Tower Hotel shuts, workers left stranded

Hotel Tower shut abruptly yesterday, leaving dozens of workers without pay and raising questions about its future.

Nonpayment of wages coupled with the abrupt termination of their services saw employees of the landmark Georgetown hotel on Main Street staging a vocal afternoon protest outside their place of work. Tower, which has struggled for business in recent years, had been on the market since March but there has apparently been no takers and mounting bills saw power to the hotel being cut this week.

Its last known owners are West Demerara businessman Salim Azeez, US-based businessman James Manbahal, Varendra Shiwratan and Bharti Persaud Misir. The owners have not been available to the media since taking over the establishment in 2009.

Hotel Tower on Main Street
Hotel Tower on Main Street

“Three fortnights now I ain’t get a blind cent only promises then today we get a letter saying the place closing from today and nobody ain’t saying weh people hard earn dollars deh… they ain’t even had the decency to come tell we to we face,” an angry female employee told Stabroek News.

The woman along with about 30 other employees, mostly female, vented their anger and frustration yesterday after they were told through an anonymous phone call that letters were at the front counter for them. They said when they collected the letters it stated that yesterday was the last day of work for them as the hotel was closing.

Efforts by Stabroek News to contact the management of the hotel were futile. This newspaper was told that the General Manager of the Hotel, Mario Deganmarco, had locked himself in one of the hotel rooms and was waiting until the staff had left as he was unwilling to face them.

“Effective the 24th May 2014 ALL STAFF will be temporarily laid off until operating conditions are made safe to continue business operations,” stated an excerpt of the letter received by the employees.

The staff also informed that the Guyana Power and Light Company had cut power to the building for nonpayment and this had caused the guests to leave and some who had paid in advance to continuously complain.

While Stabroek News was there, the darkness forced the protest to the stairs of the building and onto Main Street.

“We could understand if someone explained that we would go home until things picked up because we all work here and know that times really hard here but not a word,” said Simone Boucher who said she is owed over $23,000.

“The… accountant left saying she gone to lunch and beat out and leave we in the sauce now. How can we go home without any money? These people fuh real?” one of her coworkers chimed in.

The guests of the hotel had to seek alternative accommodations.

One guest, who gave his name as Panama, lamented the way in which the services of the employees were terminated. “Can you believe I had to take money from my pocket and give these ladies…most of them are single parents and are here working without being paid,” he said.

He explained that he has been a regular guest at the hotel for over 20 years and could not believe the shoddy condition to which it has now come to.

The manner of the closing yesterday pointed to the continuing difficulties facing the hotel business, particularly during the off-peak season. The manner of the termination may likely cause the Ministry of Labour to become involved.

 

Highs and lows

 

Hotel Tower first opened its doors in 1866 on the site on the present Guyana Post Office. In 1910, it was re-sited to its present location under expatriate ownership. In 1946, the property was acquired by a Guyanese/ Barbadian family, the Humphreys, along with 50 other shareholders and re-named Hotel Tower Ltd. Though the next 50 years comprised troughs and peaks, the Tower’s ideal downtown location made it attractive to its guests.

In 1966, on the occasion of the Hotel’s Golden Anniversary, a commemorative stamp was struck in the hotel’s honour. The hotel’s then executive chairman, Richard Humphrey, declared that the establishment was proud to wear the title of “leading businessman’s hotel in Georgetown.” After that the Tower’s fortunes began to decline. Less than two years later it had drifted into financial difficulties.

The owners persevered, however, and in 1988 it immersed itself in further debt to finance the upgrading of the facility to a five-star hotel. The upgrading plans included the establishment of the Emerald Tower Rainforest Lodge at Madewini and a tour operations facility at the hotel. That initiative failed to bail out the Tower.

The hotel had run into difficulties in the 1990s when it invested too heavily with the aim of becoming a five-star hotel. The investment decision was taken when the economy was booming, but the momentum was not maintained and the occupancy level fell in the face of political turmoil. As a result, the lack of returns did not allow for money to be reinvested because it was diverted to paying crippling debt.

The establishment went into receivership to the Bank of Nova Scotia on April 12, 1999. The bank appointed Chartered Accountant Christopher Ram as Receiver/Manager of Hotel Tower.

Even as efforts were made to turn the fortunes of the hotel around and to find a buyer, business continued to decline, with the average monthly room occupancy dipping to approximately 25 per cent of total market share.

On September 2, 2002, Stabroek News reported that the hotel had moved from a loss-making situation to making operational profits, and that it had doubled its available rooms by over 100 per cent, from 30 rooms in 1999 to around 62 rooms at that time.

The managers had sought to raise the sum of $250 million to lift the hotel out of receivership, paying $3.5 paid million monthly to the bank.

Later, in his capacity as Receiver, Ram advertised a Request for Proposal for the purchase of the assets of the hotel.

In mid-2003, the Bank of Nova Scotia ceased its receivership hold on Hotel Tower Ltd in an equity transaction which saw a local investor group with businessmen RL Singh, Amarnauth Muneshwer and Ashoka Singh of Canada emerge as the new majority shareholders. Some of the small shareholders who were originally with the hotel had retained their business interest while Humphrey opted to sell his 60 per cent stake in the business.

The hotel was again sold in February 2009 to Canal Hospitality Inc, a business partnership headed by Azeez. The entire hotel was completely remodelled. A new bar, nightclub and gym were among the features added.

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