GUAM HOTEL SOLD FOR $25 MILLION

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By Ryota Dei

HAGATNA, Guam (Pacific Daily News, May 18) – Two subsidiaries of a company listed on the Tokyo Stock Exchange have purchased Hotel Okura Guam for $25 million in a deal reached on Monday.

Under the new owner, the hotel will undergo an unspecified amount of major renovations to revive two sections that have been mothballed because of damage from Supertyphoon Pongsona in December 2002.

All of the hotel's estimated 170 employees will keep their jobs, and the renovations to revive the hotel's 218-room South Wing and the Lanai buildings will mean an increase in the number of jobs at the hotel, said Kenji Takayanagi, the hotel's general manager.

The hotel will stay under the management of the Okura Group and will keep the brand, he said.

Hotel Okura joined the growing list of major Tumon Bay properties that shifted owners in recent months.

The multimillion-dollar ownership change happened in the form of stock transfer, Takayanagi said.

Guam Resorts Inc., a subsidiary of Hotel Okura Co. Ltd. which had owned and managed Hotel Okura Guam, reached an agreement Monday to sell 100 percent of its stock to two subsidiaries of the Iida Sangyo, one of the major real estate developers in Japan. The official transfer takes place on June 1, 2005.

The Iida Sangyo is one of the major real estate developers in Japan, and also owns and operates spa facilities and golf courses there. However, this will be the first time the group goes into the hotel business, according to a report by the Nihon Keizai Sangyo Shinbun, a nationwide daily newspaper in Japan.

The two subsidiaries of the Iida Sangyo that will have an equal share of the Okura's stock are Paradise Resort, which runs multiple golf courses in Japan, and Forest, an asset management company, according to the report.

The Okura Guam's parent company in Japan, the Okura Group, owns, manages or assists the marketing of 24 hotels in the world and seven hotels outside of Japan.

"The mainstream of this industry has been that a hotel company manages the hotel operation while letting other companies own the property," Takayanagi said. "The Hotel Okura Group is also moving toward the direction."

The major change under the new owner will be the revival of the two aging buildings built in 1972. In addition to the currently operating 148 rooms, renovations will bring the total number of operating rooms at Okura Guam to 366 rooms.

"We definitely have to increase the number of rooms available to compete with other hotels here," Takayanagi said. "Also, we have to have something to attract more people on this side of Tumon because this area of Tumon lacks attraction to draw more people."

The renovation will do nothing but strengthen the competitive edge of the Okura, Takayanagi said.

"The Okura group has hoisted the principle of the 'Best ACS,' which stands for best accommodation, best cuisine and best service," he said. "We have had the best cuisine and best services, but because of the aging buildings, we have been weak at the accommodation standpoint. The renovation will enable us to provide a complete package."

In the last few years, the island has observed ownership changes in major hotels:

Hilton Guam Resort & Spa was sold for about $30 million in November 2004.

The Holiday Inn Resort Guam was sold for $7.9 million in a deal confirmed in December 2004.

Most recently, the ownership of the Guam Reef Hotel was transferred to Unimat Holdings for an unspecified amount.

Amid the heating real estate market on the island, a few more hotels in Tumon are either for sale or waiting to finalize a sale.

Tokyo-based Ken Corp. from Japan, which owns the Aqua Resort Club hotel facility on Saipan, is reportedly in the process of acquiring the Pacific Islands Club Guam.

Under the new ownership, Takayanagi expressed his renewed determination to maintain the tradition of the Hotel Okura Guam that has served both tourists and the island's population since 1972.

"During the 33 years of operation, our hotel has cultivated our own corporate culture," he said. "We hope for continuous support from the local community and maintain the culture of Hotel Okura Guam."

May 18, 2005

Pacific Daily News: www.guampdn.com

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