Dr Keith Mitchell: Sandals boosted Grenadian economy

Mitchell was hosting an informal meeting with a contingent of Tobagonian hoteliers, business persons and Trinidad and Tobago (TT) media personnel who had journeyed to Grenada to experience first-hand the impact of the hotel chain on the Grenadian economy. The visit had been prompted by an announcement in June by TT Prime Minister, Dr Keith Rowley that Tobago had been earmarked for a 750-room Sandals Resort.

Mitchell, who had graciously agreed to entertain queries about the hotel chain’s impact on the Grenadian economy, pointed out that the island was experiencing a time of “structural adjustment” in order to rebuild the economy and decrease its budget deficit.

“We had to take some very strong corrective decisions to deal with the fiscal imbalance I met when I came in, [2013], now, usually when a country is going through a structural adjustment programme, it has to deal with deficit, it has to deal with growth, it has to deal with providing basic opportunities for the poor and the vulnerable, usually it hinders growth because there are loans we cannot take to expand economic opportunities yet last year we had the biggest growth in the region, for four years since 2008,” Mitchell said.

“Under the previous government, we had negative growth, we had slight positive on sometime, at the bend of 2013, it was four point something, and in 2015 we had 5.6 or 5.87 percent growth. And what has driven this one? Tourism. And Sandals has been a major factor,” he said.

“It has been of enormous benefit,” Mitchell said, and noted that although the alliance between Sandals and Grenada had been formed when he, [Mitchell], was on the Opposition benches. “There was a feeling that a good deal was obtained by Sandals with the previous government.

“And in examining the arrangement and recognising the potential and the positive impact on the tourism product, I gave my full support and I did attend the sod turning ceremony as Opposition Leader,’ he said.

And since assuming the Prime Ministerial position, he said his belief had not changed towards the Sandals brand.

“I have not changed my position, it has done an enormous amount to the country and its tourism product,” he said, adding, “the impact of Sandals was not just about the jobs that were created, which was quite significant, it was also about economic spinoff, the taxi men and the bus services were impacted positively, so too the food service providers in other areas were impacted.” He also noted that while Sandals enjoyed a “general tax holiday”, this did not include the issue of Value Added Tax, [VAT], being applied to its operations.

“It is a pretty general tax holiday, that was an initial concern originally and they did get a good deal, but the fact is when the hotel was opened and people saw the impact on the country in certain areas jobs, revenue, they asked what are you talking about, my revenue now has increased, the VAT that comes through has enormous impact on the revenue base of the country,” Mitchell said.

“VAT is a government tax and not part of the hotel, VAT is across the board,” he pointed out.

“So my thing about life is, I worry less about what I give you, I think more of what I am getting and that’s how I looked at it,” he said, adding, “if Sandals was not here, our tourism product would never be where it is right now, so we could have said no and not have given that level of generous concessions, but I think that has redounded beautifully for this country.

“You have to increase economic activity, that’s where the country has to invest its resources and today, all the people who have been complaining can tell you that they are doing reasonably now,” he said.

He said tourist arrivals in 2014, the first year Sandals Grenada had opened its doors, had witnessed an 18 percent increase, and in 2015 that percentage had increased.

Mitchell said the Grenadian economy was built on two main pillars of economic activity, agriculture and tourism, and that farmers were forming allies with both the Ministry of Agriculture and the Marketing Board to explore avenues to get more locally grown produce into the resort.

“The farmers now realise how they could have done better if they had prepared themselves more appropriately, so there is a move now to join hands with the Marketing Board and the Ministry of Agriculture to work with Sandals in getting Grenadian agricultural products into a sustainable business in hotels.

Because as Gordon “Butch” Stewart himself said, he would much prefer to see local foods, whether it is the oranges, bananas, whatever they are, pumpkins, the different things, but they want to have a consistent supply. We can’t have a glut today and tomorrow we get nothing, hotel or business can’t operate on that basis,” he said.

Asked what factors had prevented the farmers from supplying Sandals from its inception, he said, “I think traditionally they [the farmers], never had a united approach, and demand, so Sandals coming here to seek service in that area whether it is pumpkin, watermelon, whatever it is, it provides enormous opportunity.

And if you can provide constant supply you have a constant source of revenue for your family.” He also noted that agricultural input had correlated with the growth of the tourism sector while construction “has been driven by people coming in and Sandals being nearby, people coming in and seeing what the country looks like, a lot of people now looking at Grenada and in conjunction with that they, [Sandals] have taken the initiative of bringing some services here as well.” Asked about the impact on the other hotels, Mitchell said, “they all see this as aiding their own success. What has happened is that the Sandals presence has encouraged others to improve their hotel product. The Hyatt is looking at Grenada, and there are a number of brands that are looking at the country, so it has had enormous impact.” And regarding environmental concerns, he said some people may have had “some concerns initially when the project first came in, but the brand has done everything possible to deflect any concerns people may have had with them coming here. The issue of sewerage and treatment has been done in the such a way to convince people about the positive impact.

“We have no issue and Sandals understand that their brand has international connections and they cannot afford to do anything in any country that sends a wrong negative message because it will have negative impact on the brand, and that’s my point.

Whenever concerns are raised I ask people to consider the client they are talking about, this operations here is just a small part of its overall institution and therefore they have to ensure that they do nothing that creates a negative problem for themselves,” he said.

However, Mitchell said while the island had experienced an increase of visitor arrivals from the United States, Canada and the United Kingdom, he pointed out that the inter-CARICOM market remained a ‘major problem’ as there were inconsistent travel facilities between the islands.

“We are getting foreign airlines coming more but the major problem is the Caribbean market,” he said, adding that travel between CARICOM countries was not taking place as no regional airline flew directly between some islands, while others required connecting flights between islands.

“The fact is we boast in the Caribbean about one place to do business. We are family, and yet the family can’t go and see one another so what is this nice talk about freedom of movement and CSME (Caribbean Single Market & Economy)? No wonder West Indies cricket has all this problems,” he quipped.