U.S. INVESTORS EYE TAHITI HOTELS

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French Polynesia president meets potential buyers

PAPEÉTE, Tahiti (Tahitipresse, Mar. 8, 2010) - French Polynesia President Gaston Tong Sang and Tourism Minister Steeve Hamblin recently met for a second time with a group of U.S. pension fund officials reportedly interested in buying 14 hotels in Tahiti and Her Islands.

This is believed the first time that Tahiti's government has ever become involved in trying to convince a group of potential overseas investors to buy such a large number of hotels.

Coincidentally, however, in December, Franck Falletta, the head of the tourism industry group Tahiti Nui Travel (TNT), told French language daily newspaper La Dépêche de Tahiti (LDT) he had plans for a group of foreign investors to visit Tahiti soon. He said he was already associated with the investors, who, he told the LDT, would propose buying 14 hotels in French Polynesia.

No connection has yet been made in Tahiti's media or publicly by Tahiti's government between that report and the current negotiations involving the U.S. investors and the 14 hotels.

Hamblin confirmed the report of the current talks with the potential U.S. investors Thursday to Télé Polynésie as a guest during the Radio Polynésie daily (RFO) nightly news program. He indicated that it is now up to the hotels to decide.

That confirmed a French language Les Nouvelles de Tahiti (LNDT) story Thursday that said the hoteliers had been given two weeks to reply to the U.S. investors' proposal. Hamblin also told the newspaper that the potential investors had already met with owners of the 14 hotels during a visit to Tahiti a month ago.

The tourism minister claimed that he and President Tong Sang convinced the investors that French Polynesia has a tourist potential, adding that the group of investors and the hotels have exchanged proposals.

The tourism minister described the group as important with serious people involved.

The hotels have not been named, except for the 189-room Hilton Hotel Tahiti, which was apparently added to the list of 14 hotels for sale during the second trip to Los Angeles by President Tong Sang and his tourism minister during the last weekend in Feb. The Hilton is due to close on March 31.

Hamblin told RFO and LNDT that the Hilton Hotel Tahiti was not included in the opening of negotiations a month ago with the potential U.S. investors. The Hilton closure was only announced recently.

However, after the second trip to L.A., Hamblin said the investors are going to meet with the hotel's owner, local Tahiti businessman Louis Wane. "I'm hoping for some rather positive replies," Hamblin told LNDT.

The hotel situation comes on the heels of Tahiti's worst tourism year since the 163,774 tourists who visited in 1996. The 2009 visitor volume was 160,447, a drop of 36,049 (-18.3 percent) from the 196,496 visitors in 2008, the French Polynesia Statistical Institute (ISPF) reported.

The Hilton's "comité d'entreprise", or management-labor union works council, announced the March 31 closing, blaming it on fewer clients and 2.31 billion French Pacific francs (US$27 million/€19.4m) in loses since 2005.

One union official was quoted in the local media as saying that the hotel faces losses of 38.5 million French Pacific francs (US$447,674/€322,629) so far this year despite a recapitalization.

Unaffected by the Hilton Hotel Tahiti closure are two other Hilton hotels in French Polynesia—the 106-villa Hilton Moorea Lagoon Resort & Spa and the 120-villa Hilton Bora Bora Nui Resort & Spa. South Pacific Management (SPM) manages the three hotels under a Hilton franchise agreement that took effect in January 2009.

Hamblin described the second trip to L.A. to LNDT. "For the president and myself, the purpose of our trip to Los Angeles this weekend (Feb. 27-28) was to promote (French) Polynesia among the investors to provide timely assistance to the hotel industry."

Meanwhile, Falletta also told LDT in December that he was proposing building French Polynesia's first casino and a 110-room hotel on the atoll of Tupai in the Leeward Islands along with an 80-villa hotel over the lagoon, like the overwater bungalows and villas that dot the island and motu, islets, at Bora Bora.

Bora Bora, 19 km (12 miles) south of Tupai, has 12 luxury hotels, eight of which are linked to international hotel chains. Those chains are Club Méditerranée, Four Seasons, Hilton, InterContinental, Le Méridien, Orient-Express, Sofitel and Starwood.

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