Aug. 13, 2009--The Divi Tiara Corporation says it will not dispose of its Cayman Brac property, but will redevelop it to a higher standard. The corporation is also calling for improved airlift from both Miami and Texas.

Meanwhile Leader of Government Business and Minister of Tourism, Hon McKeeva Bush, says he will meet the Cayman Brac business community at the end of the month and will discuss the Divi Tiara prior to contacting management with an ultimatum.

"I'll be talking to Cayman Brac businesses about how to deal with these men," Mr Bush said, referring to officials at the North Carolina-based hotel corporation.

"What holds true for the Hyatt, though, holds true for Divi," he said. "They cannot continue to pull down [values], it cannot continue to deteriorate. People like them cannot expect to just do nothing," Mr Bush said.

Weeks ago, Mr Bush vowed to deliver "an ultimatum" to Divi officials similar to that given to Asif Bhatia, owner of the local Hyatt Regency in the Seven Mile Beach area, seeking action on the abandoned property by the end of the year.

"I have not heard from or received any communication from Mr Bush," said Divi Resorts president and CEO EJ Schanfarber.

"We have absolutely no interest in disposing of the resort and have never seriously considered any purchase offer. We remain firmly committed to Divi Tiara and will redevelop when the time and business environment supports the investment. I sincerely hope that the Cayman government understands and appreciates our position," he said.

In September 2006, the 71-room hotel suddenly shut its doors, citing economic problems led by insufficient airlift from the US.

Six of its 12 timeshare units continued to operate; however, after last November's Hurricane Paloma the corporation ended all operations, although the facility was loaned to government to house the Brac's reconstruction workers. The temporary lease expires on Monday, 17 August.

"Prior to Hurricane Paloma, we were reviewing several scenarios pertaining to the redevelopment of the Divi Tiara site," Mr Schanfarber said, linking the plans to regular airlift from Miami and Texas.

"Airlift from a major Texas city and direct from Miami to the Brac is essential for us to sustain a new development," he said. "We dedicated a significant amount of resources to studying the potential of the destination and believe a new resort is viable if airlift [were] in place."

A slowing economy had also impeded any action, he said.

"The collapse of the world credit markets has resulted in our redevelopment plans being placed on hold, but they will eventually strengthen as the economy rebounds," he said.

Mr Bush acknowledged that improved airlift might help, but said it must be commercially justified.

"Perhaps there will be better airlift," Mr Bush said, "and Cayman Airways will keep providing the best possible service, but [Divi] can't be expecting the airline" to launch routes on behalf of the hotel.

Sister Islands Member of the Legislative Assembly, Moses Kirkconnell, said the Divi had been an "important part of our tourism product, and was extremely well-recognised in the dive community world wide. When the Brac lost that, we lost a big percentage of the dive community that used to come".

"We should certainly do whatever we can to have the owner rebuild or find someone else who will," he said.

Prior to Paloma, he said, Cayman Airways had planned twice-weekly Brac-Miami flights, but cancelled the routes after the storm.

Additionally, he said, more than 100 rooms were scheduled to come on line by January. The Brac Reef Resort, Cleveland Dilbert's new Alexandria Hotel, the third phase of the Carib Sands and 24 two-bedroom condominiums would more than make up the Divi Tiara loss, but he welcomed moves by the Chapel Hill hotelier.

"I believe airlift directly into the US is extremely important, and we'll have to see what happens. We certainly need the rooms. There are going to be more than the Divi Tiara had, replaced with a band-new diversified tourism product," Mr Kirkconnnell said.

Mr Schanfarber said a redeveloped resort would no longer cater to the traditional diving clientele, however.

"Our new resort would be destination-oriented and not necessarily based on supporting the current dive market," he said. "We believe that there is -- or will be -- sufficient inventory to satisfy the needs of the dive market in Cayman Brac.

"Our strategy was to develop a new customer base for the Island taking advantage of the serene surroundings and low-density nature of the Brac," he said. "We had conducted a focus group in Cayman Brac to establish target markets and strategic assessments regarding the viability of the destination. Our conclusion supported our redevelopment scenario contingent on our ability to secure appropriate and acceptable third-party financing," he said.

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