Fairmont Hotels & Resorts Inc. (“FHR”) (TSX/NYSE: FHR) today announced that it has agreed to acquire The Orchid at Mauna Lani on the Island of Hawaii from an affiliate of Colony Capital LLC. FHR`s luxury management company, Fairmont Hotels & Resorts (“Fairmont”), will operate the property, which will be officially flagged “The Fairmont Orchid, Hawaii” in December 2002.
The purchase price for the property is approximately $140 million plus closing costs and will be funded with existing credit facilities. The transaction is expected to close in December, subject to certain conditions.
“FHR has been actively seeking prudent growth in the United States to increase its luxury portfolio. This acquisition is of strategic importance to us,” commented William R. Fatt, chief executive officer of FHR. “The Fairmont brand is well positioned in the resort market, in locations with high barriers to entry, and has a strong presence on the west coast. In addition, the guest profile and product quality of The Orchid at Mauna Lani are consistent with those of the Fairmont brand. As a result, we believe it will be a strong complement to our current portfolio.”
Mr. Fatt continued, “We have the necessary capabilities to improve the performance of this property. Our strength in the luxury group market provides the potential for future revenue growth, as we capitalize on the resort`s extensive meeting space. In addition, we should benefit from both cost and customer synergies with The Fairmont Kea Lani in Maui. The Orchid at Mauna Lani has had recent guestroom and public area renovations that are consistent with the standards of the Fairmont brand. This will allow us to focus on further enhancements to improve revenues.”
The Orchid at Mauna Lani was named to Conde Nast Traveler`s 2002 Gold List alongside 21 of Fairmont`s hotels and resorts. The property was also called `one of the best golf resorts` by Conde Nast Traveler`s 2001 Top Golf Resorts readers` survey and was a 2001 Conde Nast Traveler Readers` Choice award winner.
The resort is situated on 32 beachfront acres along the semi-tropical Kohala Coast, on the Northwestern coast of Hawaii. With 538 guestrooms and suites, the resort offers a full-service spa and fitness center, 42,000 square feet of function space, three restaurants, 10 tennis courts, and is located close to two 18-hole golf courses.
FHR is one of North America`s leading owner/operators of luxury hotels and resorts. FHR`s current portfolio consists of 79 luxury and first class properties with approximately 31,000 guestrooms in Canada, the United States, Mexico, Bermuda, Barbados and the United Arab Emirates. It holds an 83.5 percent controlling interest in Fairmont, North America`s largest luxury hotel management company. Fairmont manages 39 distinctive city center and resort hotels such as The Fairmont San Francisco, The Fairmont Banff Springs, Fairmont Le Chateau Frontenac, The Fairmont Scottsdale Princess and The Plaza in New York City. FHR also holds a 100 percent interest in Delta Hotels, Canada`s largest first class hotel management company, which manages and franchises a portfolio of 39 city center and resort properties in Canada. In addition to hotel management, FHR holds real estate interests in 22 properties, two large undeveloped land blocks and an approximate 36 percent investment interest in Legacy Hotels Real Estate Investment Trust, which owns 22 properties.
Colony Capital LLC is a private, international investment firm focusing primarily on real estate-related assets and operating companies. Over the past decade, Colony has invested more than $8 billion in such assets in the United States, Europe and Asia. Colony has been an active participant in Hawaii since 1994 when it led the acquisition of the Hilton Waikaloa Hotel on the Kohala Coast. Colony is committed to Hawaii and the Big Island and continues to own Pauao Beach resorts and the W in Honolulu.