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Analysis: Ritz Carlton Aruba

Ritz Carlton Aruba
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.

Local discussion

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.

Observations

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.

By Gabriel

Informing travelers about Aruba since 2007, trying to provide value to Aruba travelers.

16 replies on “Analysis: Ritz Carlton Aruba”

Like you, I think this project will be good for Aruba in the long term. When there are more high end projects like this, the government in the future will feel a bigger moral obligation to upgrade the infrastructure. And the citizens of Aruba will benefit from this. I only hope that the other side of the island near San Nicolaas is not forgotten. Since most of the activities will be on the north side of the island.

The proposed site, known as Fisherman’s Huts, is a unique natural site for world class windsurfing. The obstruction of the wind caused by the proposed Ritz will extinguish this natural phenomenon, and the associated segment of Aruba’s tourism industry. Alternative areas are too shallow (reef) or already obstructed by palm trees or other hotels. Pity that internationally known Aruban windsurfing stars cannot get the Huts area labeled a National Heritage site. You should see how windsurfing stars are treated in Europe. Heck, we stage indoor events to attract them.

Good point. As a niche within tourism, such as windsurfing, has a lot of potential, just like a niche such as, say, eco-tourism. We have to be able to offer sub-niches within general tourism that don’t need to be massive again, such as a Ritz Carlton would be. Some say that instead of building a massive new resort, why not suggest to Ritz Carlton developers to acquire an existing resort and transform it into a Ritz Carlton. That sounds like an excellent idea.

Having said that, I haven’t heard much of the development as of late. The financing isn’t anywhere near completed. In fact I’m not so sure they even want to continue with the project, as there doesn’t seem to be any concrete, water-tight, agreement. Plus, the economy doesn’t make sense either. Furthermore, general elections are scheduled for next September (2009) and the a next administration might go a different route on that.

Thank you for your passionate comment.

The Holiday Inn is located in one of the top strips of beach. Has anyone heard of a long term plan for this hotel?

Other than renovating (already completed) the resort I haven’t heard any spectacular plans with the resort for the foreseeable future. This is one of the resorts that’s always on the list of observers that claim it should be bought by other investors and turned into something like a Ritz Carlton for example. The Holiday Inn building is one of the oldest hotel buildings in Aruba.

Your article is disgusting! The current Government was BLACKMAILED to sign the deal. The sleaze bag Bill Marriott threatend to hit the Government with a 200 million lawsuit, THAT's why the Prime Minister signed it. By the way, nobody is against the brand (Ritz Carlton), we just don't want any hotel, condominium or any other construction of accomodations !!! Every low season associates are sent home with 'extra off' which effects their income. Traffic is crazy, pollution a BIG problem. You realy must be out of your mind to back up this contsruction.

I love passionate comments, thank you for reacting to this article. By the way I thought my article was eloquent and well-thought out. But hey, that's me.

You have every right to oppose the Ritz project but I have a different way of looking at it. I think calling Bill Marriott “sleaze bag” is not only ridiculous but also libelous. You should blame the (previous) government, not Marriott.

If Marriott International was planning to file a lawsuit they we're planning on doing so in our court systems using our organic laws, thus they are within their rights. You can find that sleazy but that's your judgement. Our political system is such that when a government changes signature, the rules of the game remain the same until (if) they change the law, which didn't happen.

You seem to think that you can speak for everyone by using words such as “we don't want”. Please don't. You don't speak for everyone. This weekend there was a rally against the construction in Arashi and just a few people attended. Were you there? I was. The protest was weak.

That's right I don't support unlimited construction. In fact I've been pleading for a structured development policy for a long time, which should be governed by the rule of law and not by politicians. To this day politicians still decide.

If you read carefully on this website in the three years of its existence on many occasion I've pleaded for structure and thus I support the territorial zonification last government introduced.

If you've carefully read the article you'll notice that my support for the Ritz project is due to the fact that it's a done deal. There isn't much we could do. So instead of fighting it we should support it, as we have always done with other projects in the past.

By the way this article was published way before the elections last year and a year before the negotiations between this government and Marriott this year. It's easier to speak with the luxury of hindsight.

This response is getting way too long, so in closing I would like to invite you to read more about other topics I've read and you'll notice that I'm very conservative on our beaches and on my ideas where I think we need to go in the future. As Arubiano puro I want a sustainable development throughout the island, away from the hospitality industry. Plus, I tend to stay away from politics, but have a feeling your comment is politically motivated. This is why I've developed this platform, it's a way for me to express my concerns. I would like to invite you to do the same. Thanks for commenting again, I appreciate it.

I have been living and vacationing in Aruba for nearly 23 years. I remember when Marriot Corp. invested in Aruba / Palm Beach by acquiring and building on the ruins of several failed and bankrupt properties in the early 1990’s. Marriot should be applauded for the Aruba investments they have made for all of us.
The Ritz Carlton name, image, and reputation for excellence will help Aruba in many ways. I love the entire Country of Aruba and I especially enjoy my walks along Palm Beach. I pray that the Ritz project will be done as eco-system friendly as possible and that the Government ends the Palm Beach construction at Ritz site…forever. The rest of the coastline / beach should be improved and preserved for it’s natural beauty and availability to surfing and playing. Please remember that all the beaches in Aruba are public; so anyone can enjoy the spectacular white sand and blue warm water.

I have been commming to Aruba for over 15 years and I was shocked that the Ritz would allow such a mess being allowed to go on at the construction site. As I walked the beach today it was almost raining styrofoam in the air and on the beach and in the water. Millions of styrofoam balls everywhere comming from the Ritz-Carlton. I ran over and told the security and they would not allow me to talk to a foreman or anyone in charge. After 4 hours of complaining they sent 4 guys to clean the beach witrh wheelbarrows. As they swept the beach the buried the styrofoam under the sand with holes they dug in the sand. When I complained they threated me and startedto push me around. All these workers were NOT from Aruba but from Santa Damingo, Chile, Columbia, Venezula, Peru, and other foreign countries. I was told the Arubians want $3.00 per hour and everyone else works for $1.25 per hour. Shame on Bill Marriott for allowing his name to be associated with these bad people. Whey does he not pay a good wage or hire locals? I will never stay at his places again and everyone should know.

Hi there Chuck, thank you for commenting. Needless to say that I’m as concerned about this as you are about. Sadly sloppy construction workers in Aruba is hardly new. Workers don’t take into consideration the stiff wind that will blow away construction debries onto the beaches and ultimately into the water. Hiding the styrofoam underneath the sand makes it much worse. The environmental police can’t do much about this as I believe it’s a department of couple of officers only. In terms of pay, Aruba does have a minimum wage law that all companies need to adhire. I believe it’s about just above $925 a month, without overtime.

In terms of the partnership between Marriott International and the construction company, from what I understand, as of today the sole responsabile for the whole development and finincing is a Venezuelan developer. Marriott International will start operating it as Ritz Carlton later this year. Technically they could deny all responsibility and blame the developer.

I must say that I’m extremely proud to have a visitor such as yourself showing so much passion for our island. You truly love island as much as I do and I truly respect that. Thank you Chuck. If you have any pictures taken of this situation I will publish them for sure.

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