Ritz prices out local captain

| 18/11/2010

(CNS): A local captain is speaking out about what he considers unfair treatment by Grand Cayman’s leading resort. Although Captain Dexter Ebanks, one of the most popular local operators, has been working with the Ritz–Carlton Grand Cayman since it opened, taking guests on excursions to Stingray City and other snorkelling adventures, he says he is now being priced out by the hotel. Ebanks told CNS that the Ritz has asked him and other tour operators to increase insurance liability to as much as $25 million. At such a high level with no guarantee of business Ebanks said he can no longer work with the hotel. Meanwhile, the Ritz told CNS that the request for increased cover reflects its experience in the Caribbean.

Explaining that he had already met one request by the Ritz to increase his liability cover for tours through his company Fantasea Tours, Ebanks said that this time he could not meet the unrealistic demands. “About two years ago, I previously complied with the Ritz Carlton request by increasing my liability insurance from $1million to $2 million as a requirement to carry on doing business with the hotel,” Ebanks told CNS. “In July I received their new request for more liability insurance.”

This time the Ritz said it was looking for as much as $25 million in cover if the tour operator was carrying 12 or more passengers and asked for a certificate of insurance, in 15 days, evidencing the new rates. It asked for $1 million in general liability coverage for each occurrence and for protection and indemnity for 5 or less passengers of $5 million, 6-12 passengers $10 million, over 12 passengers $25 million and liquor liability insurance $1 million. It also asked that if the operators offer transportation the auto liability requirement for 5 or less passengers was $3 million, 6-12 passengers $5 million and 13-25 passengers $10 million.

Even if he had gone ahead with a policy, providing he could find a willing insurer, Ebanks said the hotel was not prepared to give him any assurance about the level of business it was prepared to do with him to justify his investment. The captain pointed out that by pricing local operators out of business with such over inflated rates it would create resentment. He also questioned why the Ritz seemed to be pushing him out when he had offered top class service to the hotel for so long.

“The Cayman Island government has given away millions of dollars in concession to these companies to encourage development so that Caymanians can get work,” the captain said. “I know there has been many a disappointment with some Caymanians’ performance and attitude, but I challenge any of them to question mine. All anyone has to do is to go on Trip Adviser and see for themselves what Fantasea Tours is all about.”

While Ebanks said it certainly affected him directly, he felt it was a slap in the face of all Caymanians and he is not alone. Although, they have asked not to be named, there are other operators who say they too are facing the same request for high insurance coverage that they simply cannot justify purchasing, especially when the hotel gives no guarantees of business.

A number of operators have said, however, that they believe the real reason for the unrealistic liability cover demand is so the hotel can justify creating its own water sports tour operator, completely cutting out opportunities for local businesses.

When CNS contacted the hotel regarding the increase and the operators’ concerns, the vice president and general manager, Franz Ferschke, issued a statement in response: “The safety and security of our hotel guests is one of our highest priorities. We therefore require insurance coverage from vendors. The coverage required reflects our experience in the Caribbean and worldwide. In our experience, guest safety is a critical component of a successful program of tourism,” he said via email.

CNS asked about the issue of pricing all the local operators out of the market and what that would do to the relationship between them and the hotel. We also asked if speculation that the hotel was going toestablish its own water sports operator was true but the manager did not respond to either of those issues.

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Comments (53)

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  1. Anonymous says:

    Let us all boycott the Ritz locally should they start their own dive operation.

    They promised us all to be given opportunities when Mr Ryan came initially and proposed theproject

  2. Anonymous says:

    We are a Caymanian-owned company and the Ritz is one of our business partners.  There are many local business partners that have contracts and work with the Ritz.  This seems to be an isolated incident, and shouldn’t be used to brand them as not supporting local businesses or workers, it is just not true.

  3. Water Sports Operator says:

    The Ritz is owned by the Marriott and they tried this same thing a couple of moths ago at Frenchman’s Reef Marriott Beach Resort in St. Thomas and asked the water sports vendor they were dealing with to obtain $25M in liability which he went ahead and obtained a quote on this liability and after receiving the amount he would have to pay for liability went back to the resort to advise  them that what the new cost per person four the tour would now cost and decided to revert back to the regular $2Mliability requirement.  The Ritz would be well versed to learn from this experience.  Ryan already has a water sports company and it is clear as day that he is looking to expand this and push out the Caymanian water sports operators.  XXXX  Does his water sports company have $25M in liability? XXX The cost of this amount of liability just does not make sense in what you would have to charge for paying passengers to stay in business no matter who you are.  This is very embarrassing for the ritz.

