THE Carreras Group will, on April 30, terminate the management contract that its hotel—Grand Lido Sans Souci—has had with John Issa`s SuperClubs since 1993, and will place the property on the market for sale.
Carreras will install its own managers to continue operating the hotel under the name Sans Souci Resort and Spa, until a buyer is found, the company said yesterday.
But there is a dispute between SuperClubs and Carreras, apparently over aspects of the termination protocol, and which both parties say they will attempt to sort out, through the intervention this week of three arbitrators. “We have been terminated as managers of the resort,” said Zein Issa-Nakash, SuperClubs` vice-president of marketing and public relations, in confirming yesterday evening a statement issued earlier in the day by both parties.
“The owners of the Sans Souci Hotel have taken a decision to put the hotel on the market for sale,” said the joint statement. “Subsequently, they terminated the management agreement with VRL Services (a SuperClubs subsidiary) and will put in place their own interim management. This termination has given rise to a dispute between the owners and the management company, which will shortly be the subject of arbitration proceedings.”
The 146-room property is located at the border of Ocho Rios and St Mary. Issa-Nakash told the Observer that the three-member panel would hear both sides and then decide “whether the termination was wrongful or not”.
“I think they are in the process of selecting the arbitrators and then proceedings should start,” she said. “Because it`s gonna go to arbitration I can`t really get specific.” The hotel, she disclosed, had posted gross operating profit every year since it came under SuperClubs` management, including 2001 when the island`s tourist industry was hard hit by the fallout from the September 11 terrorist attacks in the USA.
But a Carreras spokesman insisted yesterday that the property had not provided what the owners considered to be a satisfactory return on their investment. The sale, he explained, would allow the parent company to focus on its core cigarette-making and financial investment activities. Importantly, the sale of this property marks the exit of Carreras from all its major non-cigarette making enterprises, having in May 1999, divested its Jamaica Biscuit Company to Caribbean Brands Ltd. At the end of 2001, it closed down its printing subsidiary, Graphics Arts Ltd.
Carreras now operates the Cigarette Company of Jamaica that manufactures, imports and distributes cigarettes. But most of its nearly $3 billion annual profit is made from the interest earned on its $15-billion cash and investment portfolio.
Carreras became owner of Sans Souci in December 1990 when it acquired majority shares from the Pan Jamaican Group, having up to then, been a minority shareholder in the venture. The hotel was then operated under various management arrangements, until SuperClubs was awarded the contract in 1993, and converted it into an all-inclusive property.
The termination of the SuperClubs management will be the second in two years for the Issa company. In 2000, Guardian Life, which had acquired from the Government, Boscobel Beach Hotel located a few miles from Sans Souci, terminated the contract that SuperClubs for years had for the management of the hotel. The contract was subsequently awarded to Gordon “Butch” Stewart`s Sandals Group.
Yesterday Issa-Nakash said that the developments would have no immediate impact on the guests now at the resort. “The guests are totally unaware,” she said. “The impact on the guests would be minimal. It continues to operate as a SuperClubs resort until April 30. There will be no change in management, infrastructure, in whatever, until April 30.”
The hotel is now fully booked with over 200 guests. The SuperClubs chain owns, leases or manages several hotels in the Caribbean. In Jamaica, these include Grand Lido Negril and Grand Lido Braco, Breezes Runaway Bay and Breezes Montego Bay, Hedonism II and III, and the Starfish Resort in Trelawny.
There are also properties in The Bahamas, Curacao, Brazil, the Dominican Republic and Cuba where two more properties are to open soon. There are also two properties now under development in Brazil.
The 250 non-unionised staff members were informed of the changes at a meeting yesterday. Some expressed ambivalence about the move.