Sandals denies its closure announcement was sudden and seeks to clarify recent statements by tourism minister

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(PRESS RELEASE)

Statement by The Honourable Asot Michael, Minister of Tourism of Antigua and Barbuda on discussions held on Wednesday 19 July 2017 with senior representatives of Sandals Resort International and subsequent clarification by Sandals Resorts.

Minister:
1. Yesterday, Wednesday, 19 July, members of the Cabinet met senior representatives of Sandals Resort International to discuss the proposed closure of the Sandals Resort in Antigua for five months.

At the conclusion of the discussion, the Sandals representatives recognized the government’s resolve that the Resort will not be closed for five months.

Instead, the representatives gave the undertaking that the period of closure for what the representatives described as ‘urgent repairs, would be reduced, taking account of the government’s insistence on three months or less.

Unlike the statement made in a letter of today’s date the undertaking given to the government was not unclear; it was specific and pellucid.

Sandals:
The Sandals Team had a meeting with the Antiguan Cabinet on July19th upon their request.  Our Team made it clear that the scope of works identified in the original plan would take five (5) months based on the estimate provided to the Sandals’ Board by its Project Department. 

 

The Sandals Team undertook to Cabinet to engage with its Project Department to see how the period could be reduced.  At no time did the Sandals Team agree with Cabinet to reduce the period to three (3)months – the Team did not have that power and could not have done so without consultation with the Project Department and approval of the Board.  Indeed, toward the end of the meeting and after the team had made a detailed Power Point Presentation to Cabinet showing the extensive work to be done, the Prime Minister himself eventually asked if we could have the hotel opened in January and said he would be happy with that.

 

Minister:
2. We note that, in a letter to the General Secretary of the Antigua Workers Union (AWU), the Manager of Sandals Grande Antigua, committed only “to make every effort to reduce the period of repairs to three months”.

The government will hold the Resort’s owners and managers to the undertaking on which the government insisted yesterday in the Cabinet meeting.

We expect that, in the interest, of the workers, the AWU will join the government’s determination in ensuring that the period of three months or less is fully respected.

Sandals:
The ABWU had written to the Board of Directors a letter dated Tuesday July 18th, the day before the Cabinet meeting, in which they specifically requested that Sandals consider reducing the time frame, among other matters. This letter was acknowledged in writing by a letter on the same date, confirming that the board was assessing the AWU’s demand on the 18th.

Upon receipt if the Union’s letter the Board engaged in extensive discussions with the Project Department to discuss some of the proposal made by the Union and the decision which emerged from those discussions, which were later ratified by key Board members, is that some aspects of the maintenance work would be rescheduled and staggered over a period of time in an effort to reduce the actual closure period to three (3) months.  Let us be clear – our Project Department agreed to try and work with the three (3) month closure period on the assumption –

 

  • that the customs and entry processing of materials required for the works would be fast-tracked by Government; and

 

  • that work permits for engineers and other keys member of the Project Team assigned to the work would be promptly granted.

 

When the above matters were agreed, we were able to confirm to the Union that some of its proposals with respect to the execution of the works were accepted.

 

Minister:
3. The Cabinet of Antigua and Barbuda also discussed with the Sandals senior representatives vacation pay and other payments to which the workers are entitled as stakeholders.

We note that in the letter to the AWU General Secretary, the commitment given by the Sandals Manager is not as precise.

He offered and I quote only “to work together to address other areas of concern”.

Again, we expect that the Union will join the government’s resolve to protect all of the workers’ interests.

 Sandals:
We have had a solid working relationship with the union, and are certain they a quite capable of negotiating in the best interest of team members. For our part Sandals has always been known to do what is right and in the best interest of our team members.

 

Minister:
5. The suddenly announced closure of the Sandals resort for five months, without providing any time for planning for such an eventuality, is clearly unacceptable to our Government because of the confusion it would cause for the Hotel’s workers and for the tourism industry.

Had Sandals given adequate notice of closure for repairs and refurbishment, the Government would have taken every step to shorten that time and to advise all industry partners, locally and internationally, of this development in ways that would have created the least disruption and pain.

It is most unfortunate that this development was sprung upon the country, the industry and the workers at the hotel.

Sandals:
We are surprised that the Minister’s statement characterized the announcement as occurring “suddenly” and “without providing any time for planning for such eventuality”.  The letter was sent to the Minister, along with the Prime Minister and Attorney General on July 13 and will take effect on September 20th.

