Janet Silvera, Senior Gleaner Writer

Western Bureau:

Spanish hotel chain Melia has been given the nod by the National Investment Fund (NIF) to operate the Braco Hotel on a long-term basis.

The management contract was signed recently with Melia expected to take over the resort after the Blue Diamond Hotel Group, which has been operating the hotel since late 2011, makes its exit at the end of May.

Blue Diamond was the second operator at the 84-acre resort in 16 years. Before it, SuperClubs managed the property for about 15 years.

The Gleaner understands that up to seven companies showed serious interest in acquiring the management contract of the 226-room resort. However, only two qualified. Braco is valued at US$35 million; the NIF contemplated selling the property and was looking for US$20 million upwards, highly placed sources told The Gleaner.

"It was more important for the NIF to keep the asset and get someone to run it," said the source, adding that the track record of the Spaniards has shown that they can succeed in Jamaica.

The profit from this deal, the source said, would accrue to the NIF, and money earned would go towards the pension fund.

"They have a reputation for producing profits," said the source, noting they were willing to pump millions into a refurbishing and upgrading exercise.

Melia is the sixth-largest hotelier in Europe and owns about 50 per cent of the hotels it manages, while the other 50 per cent are operated on management contracts. The group is reportedly planning to add more than 400 rooms to Braco, even though the NIF contract stipulates 600 rooms.

janet.silvera@gleanerjm.com