A top hotel has announced that it will remain shut until next year because of the Covid-19 crisis and that staff would be made redundant.
Scott Kitson, a co-owner of the Rosedon Hotel, in Pembroke, said hotel staff already laid off would lose their jobs and he said it is hoped the business could reopen next April.
Mr Kitson said: “Requiring our staff to live on unemployment benefits alone, for another four months, would effectively force many into poverty and this is a reality that is absolutely heartbreaking, as we consider all team members to be part of our extended family.”
Mr Kitson added: “While we could seek to delay this announcement and associated redundancy payments in the interest of deferring the financial consequences to the company, we recognise that our employees are struggling to make ends meet and that all of our employees will benefit from receiving payments now. Coming to terms with the realities of this decision has been devastating, but in the face of this and many other uncertainties, we remain resolute in our commitment to our employees and to the long-term recovery of Bermuda’s tourism industry.”
Mr Kitson declined to say how many people would lose their jobs. But he added: “We are working hard to find alternative employment opportunities for those staff who are facing redundancy.”
Glenn Jones, the interim chief executive of the Bermuda Tourism Authority, said the news was “deeply upsetting”.
Mr Jones said: “Restricted airlift capacity is a chief concern of all our hospitality businesses, especially hotels.
“Like us, they’re monitoring sentiment to determine whether consumers are ready to travel again and meet the rigorous public-health protocols needed to keep Bermuda’s community safe.
He added: “Even in a best-case scenario, occupancy rates will rise slowly, and, as expected with all parts of our recovery, this will be a gradual process and some hotels may delay reopening.”
Stephen Todd, the CEO of the Bermuda Hotel Association, said he was disappointed, if not surprised, by the announcement.
He added: “We never like to see a longstanding property have to make a decision of this magnitude, but I can clearly understand the reasons.”
He said that the BHA was concerned that other hotels might be forced to do the same.
Mr Todd added: “So much is going to be based on the occupancy levels and bookings, especially now that we are looking at the shoulder months of the year.
“This year is going to be that much more challenging for us because we haven’t even started a high season.”
Zane DeSilva, the Minister of Tourism and Transport, said the announcement highlighted the industry’s problems. He added: “The hotel’s statement details the stark choice thrust on us by this pandemic: putting our people back to work with mitigated risk, versus further suffering if the economy is kept closed.”
Mr DeSilva said the Government had decided to reopen the island to visitors to support the industry and its workers, with strict precautions to prevent the spread of Covid-19.
He added: “Ultimately, the Government’s goal is to strike the right balance with an economic environment that keeps public health paramount — while ensuring, to the best of our ability, that residents’ lives and livelihoods are simultaneously protected.”
Mr Kitson said the hotel closed on March 18 and had run up almost $500,000 in losses since.
He said: “The statistics and projections most recently announced with regard to limited airlift to Bermuda, and the associated reduction in tourists visiting our island for the next nine months, paints an incredibly bleak picture for all Bermudian hospitality businesses.
“Hotel operations typically run at a loss for the first few months of the year, but are able to recoup most, if not all, of that loss through the high season between May and October.
“Regrettably, with best-case projections by the BTA reflecting occupancy at less than 50 per cent for the island through early 2021, we are forced to face the reality that returning to operations for the remainder of 2020 is not feasible.”
Mr Kitson said if the hotel reopened before there was enough demand, the losses would worsen and could force the company into bankruptcy.
He added: “While we have been busy trying to make sense of these business realities, we have also grown increasingly aware of the impact that protracted layoffs have had on all of our staff. The Bermuda Government reacted swiftly with regard to providing unemployment benefits — however, the reality is that living on $500 a week in one of the world’s most expensive places is not sustainable.
“We also accept that the recent announcement of forced redundancies being delayed until the end of October, was made in an effort to help businesses avoid bankruptcy and forced closure, but we believe that this has unintentionally transferred a significant portion of the financial burden for ongoing hotel closure directly onto those who continue to be laid off.”
Mr Kitson said the hotel was “committed to retrain and re-employ” staff in the hotel’s Huckleberry restaurant, which will remain open.
But he added: “The reality is that Huckleberry restaurant continues to struggle to become a break-even operation and consequently, only provides opportunity to the extent that we can generate revenue. When we reopen hotel operations in 2021, we hope to be able to re-hire our former staff, but in the interim we are compelled to accept that they need our support now rather than later.”
The historic property on Pitts Bay Road was originally the home of EJ Thompson when it was completed in 1906 — and named after his son, Robert Rosedon Thompson.
It was purchased by Commander Geoffrey Kitson and his wife, Elizabeth, in 1952 and turned into a small hotel.
The hotel was named The America’s Best Classic Elegance Hotel at the Boutique Hotel Awards in 2018 and in 2015 it become the first on the Island to win a special green award from global travel site TripAdvisor.
The hotel was awarded Relais & Châteaux membership last year, and became part of an exclusive group of resorts and restaurants around the world.