(JAMAICA OBSERVER) – Sandals Resorts International (SRI) CEO Adam Stewart has rubbished claims by Antiguan Prime Minister Gaston Browne, who has continued his attacks on the resort and its principal, Gordon ‘Butch’ Stewart.
Stewart made a passionate defence of SRI and its chairman, his father who is also chairman of the Jamaica Observer, in an interview with Nationwide Radio last Thursday, responding to one by Browne.
Following is a lightly edited version of the interview:
Cliff Hughes: We are trying to recover from the salvos unleashed on us by Prime Minister Gaston Browne of Antigua and Barbuda. First of all, did you hear the assertions that, essentially, Sandals has been userers, abusing, manipulating Antigua’s tax system for the company’s benefit?
Adam Stewart: Mr Browne has been like a broken recording on something baseless which he has said repeatedly, with no legal premise. Sandals Antigua opened in 1991. For 25 years we have been the only hotel in Antigua which operates 365 days a year and became the largest employer. The PM can actually try to pretend to talk to Sandals Resorts about linkages; the consumption of local products; the training and development of human capital. There is no company in hospitality that has done more in development of our human capital throughout Caricom than Sandals Resorts. We are the only company which has a corporate university where you can come to the company without knowing how to read and write and get up to a master’s degree fully paid for by the organisation,.
If you take Jamaica, 80 per cent of consumption of our purchasing is locally bought. This is product manufactured in Jamaica, agriculture that is grown in Jamaica. And the prime minister of Antigua has been on a vendetta against ‘Butch’ Stewart and the Sandals Resorts group. He is fighting a one-man battle all on his own.
Every single country in the Caribbean is trying to get a Sandals resort or Beaches resort. Every 30 seconds somewhere in the world, an ad runs on national television, be it CNN, MSNBC, Fox, BBC, promoting the islands of the Caribbean.
We have the largest sales force of any company in the western hemisphere promoting travel to the Caribbean. We spend almost as much money as the countries that we operate in combined, their national budget, on promoting the Caribbean.
As I have said, literally every country in the Caribbean is doing anything possible to get a Sandals or Beaches resort because we are a promoting super highway. We are a training and development super highway.
We in fact have had, for years, a concession agreement that was given to us. The prime minister and his Government in Antigua broke their agreement. As far as I am concerned, that man and his Government need to take a look at themselves and they need to say to themselves what is the signal that they in Antigua are sending to the world when a government will break a legally binding agreement with, not just any company, but the leading company in their country.
And we said, you want to break the agreement, no big thing, let bygones be bygones and we’ll move on. But everybody in the Caribbean and all the heads of states right down know that this has been a vendetta. And the man is a broken record going on and on and on. There is nobody, absolutely nobody, PM or otherwise, who is going to talk negatively about Sandals Resorts and its economic contribution to this region of the world and have a basis to do it. Tell him to come and challenge you.
Cliff: He made an assertion about Sandals, they had to write off EC$100 million in taxes. Is that so?
Adam: Nonsense. It’s a prime minister with a vendetta. The economics of Antigua are upside down. They have announced something like 25 developments and not one of them has broken ground. It’s a desperate government trying to attack what is the leading enterprise. He has a vendetta against ‘Butch’ Stewart and Sandals Resorts and that’s all it is.
Cliff: What has motivated that vendetta?
Adam: You would have to ask Mr Browne because one day, on any given Sunday, you wake up and anything could come out of his mouth. You would have to ask him himself as to what is the basis. And if it is so, why are we not standing in court today?
Cliff: Help us to understand this. He said that the previous administration of Antigua granted Sandals a 65 per cent discount in the ABST, the Antigua and Barbuda Sales Tax, which he is obviously against. Is that so?
Adam: In 2007, SRI built 180 suites in a Mediterranean Village. We were granted a concession agreement to build 100 rooms. We built almost 100 per cent more than we were required to. It took us to almost employing 700 people full-time down there.
In the all-inclusive world, Mr Browne does not understand how the calculation of GCT or ABST (VAT tax) works, whereby those taxes are computed within the overarching package. When you buy a resort, whether you are staying at Sandals or any one of the all-inclusive brands, the taxes are a function within the package, it is not a sales tax on top of.
They have deliberately chosen to view this matter, for political reasons, as some kind of displacement of revenue. That being the case, we would have been having the same kind of argument in Jamaica, in Grenada, in Barbados and every one of the other islands that charge a VAT tax.
I don’t think Prime Minister Browne should be making assertions about how Sandals calculates it. We have calculated and we stand by our position that it is absolute and total nonsense. And he can say it as many more times as he wants. He is more than within in his right to challenge it. Why hasn’t he?
Patria-Kaye Aarons: I need a bit more clarity on that write off. You’re saying that the (EC$100 million) figure that he has quoted is not correct or that there is no write off whatsoever?
Adam: The prime minister is making assertions about there being a write off, which is not a base statement. There was no write off. We were given a concession on how we calculate in order to get development. If you go to New York today and you move an office from Wyoming they will give you concessions. This is a normal thing. It exists in Jamaica and all around the world, not just in developing states but in first world states as well. I’m sure this is something we all understand. We were given concessions and we calculated our concessions identical to our agreement. And one Sunday the PM and his team woke up and they said we were, all of a sudden, calculating them incorrectly. We stand by our calculation. We have not written anything off or done anything untoward to the people of Antigua who have been unbelievable to us since 1991, or any other foolish interpretation they [the Government] may wish to make.
Cliff: Another thing he raised is the issue of buying local Antiguan products. And he cited the example of Antiguan rum. That he has an excellent rum there, an award-winning rum, but yet you are not purchasing and selling in your hotel Antiguan rum, but what you are doing is selling Jamaican rum. Is that so?
