By NEIL HARTNELL
Tribune Business Editor
The “fragility” of tourism’s post-COVID rebound was yesterday underscored by the British Colonial Hilton’s decision to “indefinitely” close from February 15, 2022, and terminate up to 130 staff.
Government officials last night gave differing accounts for why the downtown Nassau resort’s owner, China Construction America (CCA), is taking this action. Chester Cooper, deputy prime minister and minister of tourism and aviation, last night attributed the situation to the end of the resort’s management agreement with the Hilton - something confirmed by the hotel brand.
With the Hilton partnership coming to an end on February 15, Mr Cooper said in a statement that he had been informed by CCA it was “facing challenges in keeping the property open” beyond that date without an operator to manage operations and provide a booking/reservations system together with marketing support.
However, Robert Farquharson, the Government’s director of labour, told Tribune Business that he was advised yesterday morning by British Colonial management that the decision to close Bay Street’s ‘anchor’ property “indefinitely” was based on its poor “past performance” and the absence of any prospects for improvement.
His account of CCA/British Colonial’s explanation was backed by Darrin Woods, the Bahamas Hotel, Catering and Allied Workers Union’s (BHCAWU) president, who also told this newspaper that the union was informed via letter on Tuesday night that the resort “cannot keep going in the direction it’s going” and sustain present occupancy levels.
“The saga continues,” Mr Woods said of the Hilton situation. “This shows how volatile the industry still is. This is just to show that the industry is still fragile, and is a case of it going in the opposite direction. We have just got to keep our fingers crossed and hope we navigate ourselves out of this whole pandemic situation.”
He added that British Colonial executives had been vague on the reasons for the closure and associated staff terminations, and did not explicitly state in yesterday’s meeting with the union whether the shutdown would be permanent or temporary.
“We got a letter late last [Tuesday] night that said they thought they would be much further along than where they are, and they had decided to cease operations as of February 15,” Mr Woods said. Whether the closure was permanent or temporary was among the first questions asked when union executives had a “brief” meeting with resort management yesterday.
“They couldn’t say,” the BHCAWU president said. “We wanted to know if the closure would be temporary, and they were closing for renovations, or if it is permanent. By all accounts it’s a permanent closure. Based on the economic climate right now and the industry, they said they cannot keep going in the direction they are going right now with occupancies.”
Mr Woods added that the union and British Colonial staff had been taken by surprise over the closure’s timing, giving that it was happening right at the start of the peak winter tourism season that lasts from mid-February to Easter and April.
“That’s not something we would be expecting at this time of year, just coming into the New Year,” he said. “We wanted to see how everything started to pan out in the New Year. It’s a little slow and will start to pick up after the end of January.
“No one really expected it. The Hilton was one of the hotels that was low-key, where you did not hear anything from them about what was happening on-property. This will be the third, fourth, hotel that closed as a result of the pandemic. That’s more than 120 persons on the unemployment line in an already-depressed economy.
However, the British Colonial Hilton is likely to have been hit hardest than many hotels by the COVID-19 pandemic because it catered primarily to business travellers - the market segment that has suffered most.
And the 291-room property was also focused heavily on the groups, meetings, conventions and conferences market that is among the last to rebound from the pandemic’s clutches. This was not just foreign groups, which continue to be impacted by US health advisories, but the local corporate market that now relies on Zoom calls as opposed to face-to-face meetings.
Mr Woods said his main focus now was to ensure the union’s 65 line staff members receive the redundancy pay and benefits due to them under the industrial agreement and their contracts. Mr Farquharson, director of labour, said his department will today receive information on the managerial staff that will be impacted, but said between 120-130 total employees stand to be terminated.
“The resort would have advised us this [yesterday] morning that the management team had taken a decision to close the hotel indefinitely,” he told Tribune Business. “They indicated that a review of the past performance of the property was not very good, and in the foreseeable future they didn’t see where that position will improve. They’ve advised they’re closing the hotel indefinitely.”
Mr Farquharson said British Colonial management had pledged that all staff will receive their severance entitlement. However, he declined to say that the resort had failed to give sufficient notice that it was terminating such a large number of people as required by the changes to the Employment Act in 2017.
While conceding that it was non-compliant thus far, Mr Farquharson said it could yet come into line by pushing the termination date back. The notice period is to allow for negotiations between employer, government and union to see if any jobs can be saved or staff moved into other posts.
“The loss of any job has a significant impact,” the labour chief told this newspaper. “Those persons now have to call on NIB to seek unemployment benefits and, in some cases, call on Social Services, and the Department of Labour has to see what it can do to find alternative employment for these people.”
Mr Cooper, in a statement that acknowledged the threat to more than 100 jobs, attributed the threatened closure to the Hilton brand’s departure rather than poor resort performance.
He said he was “cautiously optimistic” that any closure “can be avoided or mitigated” with the Government seeking to facilitate talks between CCA and other resort operators, flags and management companies to acquire a replacement for the Hilton.
“I met with the owner of the British Colonial Hilton, China Construction America (CCA), which indicated that the agreement to carry the Hilton brand at the property has come to an end. Therefore, without a management company in place, CCA is facing challenges in keeping the property open,” Mr Cooper said.
“During this meeting, the Davis-Cooper administration expressed our concern about the livelihoods of the more than 100 employees of the property. We also drew attention to the iconic nature of the British Colonial hotel and its historic significance.
“We are currently attempting to facilitate discussions with the owners and established management companies with a view to making sure the closure can be avoided or minimised. I am cautiously optimistic that a resolution can be reached.”
There were suggestions last year, unconfirmed, that CCA was seeking to sell both the British Colonial Hilton and the adjacent $200m development at The Pointe. The resort’s closure would represent a setback, and blow, for downtown Nassau’s revival post-COVID. The resort was the first to be built in The Bahamas, and past owners included Henry M. Flagler and Sir Harry Oakes.
A Hilton spokesperson told Tribune Business via e-mail: “Hilton and hotel ownership have reached a decision to end the management agreement for the British Colonial Hilton in Nassau effective on February 15, 2022. I can share that the termination is mutual and amicable, and allows both parties to explore new opportunities.
“The hotel will notify all future guests and clients, and assist in the event alternative accommodations are required. Hilton has enjoyed serving the community in Nassau and looks forward to continuing welcoming guests with our signature Hilton hospitality at more than 20 hotels and resorts across the Caribbean.”