Westin Casuarina resort faces financial turmoil

| 03/11/2010

(CNS): According to reports in the US media, Columbia Sussex Corp, which owns the Westin Casuarina Resort & Spa in the Cayman Islands, is facing possible foreclosure on the loan it has against the hotel after demand slumped and the borrower said it can’t cover debt payment shortfalls. The reports are based on information from the credit rating agency Realpoint LLC. The status of the loan on the Cayman hotel "was reported as ‘foreclosure’ for October as compared to current in the prior month," Realpoint said. Columbia Sussex is said to be requesting a loan modification. CNS has contacted the general manager of the hotel and is waiting on a response.

The 343-room Westin Casuarina on Seven Mile Beach is reportedly backing a $137.2 million loan that was transferred to a special servicer in February. The property was built in 1994 and is operated by Starwoods Hotels & Resorts Worldwide. The reports state that a slump in the tourism industry cut demand at the hotel, with revenue per room falling to $184 last year from $258 in 2008 and $293 in 2007.

"The borrower advised that it was no longer possible to cover debt service shortfalls and requested approval to use fund in the curtailment account to cover debt service shortfalls; however, the loan documents will not allow that request," Realpoint said in its report.
Columbia Sussex, which ranked as the largest privately owned business in Greater Cincinnati and Northern Kentucky on the Deloitte Cincinnati USA 100 list, is struggling with $2.4 billion in debt, according to Trepp LLC, a New York seller of commercial mortgage data. The company owns 66 hotels under brands including Marriott, Sheraton and Hilton.

Theodore Mitchel, Columbia Sussex’s CFO, said Tuesday the company had no comment, reports from Cinncinatti revealed.

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  1. Anonymous says:

    2 cents here from a frequent visitor to Cayman

    We visit at least once a year. We have stayed at the marriott, hyat, westin, and condo rentals.

    We like cayman because there is no gambling, and the beaches are magnificent. If we want to gamble we go to Aruba. We find the people on the island to be the nicest, anywhere in the Caribbean. The Westin is the best hotel to stay at on the island. I will say that when we stay in a condo and we try to stay on the beach at Westin we are not treated well at all! Even offering to purchase drinks and food gets you nowhere. The private beach thing should be changed to a more Hawaii type deal.

    We find Cayman to be quite a bargain, especially when we stay in a condo! Our only dislike is really the food. You guys need some good restaurants. Other than theWharf, the Sushi place on 7 mile beach, and Kaibo, the food is pretty awful and expensive. Yet you do have great supermarkets! GO figure!

    The problem with the Westin is most likely management but who knows. Your real problem is the decline in the US economy. Our culture here is changing. It’s all about saving, not spending, and credit cards are history.

    All the best to my Cayman friends both known and soon to be known. We miss you. See you again in March 2011, northside this time.

    All the best

    RECREATOR

     

     

     

  2. MER says:

    Cayman needs an all-inclusive resort, why come here to pay an arm for accomodations, a leg for food, a hip for drinks and a neck for transportation when you can go to Jamaica, Barbados, the Bahamas and pay one flat fee at a gorgeous resort and eat, drink and party all night and day without having to be hit by another bill.

    People go on vacation to get rid of worries and cares, and bills and spending more money is usually that. Make the Westin an all-inclusive resort like Sandals or Beaches, I guarantee rooms will be full all winter season whether by locals or tourists!!!

    Cayman apparently still believes we are the "best Caribbean Destination" newsflash, 1997 past more than 10 years ago and every where else that was fighting to make that list, worked hard to get there and are now there or almost there.

     We haven’t been putting in much effort to improve, modernise and address our products and services in ways that would attract people! How many tourism providers locally use theinternet to see what tourists say about their attractions when they get home? Well time to start doing it, feedback is very important when tailoring your marketing and your business to meet the needs of potential clientele!

    Almost 200 people were out of work when Courtyard Marriot closed its doors, how many more will be out of work if Westin does? How much more smothered will our already limp employment market become? How much more crime will we have to endure? Let’s see…..

  3. Anonymous says:

    Westin has quite average rooms at an exorbitant price.

    The front desk staff are not friendly.

    The beach is fabulous.

     

  4. Anonymous says:

    Many years ago, when the Holiday Inn was in full operation; it was fun to come to GCM.  Today, with the inflated prices of everything, I’m not surprised the large hotels are closing their doors.  To bring back tourism, you have to want tourism.  Cayman doesn’t want the divers any more.  The prices scare the young tourists away and all you have left are the cruise shippers that leave at the end of the day…leaving only their trash to clean up.

  5. Paul Gascoigne says:

     last Satuday the practically empty Marriott was charging $6 for a warm beer in a plastic cup.

    So we had one drink and went to other places where drinks were half the price

  6. michel lemay says:

    Mr. Dart are you interested. I would be willing to train your staffsa 1980’s style.

