Layoffs loom - Hoteliers seek bail-out to cushion effects of US attacks

By Garwin Davis, Staff Reporter

JOB CUTS have already started in the hotel sector and some operators are appealing to the government for a bailout to cushion the economic fall out from last week's terrorist attacks on the United States.

Several of the island's major hotels including Couples, Sandals, SuperClubs, Jamaica Grande and the Ritz Carlton are either rotating or cutting staff because of extremely low occupancy levels, sources tell The Gleaner.

This trend is expected to continue, industry sources say, in light of the air travel situation in the United States where the airline industry is reporting losses of US$300 million per day since last Tuesday's attack.

Representatives of the hotels, when contacted by The Gleaner, while reluctant to confirm whether they were in fact cutting staff, stressed that the immediate future for the industry appeared grim. Others, however, had no problem talking about the situation.

"Prior to the tragedy in the United States we had already sent home much of our staff because of refurbishing plans," explained Peter Hall, general manager of Jamaica Inn hotel in Ocho Rios. "Now, with this current situation, as much as we would rather not, we may have no choice but to continue with the exercise. It is very difficult for a property to maintain a work force without guests coming in. This will not just be a Jamaica problem but something, which is global. We already see Continental airline cutting 1,200 workers," he said.

At the Holiday Inn resort in Montego Bay, there was the same level of uncertainty. According to the property's general manager, Albert Abreu, the next few days will be critical as the hotel struggles to cope with the cancellations it has been receiving. "We have some critical decisions to make as we have to look at ways to control expenses," he said.

Godfrey Dyer, owner of the Wexford Court hotel in Montego Bay, believes hoteliers will have no choice but to reduce their workforce. "I can see layoffs coming," he said.

The situation is the same at the Golden Seas resort in Oracabessa. "We are already rotating staff," explained Ann-Marie Nicely, duty manager.

Other hoteliers believe the current situation is so grim that a government bailout is the only thing that will now suffice. "I am just coming from a meeting with a few top players in the sector and it is felt that nothing less than US$1 billion will do," noted one prominent hotelier, who requested anonymity. "The sector is hard hit and it will take many years to recover. I am not sure if people are yet fully aware of the situation. The government will have to issue loan guarantees to assist the sector to get out of this mess."

Executive vice-president of SuperClubs, Joe Issa, though not specifying a figure, also believes the situation may warrant the government's intervention.

"We see where the United States government has rushed to the aid of all its important sectors following last week's tragedy," he said. "This is a similar situation we are facing here."

Mr. Issa was not willing to say if SuperClubs would be laying off workers, but noted that it was something the entire sector had to be contemplating. "We have heard the Jamaica Hotel and Tourist Association (JHTA) talk about the grimness of the situation," Mr. Issa said. "Cutting staff is not something any organisation would want to do, but sometimes the reality of the situation takes precedence over one's own emotions."

Last week, vice-president of the JHTA, Horace Peterkin, predicted that the next couple of months will be so bad for the sector that he not only expected widespread layoffs but believed some properties would be forced to close their doors. He did not rule out his property, Sandals Montego Bay, reducing its labour force to offset the anticipated problems.

President of the St. Ann Chamber of Commerce, Andrew Grant, said he was fearful there would be a lot of people forced out of jobs through no fault of their own.

"The hotels will have no choice but to cut," he said.

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