Adam: In terms of consumption of local products, people can grab at straws on anything. We have a coffee crisis in Jamaica, for example. SRI is the only all-inclusive hotel chain that is pouring Blue Mountain Coffee — 7.4 million cups of Blue Mountain Coffee a year goes through our chain. We are a company that is built on working with the local taxi drivers in the Caribbean. On any given Saturday in Jamaica we’ll move 400 JUTA buses. We work with the local taxi drivers in every island, we work with the local farmers…
We have had one individual in particular who has been working with us as a part of the association in Antigua from we got there in 1991. I chair Jamaica’s national linkages council. It is something I take seriously, something I believe in, buying locally, import substitution, not having to have the dynamics of supply chain team to bring things in from Miami or wherever in the world. Buying locally is good business. It is the right thing to do morally. It is the economic impact you get out of putting these hotels beyond just employment and taxes overall.
There is no company in hospitality that does more in each island for linkages and with the sincerity. So forgive us for putting Caricom to work. Forgive us for being proud of taking Appleton Jamaica rum all over the world, including North America where we are promoting right now. The point is that they can grab at straws but they are nonsense. Challenge them and we’ll throw in the numbers.
Cliff: Are you planning to introduce a limo service and how will this impact your use of local taxi drivers?
Adam: Let me give you an example so you can you can put it into perspective. In Jamaica if you have stayed in our hotel, slept in our hotel more than 70 nights, we will give you a free ride in a BMW to our hotel. You have to be a diamond level guest. We have 10 cars in Jamaica that do that for the top two per cent of our customers. We will move between 300 and 400 JUTA drivers on a Saturday. So the assertion that he is making on Antigua is nonsense. In that hotel we will move 40, 50, 60 buses in a day, moving people in and out and around the hotel. So I have no idea what he is talking bout. We work with the local taxi association, owner-operated transportation where the driver is the CEO.
Patria-Kaye: And it’s that same luxury car service that you are proposing in Antigua?
Adam: In each of the islands we ask when we go in there to put in one or two cars that move the top top end of the suites. As a percentage, they don’t move more than two per cent of our movement, so 98 per cent would be going to the taxi association. Tell me how that could be a crime? I want to be clear, we don’t own our buses. These buses that we are using are local taxi association buses. A company like Sandals could have bought buses years ago. It’s called linkages…
Cliff: The prime minister also said that Sandals and its principals are dead set against his initiative to introduce what he calls ‘entrepreneurial socialism’ in Antigua where the Government, the State, has a stake in these hotel properties.
Adam: Butch Stewart and Adam Stewart signed a Memorandum of Understanding with the Government of Trinidad and Tobago less than three weeks ago with Prime Minister Rowley, where the Government is going to have a stake in the largest hotel, a Sandals and Beaches hotel, that will be built in that amazing island of Tobago. So all I can do is I can put the facts forward. I have no idea what PM Browne is talking about. We just did a deal three weeks ago that contradicts his assertion. If a government wants to invest in a hotel, they are well within their right to do whatever they want.
Do we want to be a part of what he (Browne) is doing with his Government? Absolutely not. Would we do it with another government that we see as more equitable and more fair and less political? We have just done with the Government of Trinidad and Tobago which is moving off oil and strategically moving into tourism more and more. And we have signed an MOU which basically says that we will work out the details but the Government will have a stake in the hotel.
Cliff: So in other words, you don’t trust the Gaston Browne administration?
Adam: I think Mr Browne has put himself in a corner with Sandals Resorts that is very unfortunate, because there is no other hotel which has been more reliable, more consistent, promoting the island of Antigua. We promote it as 365 beaches — one for every day of the week. That hotel has won, consistently for 20 years, world’s most romantic all-inclusive resort award. The accolades are on the wall, we have Antiguans working right through our chain. We have a love affair with the country, the people of Antigua and Barbuda. Antigua was the first island that ‘Butch’ Stewart was bold enough to leave Jamaica to go and try. That became the impetus for us to go to St Lucia, The Bahamas, the Turks and Caicos Islands, Barbados, Grenada and now we are off to Trinidad and Tobago.
Sandals is Caricom at work, and forgive me, forgive my dad and forgive the executive management of Sandals Resorts for having an issue with comments like these. They are libellous, they are radical and they are preposterous.
Patria-Kaye: And so now you are at a crossroads, the Government of Antigua says they are not having this and you are not trusting the Government of Antigua. How do you move forward?
Adam: We go around the world. Tonight we are in Houston, Texas with 600 travel agents; tomorrow night we are in Dallas, Texas with 500 travel agents; next Wednesday we are in Toronto with 1,000 travel agents promoting the people, the beauty and the countries of the Caribbean. So we will get up and we will do our job. We will promote the Caribbean, we will get more visitors to come. When I went on CNN after the hurricane, the last question I was asked is how can the people of the world help the Caribbean. My answer was simple: Continue to travel; get those economic dollars coming. We will continue to buy locally, build locally, educate and develop our labour forces and we will continue to be the great company that we are as Sandals Resorts International.
Politicians will come and go, some will love you, some won’t love you, but I can tell you that at the highest levels of our company we are damn proud.
Patria-Kaye: If the hostility continues, are you prepared to pull out of the island?
Adam: We have one of the most remarkable hotels that we have ever built sitting on Dickenson Bay in Antigua. We love the people, we love the country. Sandals is not going to allow a petty argument to get the better of a company like ourself. So the answer is that we are not going to pull out of Antigua. We are going to continue to do exactly what we have done since 1991 and do it with pride.
If the prime minister wants to own a hotel and wants to become the next ‘Butch’ Stewart, if he is simple enough to believe it’s that simple, let him try… We are passionate we have built something remarkable and we are going to defend it when it needs defending and this is one of those times.