  4. Say it Aint So! says:

    $25mil???? Are you serious!!!! what happened to the standard $1 – 5mil commonly asked for by cruise lines, hoteliers, transport companies, etc. Lets see how the gov is going to handel the Ritz starting their own water sports company, both UDP and PPM. What happen to the moritourium on water sport operators. Leave this industry to our Caymanian ambassadors.

  5. Anonymous says:

    Here we seemingly have yet another example of the big fish, attempting to eat the little fish. In the US, large producers of farmed goods also use similar practices to try and stomp out the small, often times, family run businesses. These farmers are forced to pay fees and other costs to production giants, which are raised so high, that it effectively forces them to shut down. Ethics is lacking in the world today.

  6. Anonymous says:

    This is an outright plot to start a tour operation run by Ritz. There is a need for a fair trade commission in Cayman…So when is Ritz going to start paying all the money they owe for import duties over $6 million.

    • Afraid to Strap on a Pair Also says:

      You big silly!  As soon as they create their new water sports company.  This sort of BS is the single pillar of the Cayman economy.  That’s why I love this island so much.

  7. Anonymous says:

    Mr Dexter, you have my sympathy. There is only so much any mall busness can absorb.

    The same is happeningwith Government regulators. Soon many small businesses will think along your lines.

    Letme refer to a bit of history– many Branded Pharmacuetical companies tried to kill the small generic drug manufacturers so that they could make more money. How shortsigted– people all overthe world have seen through this and started shopping generics.

    You keep up the good service and word wll get around to many of the Ritz guests to go outside to you for a beter exoerience and service

  8. whodatis says:

    So – is this the ultimate plan of our "foreign investment / investors" that we constantly hear (via currently elected leaders and MLA’s) will be the saviours of our country?

    If so, it looks like Caymanians would be far better off without much of it.

    (Yes, I am aware that certain individuals are NOW actual "Caymanians" … the operative term here is "ultimate plan".)

  9. anonymous says:

    Dexter my native son, please wake up!!  Your situation is a classic case of Caymanian "suppression".  Its happening all over the Island and ONLY to the Caymanians.  Welcome to mordern day apartaid!!  You should check out some of the workplaces and see what the working classed Caymanians are going through.  pure suppression!  If you open your mouth, you are put in a class called "disgruntle employee".  If you be pro active you are a "troublemaker". The Companies are all pretty and rosey on the outside, but check out whats going on inside. Like cancer in the bowels.  We the Caymanian people need Unity and we need to fight for one another.  We do not need to follow this leader we have today, he is very divisive and he like to tear people apart if they ask questions.  He is ONLY for the rich. We the people of these Islands need to turn to God and Pray for a Divine intervention. HE is oue voice of reasoning.

  10. peter milburn says:

    Having been involved in the diving business probably longer than anyone else(thats still active)I would like to put in a few words re this insurance.I totally agree that there seems to be a contradiction in what is being said by the Ritz.We have some of the finest,safest and most friendly people running our north sound trips and this in my opinion should be one of the  more important aspects that they should be looking at as well as the boat safety equipment etc.Basic insurance usually runs around 1-5 million US$ depending on numbers of boats and numbers of guests on board Is this a ploy to take these people out of the equation and allow for an "in house"operator at the Ritz ??You be the judge as it certainly seems that way and its happening more and more..If one could do a poll at the Ritz right now with divers that have gone out with some of the smaller operations one would find that the major portion of them have had a great experience with the said little guys as they have smaller groups that make for a much better setting for fun and safe diving.Please dont get me wrong the bigger operators run safe,and satisfying trips as well but smaller is bette with most of the diving clients that stay at the Ritz.They love to charter a small boat for private diving and that goes a long way in making sure they enjoy their stay and will return to dive again with that same operation.Is the management going to say that they MUST dive with the hotel??That should be an interesting situation to say the least.My personal feeling is the Ritz is making a big mistake and they maybe need to learn to work more with the local more experienced boating folks who can certainly make their stay there much more enjoyable.As with everything else time will tell.

  11. Dr Love says:

    And this is a surprise to anyone?  That’s how big businesses work.  They hire you or enlist your services but when those get too costly, or somebody in the office figures out they can do it cheaper on their own, they go for it.

    Bottom line is always the bottom line.  What’s even better is, you don’t tell the service provider right away that you’re going to drop them or push them out.  You let them keep operating and you cozy up to them even more and you put some of your workers on their boat and check out how they operate. 

