The wholly government-owned Atlantic Hotel Inc (AHI) says the Marriott Hotel is expected to record a net profit by year-end because of a reasonable occupancy rate and other services.
“Based on actual and projected performance of the hotel, Marriott management projects that the hotel will deliver a net operating profit (measured in cash flows) by year end,” said the corporation in a statement.
The company said the management of Marriott has reported to the AHI Board of Directors, that for the month of August, the hotel occupancy was 52% representing an average occupancy of over 100 rooms per night for the month. Occupancy of the hotel in July was 48%. Food and Beverage performance is also exceeding its budget, added AHI.
The company also refuted reports by the Kaieteur News newspaper that Marriott was in danger of defaulting on payments to Republic Bank Limited (RBL) and that Trinidad-headquartered financial institution ws not the de facto owner of the hotel.
AHI explained that as part of the legal financial arrangements with Republic Bank Limited (RBL), payment on the interest on the debt provided for the construction of the hotel is not due until the end of 2016, and repayment of the principal is not due until 2017.
The company added that during that period, interest will be capitalized in accordance with the loan agreements. Therefore there is no outstanding payment owed by AHI/Marriott Hotel to RBL.
It also projects that the existing working capital is adequate to cover all operating expenses and as such the shareholder will not be called upon to inject any funds into the operations of the hotel.
Prior to winning the May 11, 2015 general elections, A Partnership for National Unity (APNU) and the Alliance For Change (APNU+AFC) had pilloried the then People’s Progressive Party Civic (PPPC) administration for investing US$57 million in the 197-room hotel without a proper feasibility study.
However, the National Industrial and Commercial Investments Limited (NICIL) and the Guyana government had defended the deal, saying that such a hotel would make Guyana a more attractive destination for conferences, other business tourists and the tourism sector in general.