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Mandarin Oriental To Open $150 Million, Five-Star Hotel At Palmas Del Mar
BY LIDA ESTELA RUAÑO
February 14, 2002
Hong Kong-based Mandarin Oriental International Ltd. will open a five-star, 200-room hotel and 50 time-share villas in Palmas del Mar Resort & Villas in 2004 at a cost of $150 million.
If the tradition of the prestigious hotel chain is followedwith flagships The Mandarin Oriental in Hong Kong and The Oriental in Bangkokthe new hotels name could be The Mandarin Oriental Palmas.
Located on a beachfront lot adjacent to the Beach Club, the new hotel will not have a casino. Within the Palmas del Mar master plan, there is room for another hotel adjacent to this lot and there has been talk of building a large hotel there, upwards of 400 rooms.
The 50 time-share villas will be privately owned but managed by the hotel through a 10-year lease by which owners use their unit for a minimum 30 days annually. Normally, these agreements also include a 10% tax credit for the owners of the villa.
Construction of the hotel is slated to begin in fall so it is ready for the winter 2004 tourist season. According to sources, the Asian company has signed a letter of intent with the Houston-based Maxxam Inc., owners of Palmas del Mar Properties Inc. The final contract should be inked shortly.
The Mandarin Oriental International Ltd. has 21 hotels, 9,000 employees, and equity interests in all but four properties, for $900 million in net assets. There are 10 hotels in Asia, seven in North America, and four in Europe.
The Mandarin in Hong Kong was opened in 1963. In 1974, its owners bought a 42% interest in The Oriental in Bangkok. In 1987, it floated in the Hong Kong Stock Exchange as Mandarin Oriental International Ltd., with a net asset of $277 million. On December 31, 2000, the firm had a consolidated profit before interest and tax of $53 million, an increase of $11 million over the previous year. Then, in May 2000, the chain acquired five hotels in the U.S. and Europe from the Rafael Group for $200 million. A $200 million Mandarin Oriental New York is slated to open next year at the new Time Warner World headquarters in Columbus Circle, and the Mandarin Oriental Tokyo is set to open in 2006.
In a related development, the 23-room Palmas Inn hotel, which has been closed for years, and the beachfront land across from it, are under negotiations with India brewery-heir Alfonso Valdes, who is interested in turning the structure into condo units and using the lot for individual houses or clusters of villas, sources said.
This Caribbean Business article appears courtesy of Casiano Communications.