Ritz Carlton internet presentation
Last week the president of Marriott Corporation was in town for talks with island officials. At Marriott Aruba Resort, Mr. Bill Marriott sat down with Aruba’s Prime Minister for talks, most prominently about the long proposed construction of Ritz Carlton Aruba.
Ritz Carlton is the hi-end, exclusive resort chain of Marriott Corporation. It has currently only five locations throughout the Caribbean, with new locations scheduled to open in the near future. Reportedly Aruba has been seeking a hi-end resort chain for fifteen years now.
The proposed Ritz Carlton Aruba-project is supposed to be a 320 suites resort and carries a price-tag of over $200 million. The resort’s expected to rise just north of Marriott Aruba at the end of Palm Beach. Several water sport activity vendors and users will have to relocate from that beach.
After holding an open bidding process Venezuelan hotel developer Desarrollos Hotelco S.A. won the bid for the construction. Despite having signed an agreement over the proposed construction, the financing for the project isn’t complete.
Ritz Carlton Aruba have kept emotions pretty busy throughout the last four years. Aruba’s Prime Minister has been talking about it for that long as well. It even became a campaign theme in 2005, but obviously it never happened. Until now that is. Just in time for this years elections.
Naturally not everyone agrees with the project. Some civic groups criticize the over-building of Palm Beach, while environmental groups denounce the construction as being bad for turtles and certain species of birds. The opposition voiced the same criticism as certain social partners. They argue that Aruba shouldn’t become a destination of mass tourism and the jobs being created aren’t high quality as the proposal suggests.
The ruling party, obviously, is ecstatic. They claim that the island is in dire need of construction projects – referring to slowing construction in Aruba currently – and a financial boost into the local economy. The Prime Minister is proud to be able to announce such a significant investment during “times of crises” as he put it. He should be proud indeed. Aruba’s economy is only $2.2 billion, adding an investment of $200 is significant. He went on saying that Ritz Carlton guests are different from current guests traveling to Aruba, therefore a good diversification to the current flow of visitors.
Even though Aruba is known for its cordiality, friendliness and pacifism, locals can get pretty worked up on issues, especially on political issues. The imminent construction of Ritz Carlton won’t bring a lot of emotions with locals if there weren’t a political shadow cast on the whole thing.
Why political? It’s election year. In September people will elect a new chamber of representatives. The ruling party has been in power for eight years and will try to remain in power for four more years. The timing of the Ritz Carlton announcement is too perfect, according to the opposition.
Good timing indeed. I can’t help but think how many concessions the island needed to make in order to secure a commitment from Marriott Corporation to start building, just a few months before general elections. That’s how things work in the world I guess.
A question I often ask when a major construction starts: how much is this island – which doesn’t produce much – going to gain exactly from the construction efforts? Apart from concrete – which is pretty cheap locally – how much materials are going to be bought locally? Are they going to pay import taxes on imported materials, just like everyone else? How about the construction workers? The last major project to conclude was in 2007 when Riu Palace Aruba opened. They had to bring hundreds of Dominicans and Mexicans to work construction because the local market couldn’t handle a project of such magnitude.
Analyzing the construction phase is short term thinking and actually not all that interesting. The long term implications are far more interesting. There is where I can stand behind this project. As a matter of fact I support this project due to its long term implications for the people. It’s going to generate millions of dollars in tax-revenue and offer higher quality of work for young locals, especially for Aruba’s increasingly growing population of young professionals.
Caribbean islands rely mostly on tourism, but each has a different fundamental economic structure, therefore difficult to compare with Aruba. Nevertheless, a quick comparison.
Small islands already hosting a Ritz Carlton are Grand Cayman – which relies heavily on financial off-shore business – and St. Thomas, US Virgin Islands – which is as tourism oriented as Aruba. All three islands are host to many hotels and resorts. I’m sure they face similar challenges such as Aruba. All three have above average income per capita and all have vulnerable economies.
Larger islands are also host to Ritz Carlton such as The Bahamas, Dominican Republic and Puerto Rico. These islands have a better diversification of their economies, although relying on tourism nonetheless. In this context I think it is possible for Aruba to be host of a luxury resort, despite the fact that this island still lacks an A1 quality environment, like some critics claim.
In the past I have suggested the creation of a structured master plan for Palm Beach and allow the rest of the area to be fully developed – Palm Beach’s going into that direction anyhow – and limit development at Eagle Beach allowing it to remain small, open and accessible. Ritz Carlton fits perfectly in the Palm Beach development as the top resort.
Concluding, I would like to say welcome to Ritz Carlton as Aruba’s newest member of Palm Beach – if financing succeeds. I truly think the timing of the announcement is perfect. Not due to political reasons, more due to the fact that the island is creating a project in the metaphorically rainy period – recession in the US – and will be open for business for when the sun shines again around 2011 [my projection]. Economies are cyclical and when it starts to grow again, Aruba has a brand new product to offer.