Hilton hotel owners were cheeky: Chavez

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Hilton hotel owners were cheeky: Chavez
(AFP) – 7 hours ago

CARACAS — Venezuelan President Hugo Chavez has said he seized the landmark Hilton hotel on Margarita Island because its owners dared to impose conditions on its use by his government to host a summit there last month.

"To hold the conference we had to ask for permission... and the owners tried to impose conditions on the revolutionary government. No way," said Chavez.

"So I said, 'Let's expropriate it.' And now it's been expropriated."

The Venezuelan government was already a majority shareholder in the Hilton on the Caribbean resort island when Chavez took it over on Tuesday.

"The acquisition by force of the real estate, furnishings, and related assets... of the Margarita Hilton & Suites Hotel Complex, along with the Marina owned by Inversiones Pueblamar y Desarrollos MBK, have been ordered," read a presidential decree in the official register.

The sprawling complex, including 280 rooms, 210 suites, a casino, stores, restaurants, offices and meeting areas, as well as the adjoining marina, will be held by the state tourism corporation Venetur, which reports to the Tourism Ministry.

The hotel, in northeastern Nueva Esparta state, was targeted for nationalization less than a month after it was used to host the South America-Africa Summit on September 26 and 27.

The seizure was billed as part of an "urgent" effort to boost "the social development side of the tourism and hotel industries in Nueva Esparta state."

On Wednesday, the US-based Hilton chain said it was "evaluating" Venezuela's seizure of one of its hotels. A Hilton spokeswoman told AFP that, in the meantime, the facility "remains a member of the Hilton system of hotels."

Venezuela's Minister of Tourism, Pedro Morejon, on Wednesday said the Hilton and its facilities were in an "advanced state of disrepair" and that the government would refurbish them.

"We're going to socialize the hotel," the minister told VTV television, adding that its future facilities would include a "training center for tourism."

He also said that all current Hilton Hotel employees would not be out of a job.

"We're going to change its name," said Chavez. "We'll give it a local sounding name because the Hilton brand is so international."

It is not the first time the Chavez government has checked into a Hilton and stayed for good.

Caracas has already seized the Hilton in Caracas, re-christening it the Hotel Alba, a reference to the Venezuelan-led leftist regional alliance Alianza Bolivariana para las Americas (ALBA).

In the past four years, Venezuela has implemented the nationalization of what is sees as strategic industries, including electric utilities, cement, steel, oil services and banking.

We were assured by the Chavez crowd that the hotel was going under and that, in effect, Chavez was really just buying it out of bankruptcy.

The Venezuelan government has a very odd currency exchange policy, they have held the currency value constant as inflation has ranged between 20 and 30 % over the last few years. This means a tourist using a credit card to pay for expenses in Venezuela faces a huge bill when he/she returns home.

I haven't seen statistics, but my guess is foreign tourists, who would be the ideal client for a Hilton hotel on a Caribbean Island, have been hard pressed to visit when they can go to say Aruba and do it for half the price, and with a lot less worry about crime. Thus one result of the Venezuelan government's exchange policy is likely the destruction of the foreign tourist industry - which means the Hilton hotel indeed has been hurting.

As a matter of fact, Hilton may be happy to see it get nationalized, recover a few million out of the deal, and forget about ever investing in Venezuela until the government changes.