By Lagi Keresoma
APIA, SAMOA – THURSDAY 16 MAY 2019: About ten hotel owners have been given 18 months to pay their loans in full with the Development Bank of Samoa (DBS).
It is a compromise with the DBS that has already moved to repossess these struggling businesses by 24 of this month which is next Thursday.
The Minister for Tourism Salā Fata Pinati, in an interview with Talamua today confirmed Cabinet’s decision.
“The Government changed its decision and now giving the hotels 18 months, so by December 2020, their loans should be paid off in full,” said Sala.
He said these hotels took out big loans from DBS but failed to live up to the agreement made with the bank.
Salā said Cabinet had earlier endorsed repossessing these hotels and intend to seize more and auction out their properties to help pay off their loans.
“DBS already put two hotels up for sale and the auctioning of other hotel properties is to be executed on the 23rd and 24th May, 2019,” said Salā.
The two hotels up for sale since last week are Moanalisa at Vaitele and the Orator at Tanumapua.
Asked how many hotels are included in the order, Salā said he was not sure as DBS continues to analyse their reports and add names to the list.
Last week, owners of some of these hotels sought the Minister’s help, and he in turn took the matter up with the Prime Minister and Cabinet.
Salā said it was not easy for Cabinet to go back on its decision “but this Government is for the people of Samoa and people come first.”
He said these loans are long standing hence Cabinet’s decision, but Cabinet was also conscious of the upcoming Pacific Games in July.
Writing off these loans was never an option
Salā emphasized that Government never considered writing off these loans, and whilst he could not disclose the amount owed, he doubts if 18 months is enough time for these hotels to pay off their loans in full.
Government digs into the Emergency Fund
Salā also confirmed that due to this dilemma, Government now has to assist DBS financially in order to meet their commitments to the overseas Banks and financial institutions it got the initial loans from.
He confirmed that the Government will use the Emergency Funds to offset DBS commitments in lieu of the hotels paying up by December 2020.
Salā also used the opportunity to encourage hotel owners to revisit their standard costs and do other necessary measures to boost the morale of their service so people and guests could be enticed to stay and spend money with them.