Shame on you! Yes, shame on the government of St. Maarten for allowing the Mullet Bay property to rot away. For whatever reason the government has not stepped in to force a resolution to the egregious act of letting this premier Caribbean property degrade the island. The Mullet Bay situation has gotten so bad that no one seems to even notice the problem anymore.
There has been a huge loss of tourism to the island since 1996 and the loss continues. The economic impact on St. Maarten has been a disaster. I would like to try to put this issue in some financial perspective. The assumptions for my calculations are realistic and they should open everyone’s eyes as to the economic drain the St. Maarten government has allowed to take place on the island. Let’s assume that the Mullet Bay property was rebuilt with 750 rooms, golf course and all the competitive amenities that would attract tourists to St. Maarten and, a premier developer with a name that attracts tourists would do the work. For financial purposes let’s further assume the following:
* The property became operational in 1999
* Calculations are from 1999 thru 2018
* Yearly occupancy rate: 60 per cent
* Number of employees: 750
* Room tax rate: 5 per cent
* Airport departure tax: $30 per person
* Average employee salary per week: $300
* Average employee tax rate: 20 per cent
* Average room rate: $300 per night
* Average people per room: 2
* Average stay is 1 week per room
* Average spending per person for non-room expenses on the island: $75 per day
Therefore, we can calculate that this property would have generated from 1999 to today:
* Room revenues of $936,225,000
* Room taxes at 5 per cent, of $46,811,250 for the St. Maarten government
* Additional revenues that would be generated into the economy from tourist spending would be $468,112,500
* Additional tax revenues that the government would receive from the airport departure fees would be approximately: $26,676,000
* Additional revenues received by the St. Martin economy for employees that are now working in newly created jobs: $210,000,000
* Additional payroll taxes received by the government by the employees: $42,120,000
Let’s stop here and summarize the impact.
* A loss of money over 19 years flowing into the St. Martin economy: $1,614,937,500. That is over $1.6 billion!
* Tax revenues lost by the St. Maarten government: $115,607,250
* This is just up to the present. More revenues from these areas would continue to be gained in the future
* The above figures do not include the additional huge income from hotel support services and taxes from areas such as linen cleaning, maintenance, food and beverage, landscaping, utilities, car rentals, etc.
* The figures also do not include the large amount of taxes the St. Maarten government could have received from the hotel
* Let’s assume my calculations are off by 20 per cent, the financial impact is huge and a disgrace for the government for not taking action!
Having a world class resort at Mullet Bay would build upon the historic Mullet Bay legend. Tourists having a positive experience at the new resort would create more word-of-mouth advertising for St. Maarten. Some of the increased tax revenues could fund some much-needed TV advertising of the island, which has been sorely lacking.
The foolishness by the St. Maarten government has been going on since 1996 and even if a decision was made today to set Mullet Bay right, it would be another 3 to 4 years before tourists come to the new property and boost the island’s prosperity. This is a disaster and should be immediately addressed and included as part of the reconstruction effort caused by Hurricane Irma.
Why does the government let this foolishness continue?
Thomas Metz
