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Fiesta Resort rebrands as Crowne Plaza, gets new 40-year lease

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AFTER signing a new 40-year lease agreement with the CNMI government, Asia Pacific Hotels Inc. also inked a long-term partnership with InterContinental Hotel Group or IHG, which will take over the management of Fiesta Resort & Spa in Garapan.

IHG is a global business organization that operates world-class hotels in Australia, Asia, and the Pacific.

The 416-room hotel resort in Garapan will rebrand in 2022 as Crowne Plaza Resort Saipan, and will have additional 116 rooms by 2025.

The land and property lease agreement between Asia Pacific Hotels Inc. or APHI and the Department of Public Lands was signed on May 1, according to Tan Holdings vice president for corporate business development Alex Sablan who said that “team effort” led to a successful negotiation.

On Monday, IHG and APHI signed a long-term agreement for the management of Fiesta Resort & Spa.

Tan Holdings president and chief executive officer Jerry Tan, center, speaks as Gov. Ralph DLG Torres, right, and Department of Public Lands Secretary Marianne Concepcion-Teregeyo, left, listen during a press conference in the lobby of Fiesta Resort & Spa on Thursday. Photo by Emmanuel T. Erediano

DPL Secretary Marianne Concepcion-Teregeyo said the lease was $10,000 a year, but with business gross revenue tax, “we collect over $270,000 on average a year.” 

Under the new lease agreement, the base rent and BGRT for the property will be over $900,000 a year, she said, adding that deal includes a $3.5 million public benefit fund.

Concepcion-Teregeyo said Fiesta Resort is the first hotel that availed itself of a 40-year lease agreement as provided by Public Law 20-84.

Prior to the enactment of the law, the term for a public land lease was only 25 years with an option to extend for 15 years.

Fiesta Resort & Spa’s previous land lease was set to expire in July 2021 while Hyatt Regency Saipan’s will expire in December 2021.

As of press time Thursday, there was no new update regarding Hyatt’s proposed lease extension.

Lifetime commitment

Tan Holdings Corp. president and chief executive officer Jerry Tan said the new long-term deals with the government and IHG marked Tan Holdings’ lifetime commitment to the CNMI where THC has been in business for 38 years. Tan’s family businesses started on Guam in 1972 and expanded to the CNMI in 1982. Through those years, he said, Saipan has been his home and his own community.

Gov. Ralph DLG Torres thanked Tan, his family, and his company for their willingness to commit to the CNMI for another 40 years.

But the new lease agreement “is more than just a 40-year agreement,” he added. “This, indeed, is a lifetime commitment for all of us despite all the things that we have gone through.”

Hotel Association of the NMI president Gloria Cavanagh said the increase of lease terms to 40 years is something that the business community had been waiting for through all these years.

The signing of a 40-year lease deal with Fiesta Resort, she said, “will bring the CNMI forward as far as our economy is concerned.”

Rep. Joseph Leepan T. Guerrero said the new lease deal “is something we need in the CNMI.” He urged DPL to reach out to other hotel operators on island and encourage them to follow Fiesta Resort’s example of upgrading to world-class standards.

Tan and Sablan thanked the governor, Lt. Gov. Arnold Palacios, Secretary Concepcion-Teregeyo, DPL Real estate division director Bonnie Royal, and the Legislature for all their work that led to the signing of the new lease agreement.

Moving forward

Fiesta Resort & Spa is closed right now, but upgrading the hotel will move forward despite the Covid-19 pandemic, Tan said.

In an interview, he said they intend to make sure that everything they do is in full compliance with the government’s emergency directives.

He said there will be a lot of planning for designs and other initial activities that will not require construction activities.

“We will have to wait and see how everything plays out between now and the end of the year,” he added.

“But we are moving forward. We are not [anticipating] any delay…. IHG is taking over the hotel’s management this month. So we get to work right away in terms of the $25 million renovation….”

In a separate statement, Jennifer Tan Su, executive vice president of APHI, said: “Since we partnered with IHG in October 2019, our relationship has gone from strength to strength, and we are delighted to hand over the operations of our Fiesta Resorts in Guam and Saipan to IHG. Saipan enjoys great hotel fundamentals, stable tourism, and moderately long average stays, but has a distinct lack of great internationally branded hotels, so we knew we needed a global brand like Crowne Plaza to attract guests from around the world and bring a new level of hospitality to Saipan. We are excited for the next phase of growth for this fantastic hotel, and look forward to growing the partnership with IHG.”

Abhijay Sandilya, IHG vice president for development, Australia, Japan, and Pacific said: “We are honored to build on our relationship with Asia-Pacific Hotels Inc., as they put their trust in IHG to take on another of their great hotels, Fiesta Resort Saipan and rebrand it as a Crowne Plaza. Saipan and Micronesia more broadly, are favorite destinations of travelers from around the world, from Korea, China, and Japan in particular, and we will draw on IHG’s deep expertise in catering to guests from these markets. We look forward to growing the resort’s footprint with our world-class Crowne Plaza brand.”

November 2020 pssnewsletter

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