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120 employees affected at Palms Resort

By Clarissa David SAIPAN, CNMI (Saipan Tribune, August 13, 2010) - Of the 120 employees of Palms Resort Saipan, 70 have received 60-day termination notices as the hotel officially announced yesterday its plans to close down for a multi-million renovation.

David Wickline, chairman and chief executive officer of Palms Resort Saipan, confirmed the layoffs and the renovation plan in a news briefing yesterday at the hotel.

Wickline said they met with the employees who will not be part of the renovation efforts on Wednesday to inform them about the closing and renovation plans.

Services of the other 50 employees have been retained since they will be critical for the closing of the hotel and securing of the property, Wickline said.

"[It] was a painful day for us because we had to announce the closing of the hotel. With the closing of the hotel, it meant that many of our staff had to be let go," said Wickline, adding that the process was "painful" since a family environment is encouraged among the staff.

According to Wickline, the last day they would accommodate guests is on October 4.

Palms Resort legal counsel Robert Torres said the hotel will work within the limit of what it can afford with the current economic condition on island.

"[Palms Resort] couldn't do renovation and maintain operations at the same time, given the occupancy," said Torres who also attended the briefing with United Micronesian Development Association chair Joe Lifoifoi.

UMDA owns the 14-story, 313-room hotel formerly called Hotel Nikko.

Shareholders of UMDA include different governments in the region, including that of the CNMI, Palau, and the Federated States of Micronesia, with more than a thousand shareholders throughout Micronesia.

Torres said nonresident employees are entitled to at least 30 days notice about the termination of their contracts.

According to Torres, they had informed the CNMI Department of Labor and the federal Office of the Ombudsman about this.

While complying with local and federal laws about employees who will be laid off, Wickline said their human resources department is also working on ways to help these employees by going to other hotels to place some of their staff whom he described as "talented and hardworking people."

"We are doing our best to assist them in every way possible to facilitate their transfer or process their repatriation," he added.

After reviewing all options, Wickline said the UMDA board of directors decided that the "best way forward" for the future of the hotel is to close it down and embark on a new concept that will pioneer a new standard for hospitality services in the Micronesia region.

"We'll offer the kind of services that are currently not available on Saipan or in the Micronesia region so that we'll be creating a lifestyle-centered destination resort with world-class spa and wellness facilities on the one hand and a zone of entertainment and interesting activities on the other," he said.

To execute the plan, UMDA has hired a management team led by hotelier Ingo Schweder of Spatality, which is known for developing modern wellness and lifestyle-driven properties around the world such as the Ritz-Carlton and Mandarin Oriental.

Wickline told the media that current estimates for the project places it "in excess of $20 million." The renovation project would take between 18 to 24 months to complete, he added.

Once renovation is done, Palms Resort will be called the Nectar Hotel which, according to Wickline, will appeal to guests that are young at heart.

He said the Nectar Hotel would need about 200 to 250 employees once it is launched.

Torres noted that UMDA has had a history of investing in bold undertakings, including KMCV, Continental Micronesia, and the Laolao Bay Golf Resort.

"The entire history of UMDA is bold development in Micronesia. .Its history is to embark on these adventures to succeed," he added.

Wickline said showing leadership of investment despite the economic condition and uncertainties in government policies will help reshape the tourism industry in the CNMI.

"We hope it will lead the way for other improvements in other hotels on island and improvement in guest services and tourism-related services on the island," he said.

Wickline recognized the challenges they would face to accomplish their "bold plan."

If and when the hotel reopens, Wickline said, one concern would be the ability to hire the needed staff for the hotel if the ambiguity of immigration policies of both local and federal governments remains unaddressed.

Since tourism is the "lifeblood of the Commonwealth," Wickline also said that creative work should be done with the airlines to encourage more seats for the islands and promote tourism in the CNMI.

Despite the challenges, Wickline said they believe they can accomplish their bold plan with the cooperation of the government.

"If the Commonwealth is to have a brighter future, it needs to focus on promoting the tourism industry here. As part of that, we need this kind of cooperation with the government to create the kind of environment that fosters the tourism industry," he said.

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