Hundreds of hotel workers face redundancy because of the closure of a leading Bermudian resort for almost two years.

The 18-month shuttering of the Fairmont Southampton hotel for renovations would mean about 750 layoffs, roughly 500 of them Bermudian, and cause “significant hardship for many”, according to Kiaran MacDonald, the general manager.

Mr MacDonald said staff were “resigned” to the news, broken at a meeting yesterday, which he said marked “a very sad day for all our colleagues, Fairmont Hotels, and indeed Bermuda”.

The South Shore hotel, hard-hit by the Covid-19 crisis, is to get a $100 million refurbishment, with a projected reopening in April 2022.

The move, effective October 23, takes out of commission 25 per cent of Bermuda’s total hotel guest rooms, responsible for up to 30 per cent of air visitors to the island. The landmark hotel, which opened in 1972, was the island’s biggest resort.

The Bermuda Tourism Authority was also briefed on the decision to close the hotel.

Glenn Jones, the interim chief executive of the BTA, said the island’s tourism industry would “successfully withstand this extended hotel closure”.

Mr Jones conceded that the loss of jobs, in the short term, “while unsurprising, is unfortunate and painful”.

He added: “A renovated hotel resort with upgraded meeting space, rooms, and amenities, will, however, ultimately be in the best interest of the country and industry.”

The Progressive Labour Party election platform, announced on Tuesday night, included a commitment to assist in the redevelopment of the hotel.

David Burt, the Premier, said yesterday the redevelopment showed “great confidence in Bermuda and the next phase of our tourism”.

Mr Burt, who also holds the tourism portfolio, added: “Today’s announcement is one that will signal to investors and our valued tourism stakeholders that Bermuda is determined to emerge stronger following this pandemic.

“We now have the prospect of a new addition to our tourism product, the opportunity for jobs in the construction phase and new opportunities for Bermudian tourism professionals in another signature hotel.”

But Craig Cannonier, the leader of the One Bermuda Alliance, countered that the Government needed to say where the laid-off workers would go.

Mr Cannonier added: “We have seen nothing from our government, nothing from our Premier that has given any light of hope that they will continue to stimulate the economy to allow these kinds of losses to be made up for.

“There is nothing on the table at all, so these 700 people who represent probably 700 different families are now going to be struggling. This is a challenge that we must face and our Premier needs to stop putting his head in the sand.”

According to Mr MacDonald, up to 60 workers could be maintained in roles such as maintenance and security.

Most work-permit holders have already left the island.

Mr MacDonald said management’s discussions with the Government on finding new jobs for staff had been “extensive”.

“We could see where this was going,” he added. “We wanted to apprise key people such as Government as much as possible.

“I know they’re working very hard on identifying opportunities with retraining or perhaps other job functions, within the industry or outside it.”

Staff will remain on layoff for the next month before receiving severance packages — a move praised by Chris Furbert, the president of the Bermuda Industrial Union.

Mr Furbert said uncertainty over the hotel’s fate had left unionised workers “very frustrated about their future employment”.

He added that those concerns were raised at a BIU meeting last month. The BIU announced at the time that worries over the payment of redundancy money would be raised with hotel management.

Mr Furbert said there were two meetings where the union discussed “the lack of communication” and the hotel management was told that “this cannot continue”.

He added that “staff will be offered redundancy pay in accordance with the collective bargaining agreement”.

The mass layoff was said to be the biggest redundancy in Bermuda. Mr Furbert said that, although “700-plus” people would be unemployed, “the bright side is that the hotel will be fully renovated, which will bring job opportunities for those in the construction industry”.

He said the union was satisfied that the terms of the collective bargaining agreement had been followed. He added: “Once the hotel reopens after the renovation period, we look forward to those employment opportunities for Bermudians.”

Gencom, an investment firm based in Miami, Florida, acquired the resort in December and announced plans for widespread upgrades.

But the global pandemic and closure of airport left the iconic hotel largely out of operation since March. Mr MacDonald said: “We’ve done our absolute utmost to keep our colleagues working through the pandemic.”

By July, however, workers were told “the situation looked bleak” and to be “prepared for the worst”.

The Turtle Hill Golf Club will keep running, along with the Boundary Sports Bar and Grille, which both draw on-island business. Even with the writing on the wall, Mr MacDonald said the announcement yesterday had been hard.

“It’s one thing to be prepared,” he said. “When it actually comes to pass, there’s a level of shock hearing those words.”

Mr MacDonald said the renovations would put the Fairmont Southampton on a par with the world’s top resorts, with good work for Bermudians.

He said the new managers had “robust design efforts for all areas of the resort”.

Pledging to keep the community informed, he added: “We have a very tough 18 months ahead — but so does the rest of the world.”

Mr Jones, the BTA chief executive added: “Our forecasts indicate a negative impact on commercial airlift during the extended closure, but our team is actively working with the Government on mitigation efforts.

“We believe Bermuda’s tourism industry can successfully withstand the closure, and we look forward to a redeveloped landmark property that commands buzz and helps revitalise job opportunities for the future.”

Stephen Todd, chief executive of the Bermuda Hotel Association, said the closure “significantly reduces our overall inventory, going into 2021 and beyond”.

He acknowledged the move gave other hotels a chance to increase overall occupancy, but called it “a sobering moment for many of our industry colleagues — it’s not something any of us like to see”.

Mr Todd added: “The bright aspect is the announcement does indicate its owners are looking at a redevelopment which we believe will provide opportunities for employment during renovation as well as future employment.”

He said the investment would be one of the largest hotel overhauls seen in Bermuda — citing the Green family’s $100 million renovation of the Hamilton Princess & Beach Club in 2016.

•To read the Fairmont Southampton statement in full, click on the PDF below “Related Media”