A report that New Castle Hotels will be given a one-year contract to continue managing the Digby Pines Golf Resort and Spa was denied last week by a spokesperson for the province’s department of Economic and Rural Development and Tourism.
For the past 10 years, Nova Scotia’s three Signature Resorts have been managed by American-owned New Castle Hotels, which charges a management fee of three per cent of total revenues. Its contract expires in January, and the company has said all three resorts are in need of multi-million dollar renovation.
After the province called for expressions of interest, New Castle was one of the four companies to indicate its further interest in operating the resorts, which include Liscombe Lodge on the Eastern Shore and Keltic Lodge in Cape Breton.
No details of any proposal have been revealed since the deadline last January to express an interest.
“A plan is in the works,” said the government official, “but no decision has been made.”
The other companies to indicate an interest in one or more of the resorts are Cape Breton Resorts, which operates three resorts on Cape Breton Island; Pacrim Hospitality, billed as one of Canada’s largest privately-owned hotel management and development companies; and United Gulf Developments of Halifax.
Economic Development Minister Percy Paris has suggested one option is sale of the resorts to private interests, and he has not ruled out closing one or more of the resorts.
Keltic, although operated by the province, is owned by the federal government.
Municipality of Digby warden Linda Gregory last January wrote Paris about council’s concerns for the future of the Digby Pines resort, and urged continued provincial ownership.
“Provincial ownership of an asset such as the Digby Pines provides the province with a unique opportunity to preserve the history associate with the hotel,” she wrote.
Paris did agree that the Signature Resorts are significant economic and employment generators in their communities and important to Nova Scotia's tourism industry.
The Connecticut-based New Castle Hotels took over resort management in 2002. Last year was the first time since then that the resorts lost money. The three reported an operating loss of $717,382 for 2009-10 on revenues of $9 million,
Upgrading the resources to modern standards reportedly would cost as much as $22 million in maintenance, grounds work and upgrades to dated fixtures and furniture.
An unofficial source at the Pines says the Digby resort had over $4 million in revenue last year, and returned about half of that to the region in wages. The main resort building is located within town boundaries and is a contributor to Digby’s tax base.