International edition
September 26, 2020

After renovations

Puerto Rico's crumbling economy causes another casino closure

Puerto Rico's crumbling economy causes another casino closure
El San Juan Hotel, in Carolina’s Isla Verde district, announced that due to challenging economic and industry dynamics, it has decided not to reopen its casino when it reopens February 5.
Puerto Rico | 01/18/2017

El San Juan Hotel, in Carolina’s Isla Verde district, announced that due to challenging economic and industry dynamics, it has decided not to reopen its casino when it reopens February 5.

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ldquo;Over the past several months, El San Juan has undergone one of the most extensive renovations in since the property opened its doors in 1958,” said Andro Nodarse-León, of León Mayer & Co., co-owner of the hotel, adding that more than 500 local construction employees have been working at El San Juan since it temporarily closed our doors in mid-August.

“As the renovation of El San Juan Hotel reaches its final stages, we have been facing a tough decision not to reopen our casino,” Nodarse-León revealed in written statements sent to Caribbean Business.

With regards to casino employees, which number around 100, the casino will be making severance payments to its union and non-union employees while they transition to other opportunities, Nodarse-León said, adding that the hotel has not identified any specific plans for the casino space and will consider all options through 2017.

The León Mayer & Co. partner went on to explain several of the reasons for the decision, among them the “growing competition of an emerging casino market in the US [mainland] that has negatively affected the demand for casinos in Puerto Rico; increasing competition from unregulated, untaxed slot machines located throughout the island, including outside of hotel casinos; uncertainty about the additional effects of the rollout of a video lottery system across the island, [and a] burdensome slot machine revenues-based tax structure that becomes more onerous as industry volumes decline.”

Nodarse-León also highlighted the presence of the Zika virus in Puerto Rico, which has led to significant declines in the financial performance of the island’s tourism industry

“While the virus has been dissipating and the World Health Organization (WHO) recently declared that Zika was no longer a global emergency, the impact of Zika will still be felt in the financial performance of hotels and casinos during 2017 in Puerto Rico as the pace of future room reservations for 2017 is behind historical levels,” he noted.

The hotel employs around 500 employees and the multiple retail outlets and restaurants that are also part of El San Juan employ another approximately 150 staff members. “We are proud that thanks to the investment we made, we added approximately 60 new jobs and we are expecting to add even more over the course of the next two years,” he went on to say.

The development at El San Juan Hotel is the latest in a string of casino closings on the island, which include the casino at the Intercontinental Isla Verde, which closed in January 2016; Sheraton Old San Juan, in September 2015; Condado Plaza, in July 2015; Radisson Ambassador Plaza & Casino, whose entire operations closed in April 2015; El Conquistador in September 2012; Gran Meliá Rio Grande in March 2012, and the Caribe Hilton, which in a similar move to El San Juan Hotel, reopened in 1999 without a casino.

 

 

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