Premier, Tourism Minister On Newstead
Following the Newstead Belmont Hills Golf Resort & Spa being placed in receivers’ hands after the Bank of N.T. Butterfield & Son Ltd. called in a multi-million dollar loan, Premier Paula Cox said the paramount concern is for the hotel to be in a position to continue as a going concern.
Speaking on the Harbour Road tourism/residential property, the Premier said “This is an issue that has certainly gotten the Government’s attention. Yesterday (Monday, January 17) I spoke to the Bermuda Industrial Union president and we had a constructive and frank exchange.
“The paramount concern is for the employees, and for the hotel to be in a position to continue as a going concern. From the discussions with the receiver, that is the intent and I was assured that redundancies are not being contemplated.”
Tourism & Business Development Minister Patrice Minors echoed the Premier’s sentiments, saying she was “cautiously optimistic” an agreement could be reached which would satisfy the luxury property’s creditors as well as its owners, operators and staff.
“This latest development regarding the Newstead property is regrettable,” she said. “However despite its challenges, this does not diminish our confidence in Bermuda’s strength and appeal as a premier visitor destination.
“I want to assure residents that we are monitoring the developments with the property very closely and are cautiously optimistic that some form of resolution can be reached which will benefit all concerned.”
Receivers Ernst & Young have said operations at Newstead Belmont Hills will continue to run under their management of the receivers and they do not anticipate any immediate impact on the day-to-day operations of the businesses.
“The receivers will focus on reorganising and restructuring operations to facilitate business continuity with a view to a sale of the assets as a going concern,” Ernst & Young said in a statement released yesterday.
Opened in 2008 as a luxury tourist property intended to complement the residential Belmont Hills apartment and golf development launched three years earlier, the 45-suite Newstead was Bermuda’s most expensive, large-scale hotel opened in more than 30 years.
The respected Frommer’s travel guide described Newstead as “posh, postmodern, boutiquey, and stylish, in a high-style urban-hip way that’s actually rather unusual in understated and conservative Bermuda.”
Newstead Belmont Hills is the second Bermuda hotel property to go into receivership in recent months. The Pink Beach Club was placed in receivers’ hands in July, 2010.
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Thanks Ewart. Still in control.
Since the PLP have been in power, the hotels have either been abondoned, blown-up, turned into high end living that no Bermudian can afford, or gone into backrupcy.
The Government backed the Bank of Butterfield..now it’s time for them to back the Bermudian Company of Belmont Hills & Newstead. The present Bermudian owners should not be forced out by the new foreign management team at the Bank of Butterfield^^
Good point Graeme!
The government cannot back Newstead. They have to back the Bank guys. Remember the govt secured $200M worth of debt for Butterfield. So if Butterfield wrote this off, the bank would be a weakened entitity and thus its paper of lesser quality. Dont you get it?
And how would you suggest the govt back the bermudian owners? by guaranteeing the loan payable unto itself? That cant and wont happen. Government should not be bailing private enterprise…
Exactly.
411 – I agree with you. Unfortunately, however, the Government has an existing track record of unfairly supporting private enterprise through no-bid contracts (TCD, Dockyard), writing off BIU debts and massive cost overruns (Pro-Active, et al) so its no surprise some in the community think it only reasonable for the NBH to have their hand out for public money (not that they are mind you).
After all, this is the same Government that has consistently proven its more interested in self gratification and personal comfort at the taxpayers’ expense than promoting and supporting a viable tourism product and mutually rewarding IB community.
We’re doomed
No wonder the hotel went bust with dudes like doctor brown and premier cox at the reins. This team could not manage a barbecue. Just wait until the island can not sell its bonds or refinance its debt in a few years. Then the dung will really hit the fan.
Paula Cox’s first reaction is to worry about the union and redundancies!!!???
Um, I think that’s the LEAST of the concerns right now. Maybe her first phone call should have been to the owner, or bank, that would have been more helpful I think.
It never ceases to amuse me how Dr. Brown is the father of all mischief. Today, because he cut the ribbon for this hotel it is his fault that its in receivership. you people need professional help. This is a private business that failed. privately owned, privately run, publicly failed. The Government gave this property concession after concession. Why is it so difficult to accept that some businesses succeed and some businesses fail? Meanwhile, Blu is doing wonderfully as a separately run business on the same site. why? because the people running Blu know what they’re doing and have perfected the model. You all need to get a grip and quick because if you think its the Government’s responsibility to run private business then you need to move to Cuba. Even the old communist countries respect private sector ups and downs more than you all. The real story here is why the Premier, the darling of business, is a spectator and not a player. You can think what you like of Dr. Brown, but I bet you Butterfield wouldn’t have let him hear about this on the news…..they know what disrespect they can now get away with. The funny thing is, their actions justify exactly my point: this has nothing to do with the Government, this is private enterprise, warts and all, at work. Even here in LaLa Land its called capitalism people.
