Karisma Sugar Cane mega-hotel project on pause

The mega US$1 billion mega-resort being developed by Karisma Hotels Group in the garden parish of St Ann is on hold, with the hotel company and Jamaican officials putting the blame for the delay on the coronavirus.

Karisma aims to build 10 hotels over 10 years, encompassing 4,700 rooms, that would sit on a large 226-acre property located between Salem and Runaway Bay.

The development, called Karisma Sugar Cane, was launched officially in early 2020 with the promise of 10,000 jobs for St Ann, and construction on the first phases was to have begun in the first quarter of fiscal 2020-21 and completed 18 months later.

Preparatory works were under way when the COVID-19 pandemic emerged, but the site is now idle. There was equipment sitting at the site, but no one operating them, and no other visible activity when the Financial Gleaner visited recently.

It’s led persons in the area to speculate about the project, but JAMPRO president said the development is only ‘on pause’ because of COVID-19; and Tourism Minister Edmund Bartlett gave a similar response, saying the downturn in the travel and tourism markets led to a rethink on the timing of the development.

“We all know of the effects of the pandemic and how it has slowed up the likes of those connected with the Sugar Cane Bay project. But whilst they are slow, others are ploughing ahead with new projects and expansions, so it is just a matter of waiting to see what happens after the COVID period,” Bartlett said.

Senior Vice President of Business Development at Karisma Hotels & Resorts, Mario Mathieu, acknowledged the lull in the project, but said it “should not be taken as the project being in trouble.” He also noted that they were in the process of closing financing at the time the pandemic hit.

The hotel company is currently assessing the right time to restart construction, he added, while asserting that the project partners are still behind the development.

“It’s clear that the pace that we have right now is not what we had after we launched early last year. Our partners are still on board with us, but this is a time for assessment and recuperation and going forward as soon as possible,” Mathieu said.

The property, to be developed to a five-star rating, will be operated under the Karisma Hotels Group, which has 26 properties in Latin America, the Caribbean, and Europe under several brands, including El Dorado, Azul, Generations, Sensatori and Nickelodeon.

Karisma entered Jamaica in 2013 with the 148-room luxury boutique property, Azul Beach Resort, in Negril. Within a few years, the hotel doubled its room stock, according to Mathieu.

“Like everyone else we’d really like to get back to business as soon as possible. We want to have beautiful properties with happy guests but the focus right now is on the properties that we have at this time. So soon as there is clarity on the pandemic, we’ll be on the ground,” he said, regarding Sugar Cane.

But as to when that’s likely to happen, and the new end date for the project, Mathieu said the complex nature of such a big project required coordination of different partners to reset timelines; and that a restart date would only be released when there is more certainty.

What’s most important to get the ball rolling, he added, is for Karisma to get back on the ground to continue the infrastructure work.

“This is a project with several different funding components. There is the part that falls to us, and that is infrastructure; and then, every other project that comes, there is a different set of funding. So that leaves some of the projects with us and some with partners, and some of these are with third-parties,” he said.

Karisma intends to develop the resort as initially designed, but is considering whether to reschedule various elements.

“We’ve looked at a couple of options that arise obviously from this pandemic,” said Mathieu. “We were looking at doing the first property of 750 rooms, but based on the pandemic and perceptions which may change going forward, density and so on, we’re toying with the idea of doing two different hotels of a smaller size.”

The total room-count would be about the same, across both hotels, he added.

neville.graham@gleanerjm.com