In the wake of the passing of legislation for a new hotel in St. George's Vexed says he doesn't get it:
I don’t get it:* With the disastrous terms limits policy, the PLP says there’s not enough room and forces out hundreds of expat workers who are active contributors to our economy and community thus rocking the sector that provides upward professional mobility for Bermudians and generates the most tax income for Bermuda.
* With its rapid development policy, the PLP is giving up public land and providing huge tax relief to build hundreds of new condominiums for sale to expat investors to create hospitality jobs that most Bermudians don’t want and will be staffed by low-paid expat workers.
Actually, I don’t think Government gets it either.
Well, yes and no.
Bermuda's tourism product needs refreshing and revitalising, I don't think many people (including Vexed) would disagree with that.
But as highlighted above, there is a serious disconnect in the way our low-headcount high-margin financial services industry is being treated in favour of the introduction of the complete opposite: low-margin high-headcount hotels (if you ignore the massive residential real estate sales side of this).
A new hotel in St. George's is long overdue, but I seriously question the economic viability of it. I also struggle to see where the funding is going to come from in the current anemic credit markets. The financing just isn't there.
But ultimately, I believe this (Southlands etc.) is about Ewart Brown's legacy (and ego). Every Premier wants a legacy (hence why most reach for the Independence poison chalice), and it seems to me that Ewart Brown has staked his on delivering the first new major tourism development to Bermuda in decades.
He's willing to give very generous terms away to secure this legacy.
The problem as Vexed lays out, is that staffing these mega-hotels (Southlands etc.) requires tons of low-paid staff. Bermudians won't/can't do these jobs (can't because the wages will be inadequate) so the anti-immigration Government is advocating a plan that they say will create jobs for Bermudians but will create far more for a massive influx of low-paid foreign workers while they simultaneously chase out high-earning professionals who have a far greater economic impact on Bermuda.
The other problem, or at least one of the other problems, is that this legislation appears to be a marketing tool for the developer to use to try and raise capital for the project that admittedly has none, not to put the final piece of the puzzle together.
The whole thing doesn't feel nearly as appealing once you get into the specifics and reality of the situation. It all feels very desperate, the needs of Bermuda's tourism product and St. George's notwithstanding.
There's also the problems with the length of the lease etc.. But we know that Premier Brown is concerned about headlines not details.
I'd also note, if I may show my cynical side for a moment, that the developer has 5 years to use it or lose it with this legislation.
Five years means that if this were to be yet another failure to launch at the old Club Med site, as we've seen many times with Dr. Brown's promises of a hotel in St. George's, the fallout will be pushed out post the next election.
Cynical I know.
Anyway, the optimistic side of me hopes this all works out for the benefit of St. Georgians and Bermudians, but the realist in me keeps saying "Yes but..."
Posted by Christian S. Dunleavy