Bermuda used to be a tourism machine. Dr Brown as Tourism Minister was a very vital part of that tourism machine. Everyone else was part of it, starting with the immigration officer at the airport & ending with the Bermudian airline agent at the airport. Everyone, whether they had direct contact or not, had a part to play.
Browns job was to be Bermuda’s #1 salesman. He was supposed to get out & sell where the customers are. He was supposed to enlist the services of an advertising which had experience in tourism. He did neither. There is no space here & no need to go into what he did do, we all know, but he failed miserably as a Tourism Minister.
Newstead/Belmont is just the lastest of a long list of accomodation propertys which no longer exist.
” Dr. Brown failed miserably as Tourism Minister” – Pal , it depends how you look at it, especially in view of how the 28 million spent with Global Hue was dispersed – I think the gentleman got a great return for the money spent, literally, you can bank on it…all the way to Martha’s whatever it is…
As for Ms. Minors, good luck cleaning up the mess he left behind, anything of value was sucked out or destroyed years ago (like our exceptional infrastructure in the US that for sixty years did a fantastic job selling Bermuda. instead we get some cheap phone center with no heart and soul, a real Kerwin Communications special. What do you expect when you let a Yank like Ewart run things – he should have gone home years ago.
Patrice Minors is the Tourism Minister and doesn’t she also work for the Bank of Butterfield?
Of course it’s not all Dr. Brown’s fault, but he must accept some responsibility for the state of our tourism product.
He was the Minister (i.e. CEO) of Tourism for how many years? In that time he granted multi-millio n dollar contracts to certain advertising agencies, with no experience and/or knowledge of Bermuda, simple because they were his mates. He fired the Bermudians from the NY office and hired Sales Focus, who lasted all of 6 months because they were useless. As a result of these friends and family contracts mixed with the crisis Bermuda recorded the worst tourism numbers in over 3 decades. No tourists equals no revenue for the hotels which results in hotels closing and/or going into receivership. Isn’t it something that approximately 50% of hotel rooms actually disappeared under his reign as Minister of Tourism?
So no he isn’t fully to blame, but he isn’t exactly blameless in the matter as well.
What I don’t understand with these hotels is that why don’t they lower their rates to fill rooms? Why not have full capacity at $150 per night during the off season instead of having 15% occupancy at $300?
Can someone explain the logic to me?
cuz $150 won’t do it in off season ! What is the draw this time of year ? Golf ? Go to Florida cheaper better golf and entertainment .
try offering packages including air fare and other incentives just like our friends down south. Or are we still hoping that the 1970s ‘Prime Rib and Kobe Beef’ era would return.
And you know because you have personally tried this? Or is this just another attempt to avoid the conversation of lowering prices that seems to be the norm here as of late from hoteliers and retailers?
why blame government? the newstead is a privately owned company that lacked a marketing and sales plan. yes, the government should assist with advertising our product overseas and working to get the airline prices down. But so should the hotel properties, which we don’t see and have never seen. Hotels should work directly with airlines on holiday packages, incentives, and other special promotions. The Fairmont chain should be influential with carriers like WestJet and Air Canada to make something happen.
I can’t depend on the government to advertise my product.
The Government does have a role to play…..Bermuda money backed Butterfield and now they should get involved in saving Newstead. The Foreign management of the bank should apply their 12 million of BS Management fees to helping Newstead. Capitalism does not mean just watching market forces mess up. If the US Government had not gotten involved in the Banking mess on Wall Street there would be no Capital system to talk about. I think you dreamers need to go back to Economics 101 and read the Wealth of Nations by Adam Smith. If economies were left to the invisible hand of the market we would all be broke from the recent robbery on Wall Street with the Banksters and AIG. We need to help one another not destroy a business because of the total collective failure of our lack of planning and management in Tourism. I say save this Company get those blood sucking receivers out of there as quickly as possible and refinance this Bermudian owned Hotel and development!!!!!!!!!!^^
I don’t disagree with you GO. But Newstead/Belmont made two very bad mistakes. Relying heavily on fractional sales and not being aggressive enough with their tourism pitch in high end markets overseas. I repeat, work with the airlines directly. Back scratching is the oldest game in town that still effective in a sluggish market
Perhaps people on island would pay decent rates stay at a hotel to relax etc? Local tourism works in some islands.
