The Elbow Beach Hotel has just announced that it will close all but 98 of its 235 rooms, as well as halt all food service, for the foreseeable future. This will result in 160 job losses.
The owners indicate that they will look at redeveloping the property in three to four years (so much for the strategy of allowing them all those rental townhouses to fund overhaul of the hotel property). The three MEF restaurants on the site will continue to operate.
OUCH.
This obviously reveals the true state of Bermuda’s tourism “platinum period”. The critical mass of tourism facilities continues its widening gyre of decline. The Government may spin all it wants, but the facts are dismal. Their self-aggrandizing efforts to “buy headlines” have not supported a viable business.
Shorter term, the consequence of this will have a terrible impact on the economy in terms of unemployment and further reduction of Government’s tax base.
It is clear that the Bermuda Government will soon need to dramatically reduce its budgets. The revenue base has shrunk, and the strategy of relying on debt to fund running costs is not sustainable.
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