|By Boonsong Kositchotethana, Bangkok Post, Thailand|
Knight Ridder/Tribune Business News
Oct. 12, 2004 - Royal Garden Resorts (RGR), Thailand's largest hotel group in terms of revenue, has acquired the 50 percent interest in the five-star JW Marriott Phuket resort and spa previously held by the US hotel chain Marriott International as part of an aggressive growth plan.
RGR paid 479 million baht to Marriott, thus gaining 100 percent ownership in the 265-room hotel from the 50 percent it held earlier in the property in the southern island resort that cost about two billion baht to build.
Bill Heinecke, RGR's chairman and CEO, said yesterday the acquisition formed part of RGR's strategy to expand its portfolio, noting the deal did not reflect any desire by Marriott to cut back its business relationship with RGR because of conflicts or financial problems.
"It's simply that we asked them for the stake and they agreed," he said.
"This acquisition reflects RGR's continued emphasis on expansion through increasing its interest in properties in which it already holds a substantial interest," he added.
While Marriott has transferred its stake in the JW Marriott Phuket to RGR, the two parties have engaged in a discussion on a joint venture for a new property in Thailand, according to Mr Heinecke. He declined to elaborate.
But he noted that the JW Marriott Phuket transaction demonstrated RGR's commitment to both strengthening its relationship with Marriott while also offering shareholders a greater presence and participation in the fast-expanding Phuket hospitality sector.
Ed Fuller, president and managing director of international lodging for Marriott International, said that Marriott would continue to manage JW Marriott Phuket under a long-term agreement with RGR.
Meanwhile, the 50:50 partnership between RGR and Marriott International in Marriott Vacation Village Co, the time-share property located near the JW Marriott Phuket, remains intact.
Marriott Vacation Village now runs 62 units and construction is under way on another 82 units.
RGR is forecasting revenues from the JW Marriott Phuket hotel, officially opened in March 2002, of 655 million baht this year compared to 550 million baht last year.
RGR currently has a portfolio of 10 hotels and 2,075 rooms under the Marriott, Four Seasons, Anantara and Royal Garden brands in Thailand and Vietnam.
A joint venture with Marriott International has also developed the 144-room Marriott Vacation Club Time Share in Phuket.
RGR's subsidiary, The Minor Food Group, is Thailand's largest food-service operator with over 456 outlets under The Pizza Company, Swensen's, Sizzler, Dairy Queen and Burger King.
RGR shares closed yesterday on the Stock Exchange of Thailand at 2.74 baht, down four satang, in trade worth 1.2 million baht.
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