According to your logic, why stay open during the winter months period?
Encouraging locals to enjoy a weekend is all well & good but all it does is slosh the local money around a little.
What is needed is foreign exchange to offset our huge balance of payments. It is also fine to scream “drop the prices” but you don’t hear any of them suggesting drop the wages or be more productive.
Bermuda is just too expensive to do business in. Couple that with a whole bunch of other reasons for the tourism disaster, mostly created right here by our own people, & it is no wonder Bermuda is being slaughtered by the competition.
What happened to half a loaf is better than none?
“This is an issue that has certainly gotten the Government’s attention.”
This quote says it all. It takes a formal receivership process just to get the “Government’s attention” ??!! Unbelievably amateurish – but unfortunately indicative of a Government that cant’ even plan a piss-up in a brewery.
NOW the Government should get involved?! Let’s just inject a little honesty into this discussion. Firstly, I cannot believe there’s anyone who can honestly say that Dr. Brown didn’t work to transform Bermuda’s tourism. The man pursued JetBlue, AirTran, WestJet, Virgin, USA3000 and every carrier he could to come here. Anyone remember two summers when you had direct flights to Chicago, Orlando, Philadelphia,Baltimore, 5 flights to the New York are (2 AA, JB, CO, Delta)? You all bitched and moaned at the concessions and things he was doing to provide incentives for developers to come to Bermuda. You kicked and screamed when he had the audacity to tell Southlands to build something that might work and not go donw the raod of fractionals. Dr. Brown did his part folks. At some stage someone has to stare down the greed of exploiting Bermuda’s former housing prices in this fractional scenario because that’s exactly what fueled this and is pushing many other develolpers.I know it hurts but Dr. Brown didn’t do this one.
Hmmmmm – adding airlift capacity is certainly an important factor towards improving access for tourists (and business visitors), however, its only one part of the equation. During EB’s tenure how many new hotels were built? How many hotel beds were lost? Where and when was a comprehensive Tourism strategy developed, implemented, measured and overseen? Throwing money at airlines for minimum revenue guarantees is the easy part. The hard work (which provides long term benefits for Bermudians) was forsaken in place of convenient photo-ops and hand picked statistics.
What exactly is the point of having all those airlines if there are no tourists to fly on them? Actually how many of those that you listed do not fly to Bermuda anymore and if they do it is ona seriously limited schedule. Why is that you ask? NO TOURISTS TO FILL THE SEATS!! No tourists due to poor to non-existent advertising in our traditional major gateways. I was in NY last month and did not see one advertisement in JFK or the City itself, despite the island being less than a 2 hour plane ride away. I saw plenty of Jamaican, Bahamas and Barbados advertisements though and they work with a tourism budget less than ours.
I have to laugh at you politicians and their zealot supporters. If the news was the opposite you all would be jumping up and down claiming that the reason for our success is simply down to the genius of the ruling party and Dr. Brown. But instead the failures are simply down to the economy and nothing else.
I never mentioned Dr. Brown in any of my posts…so maybe you are talking to those that have. My concern is working out where all the money went from the fractional sales at the old Belmont leaving the Newstead back end of the deal hotel so vulnerable to failure. I didn’t crunch the numbers Butterfield must of before they lent the money. Maybe we have too many developers with no hotel experience front loading deals for fractional sales and then walking away from the hotel component. In short we are placing the cart before the horse. One thing is for certain Government should think twice before leasing out Morgan’s Point and 9Beaches for hundreds of years.
“However despite its challenges, this does not diminish our confidence in Bermuda’s strength and appeal as a premier visitor destination. I want to assure residents that we are monitoring the developments with the property very closely.” – Patrice Minors
Seriously?!?! This reminds of the Iraqi Defeince Minister assuring everyone that the situation was under control whilst the US Army occupied the Baghdad Airport.
At some point the voting public have to stop falling for this blatent BS. I’m not a big Craig Cannonier fan but he’s right in mocking the so called ‘platinum period’.
If it looks like dog poo and smells like dog poo it’s probably dog poo!
I heard Patrice Minors is a part-time minister, does anyone know if that is true?
She is part time. What’s the big deal? Your Premier is a full time Minister for the first time now. Part-time running the economy for 6 years. Dont’t you think its a little late to worry about such things? and by the way, why doesn’t everyone want to know if SHE is getting two salaries…..the goose and gander principle clearly doesn’t apply…..
