SuperClubs selling Hedonism II hotel
Avia Collinder, Business Writer
SuperClubs said Tuesday that it was finalising the sale of Hedonism II resort in Negril, but that the Issas would retain a stake in the property.
The sale is its second for the year, but the hotel group said the disposals ought not to be read as a disinvestment strategy for Jamaica.
"We remain invested in Hedonism II, however, the transaction today brings in serious and substantial foreign investors who will guide the expansion of the Hedonism brand internationally," said SuperClubs vice-president of marketing and environmental affairs, Zein Issa-Nakash.
On Wednesday, SuperClubs Chairman John Issa announced negotiations to sell Hedonism II to Marshmallow Limited.
Marshmallow is headed by majority shareholder Harry Williams. Partners in the company include Jon Gross of UnWind Travel (Fluffernutters); the Issa family; and Kevin Levee, the current general manager who has worked with the hotel for 28 years.
The shareholdings were not disclosed. The group said in a release that upon conclusion of a deal, there will be a smooth transition of ownership with no service interruption.
"All reservations and tour operator contracts will be honoured and the property will not be rebranded and will continue to deliver and enhance the Hedonism holiday," the statement said.
Earlier in the year, SuperClubs also sold Breezes Trelawny to integrated Canadian tour company Sunwing.
Sunwing currently manages the former Breezes Rio Bueno hotel, also known as Braco Resorts, that SuperClubs ran up to April 2011 on behalf of owner National Insurance Fund (NIF).
SuperClubs also gave up the operation of Hedonism III, which was placed in receivership in March 2011 by controlling partner Development Bank of Jamaica (DBJ). Negotiations are ongoing with an unnamed 'preferred bidder' for sale of the hotel, which is located in Runaway Bay, St Ann.
The development bank holds a controlling majority of 54.35 per cent in the hotel's holding company, Runaway Bay Development Limited; Scotia DBG (now Scotia Investments Jamaica Limited) owns 30.43 per cent; and SuperClubs, through Village Resorts, owns 15.22 per cent.
Runaway Bay Developments was placed in receivership by its first-ranked creditors of four banks to recover a debt of US$20 million.
In September 2009, the SuperClubs group also gave up the management of Breezes Montego Bay, another NIF-owned property.
Issa-Nakash said this week that the hotel group has not lost interest in Jamaica. "We are constantly looking for attractive opportunities in Jamaica and elsewhere," she told the Financial Gleaner.
SuperClubs is trying to buy out its partner, the Urban Development Corporation (UDC), to take full control of Breezes Grande Negril, a 200-room resort sitting on 22 acres at Bloody Bay. The negotiations are being handled by agent DBJ on behalf of the UDC.
DBJ said in the third quarter that the negotiations would close before the start of the new year.
Earlier, Issa also expressed interest in the purchase of Braco, but there is no current word on whether NIF is still willing to dispose of the hotel.
SuperClubs' remaining properties in Jamaica are Breezes Grand Resort & Spa Negril, two ROOMS resorts in Ocho Rios and Negril, and the Negril Beach Villa.
With regards to hotels sold, Issa-Nakash notes, "Each transaction has been dealt with on its own merit. It has always been our policy to take advantage of opportunities as they present themselves."
She declined comment on how revenue for the group would be affected by the sale of the Negril property.
Meantime, John Issa described Hedonism II as "the ultimate gem in its market, not only is the location on the seven-mile beach in Negril ideal, but it is the storied resort that all its competitors attempt to live up to".
"It is an important part of my contribution to tourism and I am happy to be in discussions for it to be preserved for many years to come by people that hold it as dear to their hearts as I do," the SuperClubs chairman said in the release announcing the pending sale.
Levee said a US$10-million upgrade was planned for the resort.
"Our first goal is to bring the operation of the resort back to 100 per cent, and to this end we are immediately investing in many of the facilities," the GM said in the release.
Marshmallow Limited was cited as the source of the US$10 million for a renovation plan to begin immediately on finalisation of the deal.