    You put together their time spent on the boats or observing how the operator does business – research (it’s called feasibility analysis) – then take his model and make it your own, cheaper, and cut him out.  Ritz isn’t in the business of boat tour operation.  Probably don’t know the first thing about it.  But Dexter does.  So keep him around for a while, take notes, then copy his value chain into your own and say "merry christmas, don’t come back".  Yet everybody is shocked when Ritz opens up the Ritz Boat Tour department on Boxing Day lol.

    Come on people, wise up!  If you don’t protect your business model, it can be assimilate, copied or innovated and then you’ll be left out in the cold.

    That’s Business 101 folks.  Ritz isobviously good at it.

    If you want to play with the big dogs, beef up. 

  12. Anonymous says:

    Liability Insurance was capped at $2.5mln per claim in Bahamas for operators off of Paradise Island, and that was after the tragic death of an English boy.  If we’re comparing apples to apples, $2.5mln would seem to be more in line with the region than the Ritz’s current expectations of $25mln.    

    http://www.bahamasb2b.com/news/wmview.php?ArtID=7721

     

  13. Junkyard Dog says:

    Clearly a tactic to push out the operator and establish their own company. This has always been the mandate of the Ritz since its inception. Understandably they have many mouths to feed but so do the operators in the marketplace. The watersport association should step in and self insure the industry and charge premiums accordingly to operation size and scope. This is one way to make premiums affordable and provided coverage to the customer.

  14. Anonymous says:

    Am I missing something? How is liability insurance coverage going to ensure the safety of the guests at the Ritz as the president and general manager, Franz Ferschke claims is one of their highest priorities? I would have thought that the experience of the tour operator and their safety measures, along with the soundness of their boats, equipment, etc. would be the real factor with respect to guest safety. Liability insurance coverage would seem to me to be an issue AFTER an incident involving guest safety has occurred. As Mr. Ebanks already suspects, I would agree that this is probably a move to make the cost of doing business with them so high that it becomes impossible for him to continue, opening the path for them to set up their own tour company.

    • Anonymous says:

      I agree with you totally!

       

      This seems like another "blessing" from big mac and fries to his WB constituents.

       

      I’m sure they’ll go to Ryan and argue for their WB tour operators… NOT!! 

  15. John Evans says:

    I don’t quite see Ritz-Carlton’s linkage between customer safety and high levels of insurance cover, it’s a contradiction in terms.

    As a PADI instructor my mandatory US/Caribbean cover (currently $588 a year) has a $1million single claim limit and $2million aggregate cover -with that I can conduct guided dives taking as many people as I feel comfortable with.

    So why do Ritz-Carlton want $25million cover?

    The other odd aspect of this is that the insurance limits seem to be far higher than those demanded by the cruise lines. As many of their trips are booked in house on the cruise ships you would have expected, if this increase is justified, a similar demand. Or is it that the cruise lines share the insurance liability load while Ritz-Carlton (currently offering rooms at about $350 a night on hotels.com with a ‘buy 10 get 1 free’ offer) want the watersports operators to shoulder all the financial burden?

    Wouldn’t it be interesting to find out what level of liability insurance Ritz-Carlton currently has and what it covers or doesn’t cover?

     

    • Anonymous says:

      insurance cost is directly related to safety because high cost forces operators to plan, train and manage for safety. 25 mil seems nuts however. even in the lawsuit crazy us no one carries that much for this kind of operation.

  16. Anonymous says:

    When are Caymanians going to wake up and accept that our dictator wants Caymanians to become extinct and be replaced with millionaires from anywhere that he can control and manipulate XXXX.  If you’re not alseep then open your eyes and lets get out from under the bush and take this country back.  You too West Bayers…you’re the ones that have us in this mess.

    • The Crown says:

      For real.. The pattern & history of concessions as we see this issue again,isn’t at all surprising to most Caymanians. In fact it’s not that long ago that these same encouraged builders among us chased & harrassed Caymanian’s for being on “their” beach. The government then as it is now turned a blind ignorant eye to these issues. This issue is why Caymanian’s need to own all the hotels & isa enduring, manifested,testament as to why our tourism establishment has shrunk to record lows.It is obvious,goverments & the like will go to great length’s to avoid this reality.

    • Anonymous says:

      What an ignorant comment. The Ritz has the right to do whatever they would like with their guest., and require what they want from their vendors. Yes it may be troublesome for the small vendors but thats the breaks. And YES I am Caymanian and a business owner.

  17. Anonymous says:

    Maybe when Big Mac brings the Bill to limit malpractice payouts for Shetty he can also set a cap of $50k for loss of life in watersports accidents.

  18. ProudToBeCaymanian says:

    Concession of $20million vs jobs for Caymanians…………..did the UDP govt that gave the concession to Ritz Carlton deal for its Cayman people???

