Rick, do you really think that would be beneficial for a country of 21 sq miles majority of whom who do not own a house to be able to sell to foreigners without restrictions? Seriously.

      Do you really think that foreign nationals would get value for money on what they would pay for a house in Bermuda?? Why would a foreign national pay $1,000,000 for a home that is relatively small, hardly any yard space, in a dense residential area etc?? Compare that to what they would get in their native country or in another tropical destination!!

      Many Landlords thought that they would be able to charge astronimical rents to expats and it would last forever. That is a gamble some took.

      • It Is What It Is? says:

        Standing ovation and a loud round of applause for your last sentence…”Many Landlords thought that they would be able to charge astronimical rents to expats and it would last forever. That is a gamble some took.”

        That’s just it…let’s see how they make out now…..

  2. Andrew says:

    As a frequent visitor, I feel there is a huge disconnect between the prices hotels are charging, and the quality of the product they are selling.

    Which is why personally, I will always stay in 1 particular guest house on the island – significantly cheaper than hotels, rooms significantly larger, facilities in the room on a par but with a pool outside your room and excellent links to the rest of the island

  3. Hmmmmm says:

    Thank you Andrew for speaking the absolute truth. There is nothing to sell and so why the Opposition would continually harp on about marketing efforts is beyond me. Mr. Simons says he’s talked to developers and hoteliers; ask them sir who opposed their requests for tax relief over the years. It certainly wasn’t Dr. Brown.With an economic policy that is determined to ignore developing new revenue streams and never dares to talk “turkey” with international business is it any great surprise that our esteemed Minister of Finance and now Premier would be the hold-out each and every time? Short sighted and insular economics. Put the blame where it belongs.

    • 32n64w says:

      Exactly where does the blame belong? The PLP have had sole responsibility for the public purse and legislative agenda for more than 12 years. Any blame (and there’s quite a bit to go around) lies squarely at their feet.

  4. Graeme Outerbridge says:

    Keep developers away from our remaining Hotel sites unless they have been brought in by the Hotel owners or hotel management companies. Developers are just stripping away the front end fractional deals and then walking away from the hotel component. If we keep letting these developers onto our remaining hotel sites there will be no locations left for hotel rebuilds. We need high end boutique hotels that really can deliver top service and customers that can make it work economically. If we continue to slide down market we will have nothing but fractionals and condos left^^

  5. Itcouldhappen says:

    Why would a discerning tourist spend upwards of $500 a night when they can go to one of the islands to our south and get a 3 night package for that price with a companion airfare? We are pricing ourselves out of the market with our ridiculous rates.

    There are only so many wealthy people that can stay here at one time, and thier dollars will still not be enough to sustain a viable tourism industry. To the Government and Hospitality industry, please wake up before it’s too late. Platinum period? More like foil, crumpling before our eyes.

  6. 26 says:

    itcouldhappen, you almost got it right, but our main competition is not those places to the south.It is those floating hotels that offer $549 cruises to Bermuda and whose passengers spend on average $142 whilst on Island and cost us $100 in public transport to and from Horseshoe Bay by bus, and Hamilton on our taxpayer subsidised ferries and higher non of our unionised staff that the hotels have to and charge 40% comision for simply booking our tour boats,expecting the tour boat operator to deliver a $ 75 ride for $40. Jim Woolridge had it right by limiting the number of cruise ship passengers. I met a man last year who told me he had been coming to bermuda for years and listed all the hotels he had stayed in over the years. he then told me he was coming down next week for his 25 trip but would not be staying in a hotel because he had just bought a cruise to Bermuda for $549.

    • Andrew says:

      $142 – is that really right? Thats an astonishingly small amount of money

      Would that even cover 1 dinner at Harbourfront..?!

      Seriously though… I do sometimes find there to be a lack of nice ‘cheap’ restaurants to go to. I was born on the island, as was my wife, and have been back practically every summer. I rely on friends recomendations of what is good value each summer so how do the general tourists do it? I can easily see someone coming to the island spending $500 a night on a hotel, and then going out for a dinner and maybe spending $150 a night plus for 2 and maybe not feeling they really have value for it.

