Sinalei Reef Resort to close - for now
Sinalei Reef Resort and Spa is closing its doors to weather the coronavirus storm, with no date set for a planned reopening.
Manager Sose Annandale told the Samoa Observer she is heartbroken but determined to stay optimistic about the 24-year-old resort’s future.
“It’s heart-breaking really, especially when you see the number of livelihoods impacted. Already we are down to the last 16 of the 106 staff we had.
“You put your blood, sweat, and tears into a business, you put your heart and soul into and you hope you will never encounter these situations but we are dealing with it as best we can.
“We are hoping and praying that at the end of it we will come out safely and that we can continue being of service to this community.”
Throughout 2020, the resort management has fought to keep Sinalei’s doors open. But recent months have proven that to come at a cost.
From 106 staff to just 16 part timers, Ms. Annandale said watching the impact of the pandemic on her community’s livelihoods has been difficult.
In the Poutasi and Siumu area alone there are a handful of resorts and beach fale operations who no longer employ the number of locals they once could. Neighbouring Coconuts Beach Club Resort and Spa closed its doors almost immediately after the borders were shut.
But Ms. Annandale and her small management team have been determined to stay open, almost to a fault.
“You want to continue being hopeful that the future is going to be a little bit brighter, I know everyone is hanging on to the spark of hope we are going to overcome this eventually, but you also at some point need to face reality.
“We probably should have closed our doors sooner than this, to be honest, but we were hanging on in hope we could just make it another month, and another month.
“We have to do what we have to do to stay afloat, and keeping our doors open is not a viable option for us at this point.”
Despite their best efforts, the team could not shave the prices down low enough to attract the numbers needed to keep the doors open and offer the quality people expected of the resort.
Between paying staff, creditors, utility and grocery bills, Ms. Annandale said staying open has proven unsustainable.
Until last week, Sinalei had managed to keep between 25 and 30 staff employed, albeit on limited hours. Now with just 16 on the books, Ms. Annandale worries about her former staff’s wellbeing.
Majority are not in new employment, she suspects, with either family responsibilities or plantations to work on instead.
It is even hard to keep the last group in their jobs, as the ever-shrinking hours of work don’t exactly entice them.
“Some have gone to school and taken up courses, but I think many have fallen by the wayside,” Ms. Annandale said of the staff that were let go.
“When [the Ministry of Finance] were here giving out the wage assistance to the staff I did talk to some of them who said they were working the land.
“Unfortunately for us as an employer many have lost interest in coming to work […] it’s been hard for us to keep interest, especially when their hours have been heavily reduced.”
With the pandemic out of anyone’s hands it was always going to be a hard slog keeping a resort open. But Ms. Annandale said the decision to introduce an expensive brand new tax system was poorly timed.
The Ministry of Customs and Revenue has been gradually rolling out the new Tax Invoice Monitoring System (T.I.M.S.), and requires all businesses to introduce new digital systems that allow for more efficient and convenient tax monitoring.
But these new systems come at a hefty cost, with some business reporting to the Chamber of Commerce and Industry they are spending hundreds of thousands on upgrading their system to comply.
At Sinalei, a partial upgrade to their existing system had already set the resort back $40,000 when the T.I.M.S. was introduced, essentially making their investment a waste.
“I think timing has been a real problem for us,” said Ms. Annandale.
“Since the TIMS concept was introduced we have had the measles and now COVID-19, so I think perhaps another time and with enough warning I am sure we could have worked our way through it.
“But right now it’s not the right time to be introducing a system such as this because it puts even more pressure on the industry.”
While the Christmas and New Year period may have been a welcome boost for many accommodation sites, 2021 may prove harder still than the last year.
Ms. Annandale said the industry will be struggling to stay optimistic in the coming months, and that it desperately needs encouragement from its leadership.
“It is what it is. There are restrictions in being able to be given the kind of help that I believe our industry could get, there are reasons behind that but I do believe our industry could have had a lot more assistance than it has received thus far.”
In the not too distant future, both Sinalei and its peers around the country may have to consider trying to sell up rather than continue sinking funds into the properties.
“Obviously we try and maintain some level of optimism that we won’t get to that but at the end of the day, I don’t know. There is so much uncertainty there, we don’t how much longer we can sustain it,” Ms. Annandale said.
“It would be really sad if at the end of the day many of us local operators will slowly but surely fall and we will all be eventually bought out by people from outside.
“That’s the reality we will face if our local businesses are not able to sustain or overcome the hardships they are facing right now.”
Meanwhile Ms. Annandale expects the doors to stay shut as long as Samoa’s borders do. For a while she was holding out for a travel bubble with the country’s main tourist providers Australia and New Zealand, but this is appearing less and less likely to happen soon.
“We were really hopeful that at some stage we could open up a bubble with New Zealand. If we were able to at least have the opening of those borders, that would open up the opportunity of visitors to come in.
“American Samoa too is another market that would be a huge help because they have money to spend. That would at least be a trickle of business.”
Sinalei first opened its doors in 1996. It has 29 rooms, each standalone villas or fales, and straddles 33 acres, including a golf course.
In 2009 the resort was almost entirely destroyed by the immense tsunami, costing the family more than NZ$5 million in damage. The tsunami also claimed the life of co-owner and founder Tui Annandale.
In the decades the resort has been opened, it has suffered time and again, Ms. Annandale said.
“We’ve have encountered every imaginable calamity of nature from tsunamis, earthquakes, and cyclones.
“We managed clawed our way back into the game in 2019 when we actually declared a small net profit, the first in many years. Our 2019 victory came to an abrupt end in October 2019 when the measles epidemic broke out and the downward spiral has continued to now.”
Now with the decision to close, the management is focused on maintaining the huge property with its skeleton crew, and putting energy into the district and the community.
“When we do open our doors eventually – and we hope we do – we will be at least ready to hit the ground running.”
In late October, the Sinalei family decided to ask its guest community for help keeping the resort alive. Through a campaign titled Sowful Journeys, the resort and Poutasi Development Trust has been fundraising to keep staff paid and to invest into community projects like farming, providing school lunches and entrepreneur training programmes.
So far it has raised NZ$16,652 through its PledgeMe page, with the site now closed for further donations, and in total over NZ$20,000.
Ms. Annandale said the funds will still be used to keep the remaining staff paid, and for more energy to be put towards the long-term community projects.
Starting in February, the project will fund and deliver 3,400 lunches for school children over three months.
It will also support two farming families with a guaranteed three-month supplier agreement, tunnel houses, water tanks, commercial farming equipment and consultations.
Sinalei will consider opening for functions and events. If you are interested, contact [email protected].
* The headline of this article has been amended to avoid any confusion that the resort's closure plans are permanent, not temporary, as the story indicates.