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Concessions for hotels approved

Senators have unanimously approved concessions for both Elbow Beach and the former Surf Side Beach Club intended to help support renovations.

A total of $11.8 million in concessions for the Elbow Beach Hotel were approved to support a $38 million redevelopment, including the reopening of the main hotel building.

Meanwhile, another $2.5 million of concessions were approved for the former Surf Side complex, which closed last October, to support a proposed $35 million revamp.

Michael Fahy, the Minister of Tourism Development and Transport, said the projects would create both construction jobs and lasting hotel jobs, while inspiring inward investment into the island.

During the debate, Opposition Senate Leader Marc Daniels noted that to obtain the full sum, the resorts would need to meet certain qualifications, including spending set sums on advertisement and local entertainment. He questioned how those figures were reached.

However, he expressed support for the principle, saying that some tourist destinations did not appear to reinvest in their own properties, resulting in a dated product.

Independent senator James Jardine voiced his support for the orders, but echoed Mr Daniels's point that the public needed to know where the money was going. He pointed out that if both orders were approved, a total of nine hotel concessions would be in effect. While the details of two — the St George's hotel project and Morgan's Point — are unknown, the concessions for the other seven are valued at up to $51.2 million.

However, he said $49 million of the concessions included “quid pro quo” stipulations, requiring the hotels to spend a total of $39.2 million in marketing and $4 million for the hiring of Bermudian entertainers before receiving the full sum.

The concessions were further supported by independent senator Joan Dillas Wright and Progressive Labour Party senator Renee Ming, but Senator Ming questioned if there was any requirement for the hotels to have a certain percentage of employees being Bermudian.

Meanwhile, One Bermuda Alliance senator Vic Ball noted the job creation that would come as a result of the hotel redevelopments and Jeff Baron, the Minister of National Security, said Bermuda would feel the benefits of the projects long after the America's Cup had come and gone.

Senator Fahy concluded the debate, acknowledging that for years there had been underinvestment in tourism due in part to a lack of incentive for property owners updating their facilities — something the Hotel Concessions Act introduced to address in 2010. And while he said the Act was ahead of its time when it was created, he told the Senate it now needed to be revamped, stating that it required agreements with every hotel to be negotiated separately.

“What we want is a blanket approach saying if you come to Bermuda, this is what you get,” he said.

He added that the scope of potential concessions needed to be extended to encourage hotel development and redevelopment, which he said in turn would help to bolster air lift.

Elbow Beach Hotel (Photo by Mark Tatem)

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Published June 24, 2016 at 9:00 am (Updated June 24, 2016 at 9:34 am)

Concessions for hotels approved

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