      Value will get repeat visits from people spending money on the islands. The current status will attract business men who spend all day in meetings, or cruise passengers who spend all day on their ships…

      I love the island. I will always come back, but thats because it is more than just a holiday for me. But I can see how people may be put off, or just never come back

    • S Brown says:

      I was on a cruise and a gentleman told me the samething about Bermuda being to expensive to stay. If a cruise berths here for 3 nights ($600 for a cruise all inclusive), why pay $300 per night at a hotel and you have to pay for food, the nightlife in Bermuda sucks and everything is expensive.

      • Tired of nonsense says:

        Agreed.

        A friend from Toronto was going to fly down here a few years back to visit. But she called me up and said hell no she wasn’t coming!! I asked why and she replied that for the price of a plane ticket to BDA she can go to Barbados for an all inclusive vacation.

        • Rob says:

          A family of 4 staying at a mediocre hotel like the princess for a 10 day vacation will have to pay well in access of $10,000. Just go on- line and get their rates, and the smaller properties are not far behind.

      • Triangle Drifter says:

        Don’t paint such a lovely picture of cruise ships. What people conveniently forget to add with cruise ships is all those add ons. You have your cabin. You can pig out at the buffet bar. Thats it. Everything else costs extra…& you DO pay. You may not even bring a bottle of water onboard. There is the ‘suggested’ mandatory tipping. Shore excursions booked on the ship are expensive because the ship will typically take 35-40% commission from the excursion provider all the while blaming the excursion operator for the high price.

        • sigh says:

          Its Still Cheaper Than Staying In Bermuda….. Breakfast, Lunch And Dinner Is Included On The Cruise Ships, And You Dont Have To Always Do The Excursions. Lets Just Face The Fact Bermuda Is Tooo Damn Expensive!!

  7. itwasn't me says:

    cheaper is good-der……Cayman $150/night including airfare. maybe we can’t go that low, but work with the damn airlines to make people want to come here.

  8. Andrew says:

    There is a balance to be struck though.. you don’t want to be seen as America’s Benidorm..

    The island has a lot to offer naturally. I have been fortunate enough to travel to many different places, and in no other place do I instantly feel myself relaxing as I step off the plane. Then you hop in a cab and have an actual conversation with the driver, check into the guest house, rent a scooter and the island is your oyster.

    But, my average spend on the island (and this is spending money only, flights and accomodation is already paid for) is €250 a day for 2 of us. And we are going out of our way to eat at some of the more reasonable restaurants on the island. For a 2 week holiday, it all adds up. I appreciate all the logistical issues of island living that make some things naturally expensive, but I often feel from a tourists perspective, parts of the island aren;t recognising these austere times that have hit the rest of the world.

    Add to that my c. $300 a night accomodation and your well on your way to spending the type of money that would get me a room on stilts on an island in the maldives (dont worry… that would be my own personal nightmare!)

    I just think some of the places need to wise up, and lower their prices, even just marginally…

    Just my two pence worth

  9. Watching says:

    You know, I agree! I am in the hospitality industry and as soon as you ask hotel for rates, they provide a ridiculous over priced rate that ruins the package. Dr. brown made a statement that rings true! Have you ever seen a commercial from a local hotel, when you are traveling? Everyone expects Government to fix it but the hotels must help themselves as well. I have seen adverts that the BDOT have put out and they were fantastic but I have never seen an advert put out by one of our hotels. John Harvey, CEO of the Bermuda Hotel Association should be fired! His comments about wait and see is disturbing!! How about trying to not wait and see and get off your rear end and make it happen! This is the problem with our industry, we apply the “reactive” approach and not the “proactive” approach.

    As for the staff at the BDOT. Well done you all. I know you work extremely hard and your efforts are never publicized. We do have very talented people in BDOT but they need help.

    • Cleancut says:

      Yes! you are right watching. we need to kick out the IB COMMUNITY, and get back on our Hospitality knees, we need to go back to what we do best, and support the big Hotel Resorts of the World.