Cara to close Kitty hotel
-steep rise in power cost among factors cited
Stabroek News
January 8, 2004
Cara Inn Hotel in Pere St, Kitty is to close at the end of January due in part "to a meteoric rise in electricity costs" and the "stagnant (and possibly declining) socioeconomic environment" in the country.
The closure will mean job losses for at least 28 employees and comes only months after the closure of the once popular Palm Court Restaurant and Bar.
A press release from Cara Hotels says directors Shaun McGrath and Paul Stephenson took this strategic decision in December as part of an overall business consolidation and rationalisation process.
"We will be concentrating more on the property ownership and management contract side of things, and less on rental properties for the forseeable future ..." McGrath said.
Cara Inn was renting a section of the Russian embassy and this type of arrangement "significantly reduces flexibility and restricts options"... the press release noted. It added that "efforts to work with the Russian embassy to agree and implement a survival plan have not been successful... we've considered and suggested a number of potential solutions ...but none seems to be acceptable and workable to the Russian embassy administration as a long term solution."
In a comment to Stabroek News, McGrath said the main factor was the rise in electricity costs which had reached $1.8M a month "a lot for a 19-bedroom hotel".
He said this was double what the chain was paying when it opened in early 2001. Coupled with that, he recalled that in the last 18 months many regular customers from the Caribbean were not allowed to come to Guyana by their companies because of the crime situation.
He said the Cara Hotels chain had invested some US$400,000 in the location in part in upgrading the building.
The closure is significant for the tourism sector given that preparations for any hosting of World Cup games in 2007 will depend on hotel capacity.
Cara Hotels still operates Cara Suites in Middle Street and Cara Lodge in Quamina Street where a new wing is being constructed bringing the total number of rooms to 34.