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Hotels up for sale
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Posted on Nov 27 1998
A group of investors from Dubai has been negotiating with the management of Riviera Resort Club and Koreana Hotel in connection with the sale of these two establishments.
The businessmen already visited the Northern Marianas four times inspecting the two hotels and finalizing the agreement, according to Tony Glad, president of Glad’s Saipan, Inc., a real estate development firm.
Koreana Hotel’s selling price is $2.5 million while Riviera Resort is $15 million, said Glad. “We are still working on the deal. But we are almost certain with Koreana Hotel,” he added.
Negotiation with Riviera Resort is being made with bank officials in Seoul since the parent company Woosung Construction Group, has declared bankruptcy in Korea. “There are just so many legalities involved which slows down the process of negotiation,” said Glad.
However, An Min Ho, administrative manager of Riviera Resort, denied any knowledge about the sale saying “they are mere rumors.” The five-year old resort/hotel was built for $20 million specifically to cater to the Korean market on the island.
When the Korean economy collapsed due to Asia’s financial crisis, most of the parent companies of the Korean hotels went bankrupt. At the same time, the currency crisis forced many Koreans to stop traveling abroad which contributed in the plunge of hotel occupancy in many hotels that depend on Korean travelers.
Visitor arrivals from Korea, the second biggest market of the Northern Marianas, have continuously declined amid the deepening Asian economic crisis. This led management of some of the hotels here to convert their establishments into an apartment or staff housing for non-resident workers.
The real estate broker and financial consultant has lamented the inconsistent policy of the CNMI government in attracting foreign investors which he said has turned off a number of businessmen who have expressed interest in acquiring properties here.
This include the $100,000 security deposit requirement and the restriction in bringing in their own staff. Based on the new labor moratorium law, hotel investments worth $5 million and above are exempted from the hiring moratorium.
