Jamaica
News - Real Estate - Projects (June 23, 2004)
$1.1-b Sunset
Beach expansion begins next month
The Sunset Beach Resort in Montego Bay
is to begin its J$1.1-billion expansion in July, an investment that will add 210
rooms to the hotel, and further entrench the Karl Hendrickson family interest in
the tourism industry.
Yesterday, the
general manager, Evatt Bloomfield, laid out a specific time line for the
two-phased project.
Bloomfield said that the expansion would bring
greater economies of scale to what is already a profitable operation at the
430-room resort.
"We have been doing reasonably well, so
expansion becomes a reasonable consideration and a larger facility allows for
economies of scale which will bring benefits at the end of the day," he
stated.
At the end of the expansion, scheduled for
completion in time for the 2005/06 winter tourist season, Sunset Beach will have
640 rooms and will be second in size only to Jamaica Grande in Ocho Rios, which
has 720 rooms.
Bloomfield said that the investment would make
the enterprise more competitive in a market that was awaiting the entry of
several mega-resorts.
"With more players coming in the growing
market, there is going to be major competition in the marketplace," he
said. "We know that being able to offer bigger and better and a more
diverse product will certainly give us an opportunity in the market."
Bloomfield explained that the first of the two
phases would cost between US$3 and $4 million, and would involve the
construction of a huge water park, which would feature water slides, a pirate's
ship and other amusement type facilities.
During this phase, a new beach grill and
entertainment area would also be constructed, as well as a tennis pavilion and a
health services centre.
Work on this phase is expected to be completed
in time for the 2004/2005 winter tourist season, which officially begins on
December 15 this year.
The second phase will involve the bulk of the
investment. Scheduled to begin in August, this phase will see the construction
of 210 rooms, a 400,000-gallon capacity pool, three restaurants and modern
meeting facilities.
Completion date is set for late next year.
This is the second major refurbishing being done
at this property by the Hendricksons since they acquired the former Seawind
Towers complex from the Montego Bay Freeport for $84 million in 1997. After the
initial major expansion and refurbishing, the hotel was rebranded as the Sunset
Beach Resort and Spa.
Ahead of next month's expansion, the
Hendricksons acquired several acres of adjoining lands from the Montego Bay
Freeport.
This latest investment will further cement the
Hendrickson family as Jamaica's third largest operator of hotel rooms - after
Sandals owner Gordon Butch Stewart, and SuperClubs chairman John Issa. This will
bring the family's room count to just under 1,300. They include:
. the 127-room Courtleigh Hotel and Suites in
Kingston,
. the 170-room Knutsford Court Hotel also in
Kingston,
. the 85-room Palms at Sunset - the former
Negril Cabins acquired on December 15 last year,
. the 256-room Vieux Fort in St Lucia, which was
bought last year and is now undergoing extensive renovation.
The Hendricksons made an unsuccessful bid to
acquire the Jamaica Pegasus Hotel in Kingston, and also held talks with Finsac
to acquire the Jamaica Grande Hotel. These talks have not borne fruit. The
family recently bought the Island Life building - one of Kingston's best-known
landmarks - from Josline Jamaica. This acquisition immediately made them one of
Kingston's largest players in the real estate market.
But the Hendricksons started off in a business
that is as far removed from tourism as possible - the baking industry, where
they operate Jamaica's largest baking enterprise: National Continental, Yummy
Bakery, and Holsum Bakery.
They also own Jamaica's second largest chicken
processing company, Caribbean Broilers; Blue Mountain Inn Hotel and the Ruins in
Ocho Rios.
Yesterday, Bloomfield stated that the Sunset owners were moving quickly with the expansion so as to give the
resort an opportunity not only to face the expected competitive challenges in
the market but to place it in a position to take advantage of the continued
recovery that was expected in the tourism industry.
The hotel, which gets about 70 per cent of its
visitors from the USA, has been running at roughly 90 per cent occupancy, he
said.
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