Explaining its abrupt closure on May 23rd, the Tower Hotel yesterday said its business had declined dramatically in recent times and it assured that assets will be liquidated to pay outstanding amounts to its employees.
Its statement after days of silence signals that the hotel which had operated from the Main Street location for more than a century will likely not resume business.
“In recent times, the Hotel has seen a dramatic decline in business and despite the best efforts of management; the hotel was still unable to meet certain financial obligations… While the Hotel remained asset rich, there was insufficient liquid cash available to management to finance the day to day operating expenses of the hotel,” the statement read.
Tower, which has struggled for business in recent years, had been on the market since March but there have apparently been no takers and mounting bills saw power to the hotel being cut last week.
As executives of the cash-strapped hotel today plan to meet with the union representing laid- off employees, the company announced that it plans to sell assets to meet payments of wages and salaries for the workers within one month.
“Management did not have the liquid cash to cover the payroll and as a result employees’ salaries were not paid…steps are being taken to liquidate assets to cover these outstanding salaries owed to employees within a month,” the company said in the statement.
Last Friday, the hotel abruptly closed which saw employees venting their anger and frustration after they were told through an anonymous phone call that letters were at the front counter for them. They said when they collected the letter it stated that that day was the last day of work for them as the hotel was closing. They continued their protests on Saturday.
The hotel said yesterday that it was the cutting off of power by the Guyana Power and Light that forced the closure of the facility and that alternative arrangements were made for the guests who were staying at the entity.
President of the Clerical and Commercial Workers Union (CCWU) Sherwood Clarke told Stabroek News yesterday that the union will today meet with Director of Tower Hotel, Varendra Shiwratan to discuss the way forward.
The CCWU President informed that yesterday he met with the hotel’s attorney Peter Hugh and that payment of the workers was discussed. Hugh, he said, left and promised to return with the calculations of monies owed to the employees.
Hugh told this newspaper that he did meet with the Union and that the hotel is now charged with tabulating the employees’ wages after which he will again caucus with the union. He said that he could not give a timeframe on when this process will be completed.
The last known owners of the hotel are West Demerara businessman Salim Azeez, US-based businessman James Manbahal, Bharti Persaud Misir and Shiwratan.
Hotel Tower first opened its doors in 1866 on the site of 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.
The hotel ran into severe 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.
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 Richard 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.