NIF to spend J$3b on Braco renovations
Published:Wednesday | April 24, 2013 | 12:00 AM
The National Insurance Fund (NIF) plans to spend about J$3 billion on the upgrade of the Braco Hotel in the hope of securing a long-term management contract with a new operator.
"It could be more, it could be less," said a source.
The renovation will proceed if Cabinet approves the agreement for the new operator, which a Gleaner report in March previously identified as the Meliá group of Spain and which Finance Minister Dr Peter Phillips confirmed in his Budget presentation.
"Meliá Hotels International, a global chain, will be entering into an agreement to operate this hotel. Its 226 rooms will undergo major renovation in the coming months," Phillips said.
The lease will last 10 years with option to renew.
NIF charged former operator SuperClubs group a fee of up to US$200,000 monthly up to September 2009 when the agreement ended. The pension fund is earning less than that from the current short-term operator - the current fee was not disclosed - but hopes to increase the fee under the deal with Meliá.
However, the rate for the new operator is said to be tied to the refurbishing programme.
The property was last valued at US$29 million and is currently being revalued, as are all other properties belonging to the NIF. The Fund acquired the hotel in 2000 for US$23 million.
SHORT-TERM LEASE
The Blue Diamond group of Canada is currently operating the hotel under short-term lease, which runs out in May.
The repairs will be undertaken before the long-term operator takes possession.
"The hotel will be closed for renovation first," the NIF said. "We have done no extensive renovations for a while."
Meliá's website indicates that it has hotels in 30 countries globally - across Africa, Asia, Europe and the Americas - including 159 in Spain itself. Ninety hotels are in major cities in the four continents.
Its brands include Meliá, Gran Meliá, ME by Meliá, Paradisus, Innside by Meliá, TRYP by Wyndham, Sol Hotels and Club Meliá.
The group has been publicly traded since 1996, with a 63 per cent shareholding by the Escarrer family.