Featured in this Asia Pacific Hospitality Newsletter - Week Ending 13 May 2005
Accor Brings Formule 1 into CBD
Fate of Le Meridien to be Decided Soon
Daikyo Sells Three More Assets
FKP Enters Port Douglas
Wynn Resorts Plans US$345m Expansion of Macau Casino
Sentosa to Host Forbes Global CEO Conferences from 2006
Absolute Share Price Performance, as at May 13 2005

Accor Brings Formule 1 into CBD Return to Headlines

International hotel operator Accor appears to be defying the odds by buying and developing a hotel in the already saturated Melbourne hotel market. However, the company is targeting the growing economy end of the industry with its new project, a major redevelopment of the seven-storey former Old London Hotel building in the CBD. The heritage listed building in Elizabeth Street will undergo a US$11 million refurbishment under the ownership of Tourism and Asset holdings and be leased to Accor under its budget hotel brand, Formule 1. "The only sector of the market where Melbourne requires additional rooms is in the economy sector, as there has been significant overbuilding at the top end", according to Accor's Asia Pacific managing director, Michael Issenberg. Melbourne experienced a large influx of new rooms and apartment style accommodation at the start of 2000 and as a result, occupancies and particularly room rates have been relatively flat in recent years. He also added that with the growth in low cost air carriers there has been significant increase in demand for budget and economy-priced accommodation.

Fate of Le Meridien to be Decided Soon Return to Headlines

Affiliates of Lehman Brothers and Starwood Capital Group (‘SCG’) Global LLC have entered into a non-binding letter of intent to form a joint venture which would propose to acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman Brothers). Additionally, Starwood Hotels, which has no affiliation with SCG, has entered into a non-binding agreement with the Lehman Brothers/Starwood Capital joint venture whereby Starwood Hotels would propose to acquire the Le Meridien brand and related management and franchise business from Le Meridien. Starwood Hotels would also enter into management agreements for the 36 owned and leased Le Meridien property portfolio to be acquired by Lehman Brothers and SCG with such hotels continuing to be operated under their current flags. The brand and hotel portfolio acquisition proposals will be presented to the Le Meridien board as part of an overall restructuring plan for Le Meridien. The terms of the agreements were not disclosed. London-based Le Meridien is a global hotel group with a portfolio of more than 130 luxury and upscale hotels in 56 countries worldwide. The majority of its properties are located in the world's top cities and resorts throughout Europe, the Americas, Asia Pacific, Africa and the Middle East.

Daikyo Sells Three More Assets Return to Headlines

Japanese investor Daikyo has recovered a further US$16.5 million from the sale of three smaller holdings. The last big-ticket disposals for Daikyo are its tourism assets, with negotiations being finalised for the sale of its Cairns International hotel, Green Island Resort and Great Adventure cruise business.The newly created Sunleisure vehicle is understood to be keenly pursuing the assets for about US$84 million to US$90 million. Just placed on the sales block is Daikyo's 263-room Hilton Hotel in Cairns. There is a May 26 deadline for submissions. The nine-level property, opened in 1987, incorporates 650 square metres of retail space. Hilton's management agreement runs until 2008, with the operator holding an option for a further five-year term. The Hilton was built on leasehold land expireing 2061.

FKP Enters Port Douglas Return to Headlines

FKP is making its first foray into Port Douglas after teaming up with Melbourne's Selpam Group to undertake a US$43 million upgrade and strata conversion of the Rydges Reef Resort. The project marks a shift in sentiment by FKP, which has previously avoided the North Queensland markets. Selpam bought Rydges (then known as the Radisson Reef Resort) in November 2000 from Port Douglas Reef Resorts for a reported US$14 million. Rydges sits on a 3.2 hectare site opposite Port Douglas's landmark Sheraton Mirage complex. As part of the FKP/Selpam redevelopment, US$2.3 million will be spent overhauling the 22-year old hotel's common areas, including its pool, and conference facilities.

Wynn Resorts Plans US$345m Expansion of Macau Casino Return to Headlines

Wynn Resorts Ltd added a US$345 million wing to plans for its casino in Macau, where gambling revenue is rising with the influx of international casinos. Wynn Resorts is already spending US$700 million to build the Macau casino, set to open in the third quarter of 2006. The expansion, which will almost double the casino space and add two restaurants and a theatre, will be completed in 2007. Macau gambling revenue rose 44% to US$5 billion last year and is anticipated to increase 20% over the next four years.

Sentosa to Host Forbes Global CEO Conferences from 2006 Return to Headlines
The Sentosa Leisure Group and Forbes Inc will spend almost $30 million over the next four years to position Sentosa as an attractive destination for meetings, incentives, conventions and exhibitions (MICE). Sentosa will host the Forbes Global CEO conferences over the next three years starting 2006. To sweeten the deal, conference participants will be invited to play a round of golf with golf professionals, who will be in town to compete in the Singapore Open golf tournament. That tournament, boasting US$2 million in prize money, will take place just after the conferences and be partly funded from 2005-07 with a portion of the $50 million. As part of the deal, Forbes will also host its 'Best Under A Billion' awards ceremony in Sentosa for the next four years starting this November. The first ceremony will recognise 100 of the world's fastest-growing small and medium enterprises and include a full day of golf at the Sentosa Golf Club. Darrell Metzger, chief executive of Sentosa Leisure Group, said the Group was pushing ahead to market Sentosa as a choice MICE spot, although the conference facilities in its proposed integrated resort have yet to be built. More than 300 of the world's most influential CEOs and decision makers are expected to attend the annual two-day events in Sentosa to discuss current issues and establish business networks. The conference was last held in Singapore in 2001.

Absolute Share Price Performance, as at May 13 2005
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