4th July 2023

The Editor,

The Ministry of Trade and Industry (MTI) responded on Sunday, 18 June 2023 to my letter of Friday, 16 June 2023, which pointed-out that the Minister’s reported statement that Trinidad Hilton “had not been renovated for over 20 years” was entirely untrue.

The MTI’s second paragraph confirmed my statements that Trinidad Hilton had been extensively renovated in a program which commenced in 2008. The rest of the MTI’s letter set out some details of the works which are now proposed for that property, but while it is good that we now have that greater level of detail, some serious questions now arise.

My analysis of the Trinidad Hilton, given the estimated profits, as derived from the reported payments of Corporation Tax, shows that the payments of Rent to eTecK would be –

Year	Net Profit (after tax, consistent with AGOP)	Rent @76% of Net Profit	Return on Investment ($634M)
2015	$3.099M	$2.355M	0.37%
2016	$6.233M	$4.737M	0.75%
2017	$2.533M	$1.925M	0.31%
2018	$1.987M	$1.510M	0.24%

These estimates indicate extremely low rates of Return on Investment, which no private sector investor would tolerate, especially given the ongoing requirement for expensive periodic capital works.

The concerns all relate to the investment decision, given that the State owns the three largest hotels in T&T – Trinidad Hilton, Hyatt Regency and Magdalena Grand in Tobago.

Since the MTI has engaged in this much-needed disclosure, it would be in the public interest if these details could be now provided –

• Comparison – without details of the parts renovated in the 2008 program and the out-turn costs, it is impossible to discern the rationale for these new works. I am requesting that MTI provide those details to permit the comparison to justify the new investment;
• The impact of Hyatt Regency – Hyatt Regency caused a virtual collapse in the POS Hotel market since its opening in Jan 2008, with severe impacts on other hotels in our capital city, as a result of the Government diverting most of its functions/conferences to that new venue. The affected hotels include Ambassador; Crowne Plaza; Kapok; Cascadia; Carlton Savannah and most of all the Trinidad Hilton which decisively lost its pre-eminence in the POS market. Did the 2008 program of works have the effect of improving Trinidad Hilton’s fortunes? What has been its occupancy rate in the past 15 years? I recently saw elaborate proposals for the redevelopment of the Salvatori Building site in downtown POS as a Public Private Partnership, to include a 319-room hotel – how does this affect the investment decision?;
• Financial performance of the State-owned hotels – this area has been a virtual Black Hole, with very little, if any, reliable information made available. Our Public Officials observe a serious, detrimental commitment to silence on the performance of these massive investments. No audited accounts have ever been made available for these State-owned hotels, although we know that the foreign companies with Management Agreements (Hyatt, Hilton and Hospitality Solutions International for Magdalena Grand in Tobago) would have regular and proper accounts showing real returns to justify their continued operations. Once again, I am requesting MTI to make these figures available to the public, who are paying for all of this.

The Department of Management Studies at the Faculty of Social Sciences at UWI St Augustine offers post-graduate studies on Tourism and Management, so it would be interesting to have their input on these large-scale investment decisions.

Finally, what are the Ministry’s responses?

Afra Raymond, former JCC President