We humbly assert that we have done exactly what the Minister has suggested – we have given timely and adequate notice. We were not unmindful that there are many constituents that are affected by our decision – not the least of which includes our marketing partners and valued customers and suppliers.  An ill-timed announcement could have seriously damaged the Sandals Brand and materially affected our booking pipeline.

We want to assure you, Minister, that a lot of thought went into the timing of our announcement and the period for executing the works and these issues were not taken lightly.

 

Minister:
6. Even despite the lack of proper notice, the Government yesterday offered to waive all duties and other fees and taxes on all materials and other goods required to carry out the repairs within three months or less.

Sandals:
Again, while we note the comment, we want to repeat that at no time during that meeting did we give any commitment to a three month timeframe.

 

Minister:
7. It will be recalled that the Government and people of Antigua and Barbuda have already given considerable tax-free concessions to Sandals Resort, and only recently, even more allowances were granted over the payment of ABST which had been collected and not paid to the Treasury of Antigua and Barbuda.

But cooperation is a two way process.

Sandals:
We note with concern once more the assertion that Sandals collected ABST and did not pay it over to the Treasury.  Over the years our accounts have been audited by Grant Thornton, an international accounting firm and also by your own Tax Department which, in its last audit in 2016, issued a letter confirming compliance with the law.  At no time, did Sandals charge ABST and kept it.   Based on the terms of the Development Agreement which it had with the Government it was exempt from ABST and accordingly it did not charge ABST at all.  Similar statement has been made by others and has been repeated too often for Sandals to ignore and will be dealt with as a separate issue.

We agree that co-operation is a two-way process.

 

Minister:
8. The government and people of Antigua and Barbuda have provided significant concessions to Sandals which increases its profitability; the country is entitled to at least a minimum return on its substantial allowances to the Resort.

Sandals:
Over the past 12 months Sandals has injected directly some XCD$95million into the economy of Antigua and Barbuda including salaries, taxes, payments to suppliers, utility and other payments. We are the leading earner of foreign exchange and a major private sector employer. If you extrapolate this over 25 years, I think it would fair to say this represents more than just a ‘minimum’ return.

 

Minister:
9. Closing the hotel for five months is not only discourteous; it is harmful.

In this regard, the government of Antigua and Barbuda, in keeping with its duty of care for the workers in the hotel industry and for the people of Antigua and Barbuda as a whole, expects all hoteliers to treat the country and its workers with respect and with dignity at all times.

And, we will not allow disregard for the rights of the country and its people.

Sandals:
We agree that all hotels workers across Antigua should be treated with the same respect that the team members of Sandals Grande Antigua are treated.

Furthermore hotels in the Caribbean close regularly during the off season. Sandals Antigua has never done so over its 25 years of operations in Antigua and has remained open over the high and low seasons whilst many hotels close. We are not closing on account of low season or low occupancy.  We have made it abundantly clear that we are closing to undertake well-needed maintenance works.  The decision to close was based on the recommendation of our professional Project Team and that decision was accepted by the Board after due consideration of all relevant factors.

 

One thing is sure – the maintenance work must be done. Keeping the hotel open during the execution of the works would only have extended the period of disruption and would have caused considerable damage to our Brand by low guest scores – in many instances resulting in claims for holiday refunds.  The stark reality is that no guest pays to holiday in a work site.

 

 

Minister:
10. We will insist that the undertakings given by the Sandals Representatives at yesterday’s meeting with Cabinet members be fully implemented.

We thank all the hoteliers who demonstrate an attitude of shared and conscientiousness for the industry and for Antigua and Barbuda.

Sandals:
This closure of the hotel will hurt Sandals like all others in the short term but, in the long term, will be beneficial to all concerned including the Government and people of Antigua as our expectation is that a materially-enhanced product will perform much better in the marketplace.   We have found the reaction of Government to our decision surprising and it has left us bewildered.

 

Our interest and that of the Government and people of Antigua are totally aligned on this matter and the decision to undertake the requisite works will not only generate employment for other persons but will, in the long run, ensure to the benefit of all and this is why we have found the Government’s reaction absolutely astounding. Surely our incurring of capital expenditure on the hotel in Antigua should be seem as a demonstration of confidence and to characterize it as “sabotage” (as we have seen in some utterances) is unwarranted.

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