Jamaica Pegasus will upgrade its club rooms to boost its post-cricket business. - File

Susan Gordon, Business Reporter

The Jamaica Pegasus hotel will this financial year invest close to $60 million in refurbishing and promotions, to boost revenues in a post-cricket market.

The hotel's management is also anticipating increased competition from the planned hotel development for the Spanish Court which is only a stone's throw away in New Kingston and will step up efforts to get its suites in tip top condition as well as overseas and local marketing thrust to retain its market share.

Pegasus will spend $50 million - half of which it is borrowing from the Development Bank of Jamaica — to upgrade the suites on its club floor and will invest a further $8 million to $10 million in marketing.

"These efforts should increase our revenue by about 10 per cent this year," general manager Eldon Bremner commented to the Financial Gleaner.

That 10 per cent would translate to about $74 million, or a $14 million premium on the capital to be invested.

Last year, the hotel earned revenues of $738 million, a 12 per cent increase over its corresponding financial year ending March 2006. The income boost was said to be from new business the hotel secured during the two-month hosting the Cricket World Cup event.

$41.08 million profit

The hotel ended its financial year, which closed March 31, 2007, with profit of $41.08 million.

But the hotels board is not satisfied with the hotel's financial performance.

"Profits are grossly inadequate relative to the returns on equity," said chairman John Issa, speaking Monday at the annual general meeting held at the hotel's New Kingston base.

Issa said there had been a reluctance on the part of the company to take on new debt, saying it's still carrying liabilities of $20 million, down from $38 million.

"We are hoping to have some growth and need to have a more aggressive sales and marketing campaign," the chairman told shareholders.

"Some new competition is coming. Spanish Court is shaping up into a hotel an it is not direct competition, it is bound to have to take some business just as Courtleigh did."

The hotel will be going after group bookings this year to match the type of patronage it got under CWC 2007, and will also target more intensely its traditional customers, including the embassies and consulates who give it the bulk of its business.

Bremner later told the Financial Gleaner that 80 per cent of the hotel's business is from the corporate market. There is to be an upgrade of all four club floors, with others to follow over a two year period.

"We are going to invest in upgrading the corridors which are 1970s corridors and our renovations will hopefully improve our earnings significantly," Issa said.

Currently, the Jamaica Pegasus rooms sell for US$156.30 plus tax inclusive for single occupancy and US$167.55 for double occupancy.

Issa, however, is banking on market willingness to pay more for an improved product.

"We'll be running regular ads with something like our Sunday night barbeque in there. We are going to try and reach the public without throwing away more than the increased profits so we can't put full page adds in the paper," he advised shareholders.

As for the publicity surrounding the Bob Woolmer case - the cricket coach was first suspected to have been murdered in his hotel room - Issa said Pegasus' image has not sufffered. In fact, the international news coverage has given the hotel worldwide exposure he said.

susan.gordon@gleanerjm.com