    What was written in that contract for the Caymanians???

    Isn’t this the same now with the Dr. Shetty hospital???

    Caymanians, when are we going to demand the BEST from our Country by ensuring that our Govt acts in our BEST interest?????

    You’re breaking my heart!!!

    J’mi-can-me cry!!!!!!

    Seriously Sad…………..

     

    • Anonymous says:

      I’d like to know about the concessions made to the Ritz from CUC.

       

  19. ExBlueGirl says:

    It may be a surprise to many readers that the government does not regulate the watersports industry and that many operators carry on business with inadequate or no insurance and minimal safety standards.

    For many years the watersports groups have self regulated, and the businesses involved in diving had to have mandatory equipment and insurance if they wished to be affiliated with the international diving agencies. Not only did the businesses have to be insured, but the individual scuba instructors had to be self insured. 

    Along with the insurance these individuals are trained in First Aid and CPR with the requisite equipment aboard the boat.

    Other watersports operators needed a boat and the clientle.  As long as the boat floated, that was the only requisite needed.

    It was quite disconcerting to observe some of these ‘boat captains’ (which is a loose term) sending snorklers out while dressed in blue jean pants and a t-shirt.  Try swimming in wet jean pants, much less try to help someone in difficulty.

    Back in the day, people who engaged in watersports activities were a little more physically fit.  This has changed dramatically and have observed the change in clientle about 10-15 years ago.  Obese people, older people, people with medical conditions (undeclared) are participating in these activities not realizing the physical ability needed. 

    Unfortunately this results in accidents and deaths.

    Here is a brief list of what should be required in order to operate out on the water:

    Boat needs to be licensed and inspected  and have safety equipment and seaworthiness certificate

    Pilots need some sort of certification in boat handling, rules of the road and safety at sea.  Including the deckhands.

    Rules which dictate how many passengers and crew per vessel.

    These are just a few stipulations. And knowing that some people may disagree, remember, these are businesses taking people out for hire or reward and have a civic responsibility to their passengers and as ambassadors of the Cayman Islands.

    These passengers assume these stipulations are in place as it is in their own countries.  they would be in for a big surprise.

    Here is another revenue for Government.  Don’t know why they don’t  do what is right for the people.  

    Start with watercraft registration and licensing.  

     

    • John Evans says:

      Dexter has always been one of the strongest and most vocal advocates of watersports safety.

      Please don’t use this story to make unwarranted criticism of one the best and most conscientious boat skippers on the island just because you have had a problem at some point in the past.

      • ExBlueGirl says:

        Mr. Evans, I have known Mr. Dexter for many, many years and have nothing but respect for him. 

        My post is not in criticism of him, so don’t make any assumptions on a perceived ‘problem in the past’.  Not appreciated.

         

         

      • Anonymous says:

        Another profession they are trying to push caymanians out of-it is one thing then the next.  For God sakes leave do not take this bread out of our mouth TOO.

      • agree to disagree? says:

         I respectfully disagree. XXX

        I agree with exblue- the lack of watersports minimum safety and training requirements would surprise guests to the island to the point that I am guessing a fair number would make different choices about who they took tours with. 

        I don’t agree with the Ritz demanding a $25 million policy but do agree that Cayman needs to raise it standard of qualification for watersports operators. The term boat captain is very loosely used- just one example. 

         

      • flipper says:

        Woah, XXXX – take it easy there.  The lady said nothing of the kind.  Talk about jumping to conclusions… 

  20. Libertarian says:

    We are asking or petitioning the government to legislate stronger laws and policies, protecting Caymanians and their environment, and all we are getting from Shetty, Joe, and Dart… multiple slaps in the face!

    Sorry Cayman, but your government fails to represent you again and again and again and again…!

    Shame… That it is an Independant MLA from North Side, Mr. Ezzard Miller who has been the only one thus far addressing such issues… I am sorry, I am not too much fond of the PPM side either!  I’ve only heard Alden touch recently on Work Permit’ hikes… and that’s it! 

    THERE IS REALLY NO OPPOSITION FOR CAYMANIANS!

    AND THAT IS VERY SAD!  WHEN THE WHOLE COUNTRY IS SOLD OUT FOR CHEAPNESS – WHOSE FAULT WILL IT BE?

    • Joe Mamas says:

      Think you got it bad?  Try being an expat!  They pay more for absolutly NO representation at all. So don’t feel so bad. Your Government, (elected by you only) is only interested in feeding itself and is takeing from everybody but itself.  And yes, even Shetty, Joe, and Dart have to pay and pay and pay.

