Hotel projects valued at US$550m set for roll out
More than US$550 million of investments in hotel projects are rolling out this year and the next, according to the annual market filing by the Ministry of Finance released this week.
The spend spanning 10 projects does not incorporate the casino resort developments initially projected to break ground this year but are behind schedule.
The finance ministry's filing with the US Securities and Exchange Commission estimated the combined cost of nine projects at US$448 million but in its breakdown of investments - which actually listed ten projects, only eight of which had costs attached - the capex totalled nearly US$556 million.
This US$556 million ($70 billion) represents increased capital expenditure when compared with year earlier levels, which had J$44 billion of investments. Two years ago, the estimated investments totalled J$76 billion.
"The period of 2016-2017 will receive a total of nine hotels coming on-stream amounting to approximately US$$448.1 million in projected capital investment and represents a total of 2,205 new rooms. These investments include newly constructed hotels and hotels that are undergoing major restructuring, rebranding and expansion," said the document filed with the SEC. The filing offers an overview of the broad Jamaican economy.
The projects to be completed in 2016 or 2017 incorporate new properties as well as reno-vations/expansions. The properties and projected investments include:
• The former Wyndham Kingston Hotel acquired by Kevin Hendrickson - US$62.6 million and scheduled to open in April 2017;
• Royal Decameron Montego Bay scheduled to open in 2017;
- Royalton Negril, formerly Grand Lido Negril, scheduled to open in late 2016 - projected capital investment of US$150 million;
- Melia Braco Jamaica opened in January 2016 - projected capital investment of US$23 million;
- RIU Reggae (RIU 6) scheduled to open in November 2016 - projected capital investment of US$60 million;
- Azul Sensatori Negril Phase II scheduled to o open in 2016 - being constructed at a cost of US$45 million;
- Breathless Montego Bay Resort scheduled to open in late 2016 - projected capital investment of US$45 million;
- Royalton Blue Waters Resort (Royalton White Sands Phase II) expected to open in November 2016 - projected capital investment of US$50 million;
- RIU Palace Jamaica with expansion of 50 rooms scheduled to be completed in 2016; and
- Grand Bahia Principe expansion completed in April 2016 - projected capital investment of US$120 million.
The ministry separately adds that over the next five years approximately nine hotel projects, inclusive of property expansions, are projected to add 12,000 new rooms to the stock. They include: Spanish Court Montego Bay, a reconstruction and rebranding of former Breezes Montego Bay; Grand Lady Palladium Phase II; a new Secrets resort; Ocean by H10, Azul Sensatori, Melia Braco Jamaica, China Harbour, Forum Hotel, Celebration Jamaica Resort, Oceania Hotel, and Harmony Cove.
The filing did not name Karisma, but the hotel company is expected to invest US$1 billion in an expansive 4,000-5,000 room resort to be called Sugarcane by Karisma, at Llandovery in St Ann.
The Harmony Cove casino resort project, in which the Jamaican Government holds a stake, was estimated in the current filings to cost US$898 million for phase 1. The first phase, which has to deliver at least 1,000 rooms, is now expected to start during the "second quarter of 2017" and take three years to complete.
Full build out of all phases of Harmony Cove is projected to last a decade, incorporating several upscale hotels and residences totalling 5,000 rooms and a full range of amenities. The project has been a least a decade in gestation. In September 2006, the Government and the Tavistock Group entered into a joint venture agreement for its development. Jamaica is currently finalising Chinese backing for the project.
The finance ministry appeared to have made an error in its filing by naming Azul/Sensatori as a prospective casino resort development.
"Two of these hotels, Celebration and Azul/Sensatori, are slated for integrated resort type developments, which will include mixed-type rooms, casinos, water parks, entertainment complex, among others," stated the document.
However, the known candidates are Celebration and Harmony Cove.
The tourism industry earned some US$2.38 billion for the economy in 2015 with 3.69 million in total arrivals up nearly five per cent year on year. For the first two months of 2016, total visitor arrivals were roughly 749,000 an increase of 11.3 per cent compared to the same period in 2015.