  7. peter milburn says:

    I am afraid that this is just the start of problems for our hotel,tourism industry.The problem as I see it is the complete refusal of CAL or the powers that run our Govt. to drop their rates during slow times.(August-Dec)and fill those planes with cheap faresUS$200 round trip from US to Cayman INCLUDING TAXES.Its time to think OUTSIDE the box and not continue to follow everyone else in the Caribbean.I have said this so many times that we raise our rates just to take advantage of the "Snowbirds"that come here to enjoy the warmer weather.Why cant we try something else?Its better to have the hotels full of cheaper paying customers than to run them at a loss as so many are doing now.Condos need to get involved as well.The owners all seem to want to make their money back over nite and they all need to take a long hard look at this because it is NOT working with the present prices in place.For crying out loud TRY SOMETHING DIFFERENT!!!The heavy crime rate is also making a serious impact and the country is  still waiting on our Premier to make some sort of statement as to what HE INTENDS to do about it.Stop burying your head in the sand and putting the blame on someone else ie.the Governor who has charge of the police.You are the leader of this country so lets get on and deal with this serious problem.

    Stories running around now about c/ships pulling out of the Caribbean starting next year and moving over to Europe where the pickings are or seem to be better.We need to VASTLY improve our stay over tourism and if it means taking the runway further out into the north sound then it should be done(safely and sensibly) in order to take the long haul jets from overseas.Stay over visitors made Cayman what it is today and until we realise that fact we will never get our economy back to where it was years ago.

    • tourism observations says:

      When one looks at a bigger picture of the changes in the hotel industry in Grand Cayman the past 5 years it reveals a significant problem. Despite having a large number of rooms no longer available at the Hyatt, nor the Courtyard Marriott, a third large flagged hotel is still not able to generate enough cash flow to pay the bills. This should send a red flag up in a few offices around the island.

      Air arrivals have decreased in the same period however not to the same percentage as hotel room inventory by my best estimate. So are a higher percentage of air arrivals staying with family and friends, or are they property owners staying in their own places? They certainly don’t seem to be staying in hotels. I think the days of the vacationer who pays money for their accommodation, airline ticket, car rental, eating 2-3 meals out each day, and purchasing activities each day are dwindling. The consumers spending habits have changed- at least those in our North American market which Cayman relies so heavily on.   Vacationers are value conscious but also sometimes make decisions of travel based on either owning a timeshare to reduce the lodging costs, or rely on frequent flier points so one or more of the party can fly for minimal, or choose destinations where they can stay with family and friends.  

      One of the most challenging tasks in tourism these days is to generate enough demand to fill the large amounts of inventory that sits empty in nearly every Caribbean and North American resort area. If the cruise lines (master marketers they are) can’t fill their ships despite their budget options, then  it is unlikely destinations can either. Until destinations can start creating substantial differences amongst them, and unique selling propositions. 

      On the other hand, some savvy investor will likely pick up these floundering resorts for 30 cents on the dollar and actually be able to run them profitably for a time at least. 

      Interesting times ahead. 

    • Thankful Again says:

      Peter, while things may need to be addressed locally, why does this potential foreclosure have anything to do with the factors you mention and the CI period?  Could it not be bad management on the ground at the hotel – who is indiferent to locals and runs a "sweat shop" machinery at the hotel or even the parent company Sussex making bad business decisions and using the money unwisely?  I think its premature or plain wrong to attribute this, without the facts, to the Cayman market. 

      The caribbean business is down, although some countries (mass tourism), has weathered better.  Corporations in the US (like Sussex) have not been immune to economic fallout that has taken place.  Columbia Sussesx does not just own the Westin Cayman.  It owns many many hotel chains in North America.  Google them.

      Many of the posting below has indicated the prevailing attitude of the staff, which no doubt is a reflecton of management policy, to locals; but, also to residents using their services and being tried indifferently.

      I got to thinking: someone mentioned below about if they closed many caymanians will lose jobs.  I believe there would be some loses but I bet a great many of their staff are our guest workers.  Are they not the ones occupying the Tourism Industry jobs currently? 

    • Anonymous says:

      well said, cal and their inflated prices are killing the cayman tourist industry…..

      • Anonymous says:

        Anonymous 21:51 it is not only CAL that is charging too much. Just about everything in Cayman is overpriced. In the US the Government gets a significant amount of its money from income taxes in Cayman everything is in the product and services. I find in saddening when we have individuals pointing fingers at one company when they work for another company or own another company that is overcharging themselves.

  8. ex-pat Eric says:

    Your purchases of food and drink don’t do much to cover the business’s bottom line! They need guests to fill the rooms so that they can pay all their bills.

    Rather I believe there are too many choices for the small number of stayover tourists that not one "hotel" can fill all its rooms.