The big deal is that she’s in charge of Tourism and International Business, you know, the pillars our economy is standing on. And one look at the state of our economy suggests my Premier might have better served me if she had been full time. First thing she did when she went full time was try and cut $150million out of her own budget…
OK. Let’s play a game. I’m a tourist. I wish to stay at a 4 or 5 star hotel in Bermuda TODAY. Where do you – 32 and Tired – recommend I stay? I think you expected Dr. Brown and the PLP to have on hardhats and build these hotels themselves. All the places mentioned in your posts have a range of properties on offer. Is the best we can do Hamilton Princess or Southampton for that matter? 3 stars at best at 5 star prices. I am no zealot and carry no brief for the PLP but fair is fair. Part of the reason why Bermudians and Bermudian business will not mature is because everything is left to Government to fix, do, repair,etc.We just don’t get it.
Well if you don’t think that the Govt shouldbe held accountable for poor tourism numbers then they should terminate the Ministry of Tourism and reliquinsh any responsibilities to an independent and non-partisan committee/board.
Until then the Govt retains ultimate responsibility for advertising Bermuda as a tourist destination. If they aren’t then what the hell does the Govt need a Ministry of Tourism and an annual budget of approximately $150mn? Like I said not one advert to be seen in the most of our traditional NE America target markets. What are they doing with that money except building $10mn dolphin condos in Dockyard?
Explain to me how these hotels are supposed to improve their product if the ultimate tourist authority cannot attract tourists to our shores?
Until the Govt eliminates the Ministry of Tourism they are responsible for Bermuda’s dismal tourism figures and thus the buck stops with them.
This is so easy. OK, The Department of Tourism is hereby eleminated. We now have a Tourism Authority. Where does the money come from for them to market Bermuda? Good, bad or indifferent, you can only dress up what exists in Bermuda so much. Even a bad campaign has to have something to sell.Your attitude is reminiscent of those dying hoteliers who thought exactly the same way. The Government’s job is to secure the planes, secure the cruise ships and partner with tourism players. NOT to fill individual hotels. Ask Atlantis in the Bahamas. They’ve never waited for the Governmetn of the Bahamas to do a thing to fill their hotel. IN fact, many Americans when asked if they’ve been to the Bahamas sometimes say “no, but i’ve been to Atlantis”. The hotel has become the destination. Sandals, Breezes, and several other chains market themselves. Look at The Reefs locally. Dodwell doesn’t play with the BHA and the other hotel organisations because he markets his own property and has built his success around the strength of his own marketing, not waiting for the Government to fill his hotel. He gets what he wasnt from the Government, planes from key gateways and a suitable concession-based system to support his expansion. Now, if he is having trouble maybe, just maybe there’s more to this problem than just “the PLP did it”.
So what exactly are they doing with a $150mn per annum then?
Give the $$$ allocatedin the budget to the new tourism authority and let them, who will have vested interests and the necessary qualifications and experience (i.e. hotel, restaurant owners etc.) to ensure that the industry reaches its potential. Because if these individuals fail they lose their livelihood as well (i.e. vested interests).
The same can’t be said about part time politicians who are responsible for this (formerly) important pillar of our economy or politicians who use the $150mn as their personal slush fund to hand out million dollar contracts to their mates and fund their son’s charity in LA at the Playboy Mansion.
“Part of the reason why Bermudians and Bermudian business will not mature is because everything is left to Government to fix, do, repair,etc.We just don’t get it.”
I disagree. The Government has an important role to play in promoting the island and taxes the electorate to fund that obligation. Unfortunately we received very poor value for the DoT budget as evidenced by most metrics.
I don’t know what industry you work in but there is a high degree of self sufficiency and expertise (at least in the IB & financial services sectors) on island that significantly supports the GDP so to argue that Bermudians need to mature is incorrect (unless you’re referring to an unhealthy & myopic voter mindset which has afflicted many Bermudians of all shapes, sizes & colours).
There are also number of people out there who have an unreasonable sense of entitlement and high opinion of themselves and their (lack of) abilities who certainly need to reassess their self perception. Mind you this starts at the top with certain Government leaders and has likely trickled down to the taxpayers over the last 30 years
ON that we have common ground. Didn’t take too many posts for us to agree. I will only add this: I agree that the Department of Tourism needs to disappear. I support a Tourism Authority but that alone will not cure the ills that plague us. We need first rate product in hotels, golf, spa, people and entertainment. I wonder how long it will take for gaming to return now that the amateur politics that killed that have now passed. Now that would be a game-changer.
TO Hmmmmmmm,
Are you suggesting that the Reefs is healthy?