Tucker’s Point Bankruptcy

September 13th, 2013 by De Onion

It should come as no surprise that an 88 room hotel with $150m in debt is in receivership.

88 rooms, $150 million in debt = $1.7million per room. Debt service costs of roughly $300 per night per room.

Average room price of say $595 per night, 70% occupancy = revenue per available room of $416 per night on average.

So with the cost of financing eating up ~70% of hotel revenues you’re never going to be able to make a profit.

I know Tucker’s Point has the club and other revenue generators but even so the underlying numbers are so awful that we should never realistically expect new build hotels to make money in Bermuda unless there is some radical change in the economics. It is also a vindication of BEST’s economic argument against the SDO and another slap in the face of the PLP Ministers who seem to have fallen hook, line, and sinker for bad arguments for granting the 2011 SDO.