  9. Anonymous says:

     If the Westin closes folks you can turn out the lights. There are so few hotel rooms anyway, it will greatly impact the Island economy and many more Caymanians will be out of work.

    • Rabble Rouser says:

      We could turn it into the Premier’s Residence. Being right next to the Governor’s everyone would be able to see who is more important.

      • Anonymous says:

        There have been quite a few comments in different articles about the lack of local music.  When there is local music very few people come out to listen to it. Secondly, I do not feel that local musicians make a big enough effort to do their part to support the venues they play at. How many have facebook, twitter etc to get their fan base out. How often do they learn new songs to keep their music fresh. Just a thought.  

  10. The Raven says:

    This is a perfect opportunity for an investor to pickup a hotel and offer and out of the ordinary Resort that will be put out as a Marketable attraction for the island.

    But only time will tell. Cayman needs a resort with a feel like The Old Holiday Inn. But a design like some of the resorts in Jamaica where there is something to offer and there is emphasis on local music, food, and culture.

     

    Only time will tell……………………. 

    • Anonymous* says:

      But it shouldn’t be an overseas investor because then everone will be against that!

    • Chris Johnson says:

      If the collateral attributed to the mortgage is valued at $137m, then that works out at about $400,000 per room. Presumably Mr Young would value the hotel at a much higher price. Bearing in mind the hotel sits on Crown land I just wonder how any numbers like the above could possibly pan out.

    • Anonymous says:

      I agree.  There was a time divers flocked to GCM and the Holiday Inn.  Not because it was a great hotel…but, it was a fun time.  Cayman needs to get that mentality back…tourists come back because they had fun the first time and tell their friends to visit. 

      Cayman needs to learn hospitality and not try to rip off the tourists.

  11. Anonymous says:

    I can relate to what you are saying 8.38  me and a few friends went to the Grand Cayman Marriott for a few drinks a couple of weeks ago and i have to say that they completely treat locals as if they are not wanted on there propery all i know is  they lost 5 good paying customers thats love to have cocktails.

    • "Local" enjoying best Marriott service says:

      Please don’t judge the Marriott by one service at the bar; we have stayed there a few times ( Cayman Bracers ) and at one time a forced longer stay due to more medical services needed on Grand Cayman; the staff was most attentive, I sent a note afterwards "because" we had excellent service from EVERYBODY there.

      I will always stay at the Marriott because of Top service !!!  "Local" Customer

  12. Anonymous says:

    westin is like cayman all over…….5 star price for 3 star quality…..

  13. anon says:

    I have to agree- last friday night at the Ritz, as locals, a friend and i visited the ourdoor bar for drinks and appetizers. The waiter asked if we were hotel guests, to  which we replied no, but our reception was as warm as can be. just comes down to customer service.

  14. Local says:

    I’m not surprised to hear this news.  Recently a friend and I went to the Westin on a Sunday afternoon to enjoy spa treatments, after which we decided to have a few cocktails on their beach.  As we were not hotel residents we were asked by Westin staff to move from the cabana (there wasn’t another person, let alone a hotel resident, using any of the cabanas).  We found some of the hotel’s plastic loungers and sat down on them but were soon approached by Westin security and asked to move.  We finally managed to persuade the security guard to let us use the loungers to enjoy a few drinks from their bar.  A warm welcome it was not.

    It’s no wonder that the hotel finds itself in financial difficulty when they treat local residents as they do.  Between us we spent $400 in about three hours and were made to feel incredibly unwelcome which is staggeringconsidering their low occupancy rates during the off-season.  I wish the Westin would learn the trick of looking after locals as they are more likely to be return guests.  It can only be put down to unimaginative management.

    • Anonymous says:

      I fully agree. I’ve personally patronised the Westin, Comfort Suites, Marriott (including the Courtyard by way of the Gecko side), Ritz and Grand Caymanian for food, drinks and entertainment at varioustimes and I must say the Westin is by far least friendly to locals and quickest to kick you out/off of the pool, cabana, chair or beach, even if you are paying for their over-priced drinks and food (or having a post-brunch sit to digest) and there isn’t a guest in sight.

      Alcohol has one of the highest mark-ups in the service industry, they should be encouraging locals to come use their facilities if they are paying! I miss the old Holiday Inn 🙁

    • Durrrr says:

      Completely agree!

       

      One other thing to add, is that the Westin refuses to buy locally caught fish. If it’s good enough for the Ritz and probably 90% of the restaurants on the Island, why not them?

    • too says:

      Absolutely true – the Westin is far from friendly with residents (no matter what our creed or colour).  We are not permitted to use the pool, even if we are drinking and eating there, orhave spent a fortune at the spa.  Completely unfriendly. No wonder they are struggling.  You reap what you sow!