       Bye the way, Its YOUR fault.

    • Not Cryin' says:

      Too late to whine now. The pitfalls of the party system were all too obvious, but they were ignored. Caymanians should have thought about the problems with the party system before theyacted stupidly and enshrined it in the constitution.

      • Anonymous says:

         

        So that mean as human, we are not allowed to make a mistake? So because we made a mistake , we should shut up and suffer. Or  can we say we made a mistake and work to move forward and correct it

        which of us humans are error -less?

         

    • Anonymous says:

      How soon you forget the backlask to Mr. Solomon trying to designate jobs for Caymanians only. Seems Mr. Ezzard said he would vote against it and then left so he didn’t have to vote at all. Amazing you say Ezzard is for the people when he runs and hides when his ideas are proven unhelpful to the Caymanian people.

      I have seen Mr. Solomon do more to help the people of the Cayman Islands in the last year than any member of the active voted government.

      Pension Withdrawal for a home

      Jobs for Caymanians

      I am anxious to see if there is more to come.

      Open your eyes Cayman and see who is really trying to help us. Mr. Miller sure isn’t. He just talks about it.

  21. They did the same thing before says:

    They did the same thing with one local limo operator. The poor fellow invested heavily bringing in vehicles to transport their guests. The Ryan went and buy his own fleet of vehicles that he owns personally that he then rents directly to the RITZ. Cut the local man out and leave him there without business. These are crude business tactics. And with Mac backing him and by his side it will continue to happen. The rich get richer and the Caymanian’s poorer. 

    • They do the same all over. says:

      Sounds more like the smart business man gets richer and the not so smart get louder.

      But if you really want your leadership to hear you………well I can’t think of a way.  Can you?

    • Mark How says:

      Not crude business tactics, smart business tactics, his business plan was heavily floored, he should never have brought limo’s onto the island if he only had one customer and no long term contact with said customer in place. The Ritz did what anyone would have done, cut out the middle man. It’s called competition, don’t complain when you open a store and have someone else do the same thing a week later..

  22. Loopy Lou says:

    Now I know he only has that little insurance, I will make sure none of my friends or family go near his business when they visit.

  23. Anonymous says:

    I hope that’s not him holding a stingray??

    • Anonymous says:

      He is not lifting it out of the water.

      I have seen him being quite gentle with them. He has been an advocate about not lifting them out of the water.

       

       

  24. Bobby Anonymous says:

    For many. many years the water sports operators have been on a gravy train making a fortune , many of them running vessels in a poor state and often overcrouded.

    Insurance is critical in todays market. Who is going to pay when a boat sinks and lives are lost?

    The policy should be held by the watersports association and subsidised by the government.

    The tour operators would be charged an agreeabe fee depending on the size of the vessel and it’s passenger rating.

    The vessels would need to meet certain requirements for condition etc and have a qualified operator.

    A skiff and a gallon of gas don’t make you a "Captain."

  25. evan says:

    The customers must be so rich that to break a nail it would mean a lawsuit!

    This is rediculous!

  26. 2 Wrist says:

    $2m coverage is pitiful and inadequate.  The protections for tourists coming to Cayman is awful – between exclusion clauses and inadequate insurance tourists are risking their entire futures by going on certain trips here.

    • Anonymous says:

      Quite, but when you bear in mind that the minimum statutory level of third party liability cover for drivers is only $1million, and that there is only one company on the island that offers more than the million, $2million begins to look better.    All the limits are woeful and can leave innocent victims severely undercompensated.

      Plus, passengers in hire cars are not required to be covered, and, so far as I know, no hire car operator has cover which covers passengers against the negligence of the driver

      I could go on, but it’s too depressing.

       

  27. Anonymous says:

    The insurance liability for Mr Ryan and the Ritz Carlton should be of 250 million. The Cayman Islands has to ensure the safety for its future generation!

    • anonymous says:

      Double AMEN!!!

      • Anonymous says:

        I am not understanding the problem.  Ryan is Caymanian.

        • Anonymous says:

          Nationality does not replace respect. Sorry

        • Anonymous says:

            Yes is that NOT sad/?/

          That Ryan now  is caymanian and is NOW Compettiting against the local Guys.

           How sad after they have built this watersports  industry  he is now  making it difficult for them to  operate.

          Why was he giving Status in the first placce?

          Because he built a Hoet like the Ritz in Cayman .

          But now he is wanting to take the business that bleeds from the Ritz under his umbrella?

          Well they are intelligent Islanders in other Carribbean Islands that know 

          what to do with UNFAIR COMpetitiion from people like Ryan . Have  he status or not