OUTRIGGER THREATENS TO LEAVE MAJURO HOTEL

By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, Dec. 9) - Outrigger Hotels in Honolulu has given notice that it intends to terminate its management of the Outrigger Marshall Islands Resort here in Majuro in early Jan. 2004 unless urgently needed renovations, estimated to cost more than $2 million, are funded by the government.

Outrigger’s chief operating officer in Honolulu Perry Sorenson wrote to Outrigger Marshall Islands Resort board chairman Alex Bing on Nov. 26 to advise that Outrigger is initiating the 45-day notice of intent to terminate the management agreement that it has held with the Marshall Islands government since 1996, when the Majuro hotel first opened in the Marshall Islands capital.

"We can no longer operate in a situation that poses increasing safety risks for our valued employees and guests," Sorenson told Bing.

A spokesman for President Kessai Note said Thursday that the president was keen to see the management arrangement with Outrigger continue.

The Marshall Islands government owns the 150-room resort that was built to make it possible for the Marshalls to host the annual meeting of the Pacific Islands Forum that was held in Majuro in 1996.

Funds for needed renovations at the Outrigger Marshall Islands Resort have been budgeted and are expected to be available soon, according to a Ministry of Finance official who asked not to be named. "There’s no question money for Outrigger is needed," he said. "It’s just an issue of timing."

After expressing pride in Outrigger’s seven-year relationship with its Marshallese staff, customers and the larger community of the Marshall Islands, Sorenson said the Majuro hotel has "reached a stage under which it has urgent capital needs in order to address a number of serious structural and other problems."

Sorenson told Bing that Outrigger has "consistently documented our concerns about this steady deterioration since early 2002."

In February of this year, Outrigger’s property services management team from Honolulu, including an independent structural engineer, met with the hotel board and "outlined actions needed within three months to ensure the structural integrity of the building."

The "lack of desperately needed capital funding for the hotel continues to contribute to the rapid decline in the condition of the building," he said. "We have increased concern for the safety of both the employees and guests at the hotel, with the conditions worsening at an exponential rate."

Because the overall cost for renovating the hotel is more than $2 million, government funding sources had to be juggled to accommodate the capital improvement work at the hotel.

Money is available, and a budget plan for the Outrigger renovations, along with those for public schools, health dispensaries and other government-funded infrastructure projects, has gone to the cabinet for final approval, the Ministry of Finance official said.

In a telephone interview from Honolulu, Outrigger president Bill Henderson said Thursday that he "remained hopeful of resolving the issues and remaining in the Marshall Islands."

The Majuro resort was Outrigger’s first hotel management contract outside of Hawaii, where it operates a large chain of hotels. Since starting in Majuro in 1996, Outrigger management expanded to manage major hotels in Guam, Fiji and other parts of the South Pacific.

"The Outrigger Marshall Islands Resort was our first-born child outside of Hawaii," Henderson said. "It proved what we can accomplish working with a host culture and training Marshallese (to operate the hotel). We hope to remain there."

December 9, 2003

Marianas Variety: www.mvariety.com

 

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