It was Richard Bradford's personal connection to Barbados' Sandy Bay Beach Club Hotel that made him take a second look when the property came up for sale. Bradford is one of three directors of Sandy Beach Holdings 2014. The others are Barbadian hotelier and past president of the Caribbean Hotel and Tourism Association, Peter Odle, and director of the UK-based property group Candelisa, Abi Ekoku. A conversation over dinner with Ekoku sparked the idea to purchase it.
"We both heard about the Sandy Beach Hotel being offered for sale," he said. "My involvement with the Sandy Beach Hotel goes back to nearly 30 years. Had it not been that hotel, in that location, it wouldn't have been something that would have triggered my interest so much. I have very fond memories of being there," he said.
Bradford, whose mother is Trinidadian, was born in the UK and lived in Trinidad until the age of nine. He returned to the UK to study and said when he came back to the Caribbean at 20, one of the first places he stayed was Sandy Beach.
He is banking on the fact that many Trinbagonians who have vacationed in Barbados also have fond memories of the hotel, which is being re-christened The Sands Barbados.
"It is one of about two hotels in Barbados, the other being Accra Beach, that has been very synonymous with T&T tourism in Barbados," said Bradford.
"I think that Trinidad being a very important market for us will be part of the success of the hotel."
In the 2015 incarnation of the property, which is located in Worthington, between St Lawrence Gap and Accra Beach in the south of the island, Bradford is not only catering to tourists, but is also offering investors the chance to take away more than the holiday experience.
Closed in 2009, the 130 room hotel was reconfigured to its original 87 apartment units. Sandy Beach Holdings 2014 is offering half of these for sale to investors below US$500,000, a bargain, according to Bradford.
"Barbados was once the playground of the rich and famous," he explained. "It was somewhere you went when you had a lot of money and were looking to buy property. You could have spent $4, $5, sometimes $20 million to get a property on the beachfront. Certainly, there has been a great softening in the west coast of Barbados in terms of very high-end property. Those tourists have a lot of choice in a global market and they do have wider perspectives in terms of where they want to stay and invest their money."
The Sands Barbados, though, hopes to offer potential investors the luxury of the high-end west coast properties, without the associated price tag, with properties ranging between $225,000 and $400,000 on the island's south coast. There are studio, one bedroom, two bedroom, three bedroom and penthouse apartments available.
According to The Sands Web site, the only other costs a purchaser can expect are for furniture and furnishings and an annual maintenance fee which includes insurance, utility and property taxes.
Bradford said investors can expect "medium to high investment returns", of minimum four to five per cent.
"This is based on the investment and the revenue that is generated from the hotel operation but on top of that, they will also have a very generous personal amount of occupancy should they wish to go stay in their own apartment or in the hotel in general.
"It is what you call a "stand off" investment. When you buy a property and rent it out you have got to consider a lot of things: the maintenance, getting a tenant, keeping a tenant, fixing the stuff, general wear and tear. In this case, you invest in a property but get as good a return as if you had invested in a single property investment. It is a stand off in that the hotel generates enough income to maintain it very well, without you having to get involved in the nitty gritty. Simply, you invest your money, sit back, collect your check, go on holiday when you want to."
Bradford said the investor receives a 50-50 split on the hotel's room rate.
Cautious optimism
Barbados' economy–with tourism as its mainstay–was heavily hit by 2008's global financial crash. In the intervening period, government has cut public expenditure, ending several infrastructural projects and axing 1,800 public service jobs with plans to eventually lay off 3,000 public servants in total. In July 2014, government also had to revise its budget deficit projections upwards to 12.4 per cent of GDP and in December 2014, Standard and Poor's downgraded Barbados' long term sovereign from B to BB-, with the possibility of further downgrades.
For 2010, 2012 and 2013 the Barbados Hotel and Tourism Association (BHTA) reported overall decreases in stay overs, with significant decreases in arrivals from major markets over the period December 2010 to December 2013. However, there was a major uptick in stay overs in 2014, with overall arrivals increasing by 19.7 per cent over the previous December.
To February of this year, the BHTA recorded an increase of 14.9 per cent increase over arrivals in February 2014. This has been the basis of cautious optimism in Barbados, with hopes that a resurgent tourism industry would lead its economic recovery.
Future on the south coast
Those optimistic about tourism's immediate prospects include Bradford himself, who thinks Barbados' south coast is the future of the island's tourism. He is willing to wager on it.
"Sandals has recently made multi-million dollar investments in Barbados in the same south coast area that we are. Butch Stewart's Sandals is full and I am going to bet my money on him. If he thinks it's a good deal, I know it's a good deal."
The property was listed at US$11 million. Bradford did not disclose his investment, but said purchase was funded between Sandy Beach Holding 2014's three directors.
"This, plus the initial development fund, .we are working very closely with a couple of local banks."
Bradford thinks Barbados' future as a real estate hot spot and tourist destination lies in the middle of the market, catering to the American and European all inclusive package traveller.
But he acknowledges that tourists and investors from T&T form an important part of the equation.
Revisiting the history of the original Sandy Beach, Bradford said, it was built by Trinbagonians back in the 1970s.
"Back in the day, when Trinis had very strict currency regulations, because it (Sandy Beach) was built by Trinis, it was one of the first and one of the only properties Trinis could spend money readily outside of their country to invest in foreign property."
The Sands Barbados represents an opportunity for a new generation of Trinbagonians not only to create their own memories but to invest in them as well.
The hotel opens in January 2016.