The Guyana Government has decided not to sell the US$58 million Guyana Marriott Hotel to any of the six bidders, whose offers, according to Vice President Dr Bharrat Jagdeo, are below the current market value of the profitable property.
Six companies had submitted bids, ranging from US$25 million to US$65 million, to purchase the Marriott Hotel located in Kingston, Georgetown. The highest bid, of US$65 million, was received from an American investment group – X, LLC.
However, VP Jagdeo contended, during a press conference on Thursday, that these offers are too low. “When we went out to tender, we were testing the market. We believe, in the Government, that none of the bids meet our price expectations, and therefore we would not proceed with any of those bids,” he posited.
Among the other bidders are Pegasus Hotel Guyana, which bid at US$55.5 million; Georgetown Investments and Management Services Inc, which bid at US$50M; Muneshwer’s Ltd, which bid at US$25 million; Integrated Group Guyana Inc, which bid at US$55 million; and NCB Capital Markets Limited, which bid at US$33 million.
A feasibility study conducted by Miami-based firm HVS Consulting back in 2010 had outlined that, 10 years after it became operational, the Marriott Hotel is likely to be sold at some US$76.1 million.
In fact, the Vice President pointed out on Thursday that Government wants an appropriate offer that reflects the true value of the hotel, which is currently operating at its highest profit since existence.
“The Marriott will remain in the public domain as part of the Government until we can get an appropriate offer that mirrors the true value… We know what a true value will be in the current context. So, that matter should be put to rest: that we will not proceed with any of the bids because we believe that they’re too low, based on the value of that asset now and its capacity to earn,” Jagdeo stated.
In a notice back in December 2022, the National Industrial and Commercial Investments Limited (NICIL) had announced its intention to sell the State’s shares in Atlantic Hotels Incorporated (AHI), the state-owned holding company for the Marriott Hotel.
AHI is the NICIL special purpose company that owns the Marriott, a 197-room hotel that opened in 2015, whose financing structure had depended on a casino and entertainment centre to make enough money to repay up to US$30 million in debts to the banks and other creditors. But those add-ons to the hotel were scrapped.
A total of eight Expressions of Interest (EoIs) were received, but only six offers were made by April 17, upon invite from NICIL.
Last month, VP Jagdeo had said that now is the right time to sell the Marriott Hotel, which is currently operating at a profit even without the casino and entertainment centre add-ons.
“Now it would be best to sell the Marriott off. You could probably maximise the price that you will get when it’s profitable, and before the seven new hotels that are privately [being] built, that are international brands, come on the market,” he had stated.
Construction of the Marriott Hotel, which started in 2011, had sparked widespread controversy. At the time, Jagdeo was the President and his Administration had faced heavy criticism over the use of taxpayers’ money to finance the hotel. But Jagdeo has always defended the decision.
“The Government didn’t need to own a hotel at that time, but the era was that we were not getting new hotels built, and we had to trigger the investment,” he has emphasised.
According to the Vice President, the hotel is operating at a profit, and provides some 500 jobs to Guyanese, directly and indirectly. He insists that selling the Kingston, Georgetown hotel now would bring in “maximum value” to the State, and that could go towards triggering other investments in the country.
“There is no particular supreme benefit to Government owning [the hotel]. Whether to maximise the money and invest it into something else …it’s a pure business decision [to sell now] …It is the period. You maximise the period in which you sell. This money, some of it will go to clear off the remaining loan, and some will come to the Treasury to be used back for whatever purpose is determined. And so this is probably the best time when you can maximise the value, before you get competition from seven other hotels coming into the market within a year or two,” he noted.
The Guyana Marriott Hotel was completed in 2015, the same year ExxonMobil first found oil in Guyana’s waters. The hotel has since gone on to play an important part in Guyana’s developing oil and gas sector, as it is used to accommodate local and overseas offshore workers. It is also a prime venue to host numerous private and State-sponsored events.
