We can turn the hotel industry around
As you all know, the world is facing the coronavirus pandemic, which has drastically changed the way we live.
This pandemic has also affected me, a former hotel executive, with more than 40 years of experience in the hotel industry, and the first person in Bermuda holding five designations in hotel management, such as Certified Hotel Administrator, through the American Hotel and Motel Association. For more than 25 years, I held an executive positions as a Director of Convention Services, Director of Sales, Director of Marketing at the former Marriott Castle Harbour Resort in Bermuda, and before that, a former Conventions Service Manager at the Southampton Princess Hotel.
During these unprecedented times, I had plenty of free time to think about Bermuda being a premium tourist destination and what it can offer to tourists now and after everything comes back to normal. I write to this matter because the Fairmont Southampton hotel has a very special place in my heart and thoughts, as my first job was at this hotel as a Convention Service Manager, which prompts me to share my thoughts on the Fairmont Southampton property.
You will agree that this iconic property has been a much loved tourist destination property for numerous conventions for various groups and sectors, and as a prestige and local events venue. The hotel has been instrumental as the Crown Jewel hotel for more than 50 years in Bermuda.
A little history: in 1972 on 100 acres of land and having 600 rooms for guests to the Island, this hotel, which was initially built in 1972 through the thoughtful planning of Daniel L. Ludwig, a leading businessman, who was determined to open a hotel that would attract affluent American visitors.
Before the pandemic, from weddings and honeymoons to conferences, the Fairmont Southampton was offering holiday specials and hotel packages designed to make special occasions and family holidays perfect to the last detail.
The leadership team at the Fairmont Southampton announced that effective October 23, 2020, the property will close to undergo a complete upgrade and renovation. I do hope this upgrade and renovation will elevate it to a premium five-star hotel and even reposition the resort to a higher level than before.
I believe somewhere in the region of $145 million to $175 million is expected to refurbish the Fairmont Southampton and the hotel industry is expected to reopen in 2022 for business.
The general manager is Kiaran MacDonald and the new owner is Gencom. I believe it would be very beneficial if our government in collaboration with the Opposition consider gathering a team of financial and planning experts who can assist Gencom by making sure the Fairmont Southampton upgrade, project financing and renovation process can go smoothly and without interruptions, as well as offering any kind of support and assistance that may be needed.
I also believe Gencom reached out to our government and asked for some guidance and possible financing help from the private sector to no avail.
It is extremely important that all the renovations to be finished on time by 2022.
Based on that, in my opinion, we need to do everything in our power to support the renovations of the Fairmont Southampton. Securing investments from individuals, bankers, the Government, local and foreign investors, and anyone who is interested in investing is the right way to go.
Bermuda will face a lot of challenges if this project is not going well forward:
• Increase in airfare prices
• Taxpayers paying more funds to the Bermuda Airport Authority as a result of low air arrivals and departure tax
• Fewer airlines flying to Bermuda
• Major events will seek other destinations for their conventions
• More staff layoffs on top of what we have now, possibly in the liquor and wholesale food distributor sector
• Less work for the taxi industry
• Less business for local restaurants who normally offer dine-around to hotel guest and convention attendees
• Decrease in social insurance, payroll tax and the hotel tax that funds the Bermuda Tourism Authority, etc
Additionally, it is very important if this project can get duty-free status and have a detailed construction-planned renovation programme by February 2021. Why? Because the renovation process cannot afford interruptions for many, many reasons — being the largest convention facility in Bermuda (left empty) one of them.
I believe, in the upcoming months, Bermuda will need to be optimistic about the future of hospitality. In 2018, we had more than 282 000 air arrivals and, with the new airport opening and the new St Regis hotel being completed soon, we should have significantly increased air arrivals in 2021-22.
In closing, I strongly believe by 2022 the Bermuda hospitality industry will be stronger than ever before.
• Charles Leon O’Brien is a former hotel executive in Bermuda with more than 40 years’ experience