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Dai-Ichi Hotel eases fears on closure
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Posted on Jun 09 2000
The management of Dai-ichi Hotel Saipan yesterday said its operation remains unaffected by the recent filing of Japan-based Dai-ichi Hotel Ltd. in a Tokyo district court for protection from its creditors under the Corporate Rehabilitation Law with liabilities of over $1 billion.
According to Dai-ichi Hotel Saipan advisor and spokesperson Dave M. Sablan, the filing of bankruptcy only affects those hotels in Japan.
“At present, it is enjoying an occupancy rate of 60 to 70 percent. The business has been generally good as the hotel has enjoyed good occupancy over the past year,” he said.
The hotel was also able to get a share of clients from Mandarin Air when it began the Saipan-Taipei direct service which contributed to the increase in occupancy rate of Dai-ichi.
“While we were all hit by the Asian recession with the decline in tourist arrivals, Dai-ichi’s operation will not be affected at all by the filing for protection in Japan. In other words, it is business as usual, ” said Mr. Sablan.
Dai-ichi Hotel Saipan is owned by Pacific Micronesia Corp., a subsidiary of Dai-ichi Hotel Ltd. It opened in 1989 with 250 rooms at first. An expansion took place four years after with the hotel having a total of 425 rooms.
The filing for protection of Dai-ichi made it the largest Japanese hotel bankruptcy in the history of the industry since World War II.
The company recently sought debt waivers worth $213.9 million from financial institutions, an Associated Press report said. Failure to receive the waivers led to Dai-ichi’s application for court protection.
According to Japan Times, Dai-ichi Hotel had been having financial difficulties since it undertook an expansive business policy during the bubble economy, particularly after rebuilding Dai-ichi Hotel Tokyo, its flagship in Tokyo’s Shimbashi district.
The reopening of the hotel coincided with the burst of the bubble economy and the hotel chain had since been suffering from serious financial crisis which was compounded by the ensuing recession.
While the hotel chain runs 43 hotels in Japan and three overseas, the protection will cover only seven domestic hotels, according to the Japanese newspaper. (LFR)
