10 Jan 2019
- By Gaynor D. Daleno – For Variety
HAGÃ…TÃ‘A (The Guam Daily Post) â€” Lotte Hotel Guamâ€™s operations will continue after the buildings and land the hotel occupies were sold to a South Korean buyer.
The hotel property, which is being leased by Lotte Hotel, went for $64.3 million in a purchase recorded with the Department of Land Management on Dec. 21, 2018.
The seller, Tumon Bay Resort and Spa LLC, is represented by co-managers Norman Liao and Ronald Su.
The buyer established a Guam company, JR6 Guam Propco Inc., for the purchase. JR6 was established on Guam as a corporation one month before the purchase and listed $100 million in capital stock divided into 100 million shares. The companyâ€™s president, treasurer, secretary and director is Junsu Park, who is based in South Korea, records filed with the Department of Revenue and Taxation show.
The purchase includes one hotel building with 150 rooms, a second hotel building with 72 rooms and almost 28,000 square meters of land, including prime beachfront views.
Lotte Hotel Guamâ€™s management intends to continue operating the hotel under the new owner, the hotelâ€™s management stated Monday.
Formerly called the Aurora Resort and Spa, the hotel building underwent renovations in 2013 and reopened under the Lotte Hotel brand and management.
South Korean investors
The latest acquisition represents a growing investment portfolio from South Korean investors, which mirrors Guamâ€™s changing tourism market.
In 2016, LeoPalace Guam Corp., a subsidiary of Japan-based LeoPalace 21, sold the 432-room Westin Resort Guam for $125 million.
The Westin Resort Guamâ€™s buyers were Pioneer Holdings Corp., a real estate private equity fund managed by Seoul-based IGIS Asset Management; and Haevichi Hospitality Guam, a subsidiary of Seoul-based Haevichi Hotels & Resorts, a unit of Hyundai Motor Group.
The entry of major South Korean hotel investors followed the dramatic change in Guamâ€™s visitor market.
For decades, Japanese tourists made up 60 to 80 percent of Guamâ€™s tourist arrivals.
The change to predominantly South Korean tourists in Guamâ€™s visitor industry became apparent at the end of fiscal year 2018. That budget year, Japan tourist arrivals made up just 33 percent of the market â€” just half of what it once was for Guam â€” while South Korea arrivals became the majority market with 49 percent of Guamâ€™s overall visitor arrivals.
The Guam Visitors Bureau last year began a campaign to subsidize certain charter flights out of Japan to try to stem the loss in visitor arrivals.
In June, GVB announced Jeju Air would offer flights between Osaka, Japan, and Guam beginning in late July, subsidized in part by GVB for $250,000.
In light of reduced tourist arrivals from Japan, GVB officials told senators last year they wanted to increase the budget for subsidizing charter flights from Japan, from $1 million to $2 million this budget year.
Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/109912-lotte-hotel-guam-sold-to-south-korean-investor-for-64-million