By Lavern Clarke, Staff Reporter
Carreras chairman,
George Ashenheim, gestures to shareholders at the company's annual general meeting held at the Hilton Kingston Hotel in St. Andrew on Monday.
THE CARRERAS Group is hunting internationally for new managers of its Sans Souci Resort & Spa, having cut ties with John Issa's VRL Services Limited in April.
Carreras chairman, George Ashenheim, said Tuesday that a new management deal should emerge in the next two months. From the nine contenders, including several international hotel groups and one local, Ashenheim said they have narrowed the candidates to a select group over the past five months, and are soon to complete negotiations and sign with the "best possible candidate."
Carreras said there is a dispute over the termination of VRL's services and that the matter is to go to arbitration. But the company has made no provisions for any liabilities in its accounts, on the advice, it said, of
Sans Souci's lawyer that the termination was lawful.
Chief executive officer, William Telling, says some of the companies showing interest include, Hilton, Inter-Continental, Wyndham, Four Seasons, and a couple of Spanish groups not yet doing business here.
"We are pleased with the level of high-end chains that have shown interest in the property and working with us in Jamaica," said the chief executive.
The company is considering different management arrangements for now, but does have long term plans to sell Sans Souci if it gets a good offer.
CORE BUSINESS
Carreras, now a $13 billion company, is in the process of re-organising, with the view of returning to its core business of tobacco, a direction being pushed by its parent, British American Tobacco. That process should run another three to four years, said Telling.
The chief executive and his chief financial officer/company secretary, Marlene Sutherland, refused to comment on the hotel's value, but the company's 2002/03 annual report puts the open market value of "a subsidiary's hotel building" at $900 million as at March 31, this year.
Of Carreras' five subsidiaries named in the report, Sans Souci Development Limited is the only one listed as being involved in the hotel business.
Under VRL, the company that owns SuperClubs, Sans Souci was being operated under the chain's Grand Lido brand. Carreras however was dissatisfied, it said, with SuperClubs management strategy of discounting rates that SuperClubs had engaged in post September 11, 2001, and before that had concerns that the hotel was not profitable. Called for comment on the management contract termination, the SuperClub's office said both Mr. Issa and daughter Zein Nakash were off the island, and that a representative of the family would only offer a response of, "no comment."
Telling told Wednesday Business that while the hotel made a profit in 2000, it was making net losses when they took back operational control this year. He attributed some of the losses to discounting.
"Sure, after 9/11 everybody offered discounted rates. But you get into a discounting cycle and its very difficult to get out of," said Telling. Since May, the property which has the same management team headed by general manager Pierre Battaglia, has been going up-market, and is being positioned as a "high end all-inclusive resort."
Telling says they have raised room rates, and that following poor performances in May and June, are now seeing strong interest from the Japanese market, whose bookings in some weeks, he said, eclipses those out of the United States. But the hotel is also targeting locals. "We have had a lot of conferences and banqueting events as a result," he said.
