STARWOOD TO END CONTRACTS WITH THREE TAHITI HOTELS

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Hotels belong to Tahiti businessman Louis Wane

PAPEETE, Tahiti (Tahitipresse, January 7, 2009) – Tahitipresse) - Starwood Hotels & Resorts has announced its management contract at three hotels in French Polynesia will come to an end at a so far unspecified date during 2009.

The three hotels, all owned by local businessman Louis Wane, are the 200-room Sheraton Hotel Tahiti Resort & Spa, the 103-bungalow Sheraton Moorea Lagoon Resort & Spa and the 120-suite/villa Bora Bora Nui Resort & Spa, which is part of Starwood's Luxury Collection.

There have been reliable but unconfirmed reports that Wane has held talks with Hilton Hotels as a potential new group to take over from the Sheraton in the management of the three hotels.

Starwood issued a news release on Dec. 30 that was posted on several Internet Web sites announcing that the hotel group and Wane had reached a "mutual agreement" for Starwood to no longer manage the three resorts. "The effective date will be during 2009."But the release from the group's White Plains, N.Y., headquarters added, "Starwood will continue to manage three other award-winning properties" in French Polynesia. They are the 90-villa St. Regis Resort Bora Bora, the 150-room Le Méridien Tahiti and the 99-bungalow Le Méridien Bora Bora.

"Starwood has operated both the Sheraton Hotel Tahiti and the Sheraton Moorea since August 2000 . . . and the Bora Bora Nui Resort & Spa since February 2002," the release noted.

Sheraton replaced the Hawaii-based international hotel group Outrigger Hotels & Resorts, which managed the Outrigger Hotel Tahiti from July 1999 until August 2000. The Outrigger management began after the former Hotel Tahiti, one of Tahiti's first and one of its most famous international hotels dating back to the early 1960s, was torn down and rebuilt as a modern resort.

Starwood is described by Forbes magazine as "a worldwide hospitality network of almost 900 full-service hotels, vacation ownership resorts and residential developments serving two markets: luxury and upscale".

On the Forbes Global 2000 for 2008 Starwood Hotels had a rank of 916 compared with a 703 ranking in 2007 among the list of 2,000 worldwide companies.

The Starwood group also includes W Hotels, Westin and Four Points by Sheraton. Sheraton Hotels and Resorts is Starwood's largest and second oldest brand, with Westin being the oldest.

In November, the Sheraton Hotel Tahiti signed a protocol agreement ending a five-day strike that forced management to transfer guests to other hotels. The strike and negotiations focused on the amount of payments for 18 hotel employees who were laid off for economic reasons.

Union officials and the hotel's management reached an agreement on the amount of separation pay for the 18 employees that was higher than what is required by law, Sheraton Hotel Tahiti General Manager Laurent Garrido.

Due to Tahiti's ongoing struggling tourism industry stemming from the global financial crisis, the hotel experienced a lower turnover and increased costs during 2008, he said.

The outlook for 2009 is pessimistic, coupled with the opening of two new hotels on the island of Tahiti that will add 220 rooms to the market, Garrido said.

That is what led to management proposing to the labor union in early September early retirements, reclassifications and the elimination of fixed-term contracts for employees.

The hotel initially wanted to reduce its staff by 32 employees, but end up accepting 18.

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