Breaking Travel News

Fairmont To Realize $110 Million Gain On Kea Lani Maui

Fairmont Hotels & Resorts Inc. today announced that it has
agreed to sell The Fairmont Kea Lani Maui to Host Marriott Corporation
(“HMT”) for $355 million, or $789,000 per room. The resort will continue
to be known as The Fairmont Kea Lani Maui and will be managed by Fairmont
under the existing long-term management contract.
The transaction is expected to close in August, subject to customary
closing conditions. FHR expects to reinvest a portion of the proceeds in
additional hotels over the course of the next year. The Company also
intends to use the sale proceeds to acquire the remaining interest in the
Fairmont management company, to increase its share purchases under its
existing share repurchase program and, in the interim, to reduce existing

Maritz, Wolff & Co. recently advised FHR that it intends to exercise its
put option on the remaining 16.5% interest in the Fairmont management
company. This transaction is expected to be completed in the third
quarter, at which time FHR will own 100% of the Fairmont brand and
management company. Maritz, Wolff & Co. is a significant owner of hotel
real estate managed by Fairmont and will continue to be an important
partner in the future.

In February 2001, FHR purchased The Fairmont Kea Lani Maui and its
management contract for $250 million. Following the completion of the
sale, FHR will realize a pre-tax gain of approximately $110 million and an
after-tax gain of about $69 million.

“This is an attractive time to capitalize on our success with The Fairmont
Kea Lani Maui. In the three years that we have owned this resort, it has
enjoyed solid growth in operating performance as a result of our
experience in luxury resort management and Fairmont’s strong brand
presence in the California market,” commented William R. Fatt, Chief
Executive Officer of FHR. “Importantly, this sale indicates the underlying
value of many of Fairmont’s world-class assets. It also reinforces our
strategy of acquiring attractive assets, realizing the value created
through improved performance and then redeploying the capital to continue
growing the company.”

Continued Mr. Fatt, “We are pleased to have the opportunity to work with
such a well-respected hotel owner as HMT on such an attractive asset as
The Fairmont Kea Lani Maui.”


Christopher J. Nassetta, HMT’s President and Chief Executive Officer,
commented, “We are delighted to add this luxury resort located in the
exclusive destination of Wailea, Maui to our portfolio. We look forward to
partnering with Fairmont, North America’s largest luxury resort manager,
to further build on the exceptional reputation of The Fairmont Kea Lani
Maui.” Added Mr. Nassetta, “We hope this partnership is the first of many
opportunities to build our relationship with FHR through the future
acquisition of hotels that Fairmont could manage.”