Historic High-End Hotels Sold to US Firm

The Raffles Hotel Le Royal in Phnom Penh and Grand Hotel d’Angkor in Siem Reap have been sold to US firm Colony Ca­pital, Raf­fles and Colony an­nounced Monday

Singapore-based Raffles Hold­ings has agreed to sell all 15 of its Raffles hotels and 26 Swissotel ho­tels for about $1 billion to Colony Capital, Colony said in a state­ment released to Reuters news agency.

Hotel Le Royal Duty Manager Pi Sok Mony confirmed the move Monday, adding that both the Cam­­bodian hotels are five star.

“I just received information to­day that our owner is no longer Capi­talLand, that it is now an Amer­ican company, Colony Ca­pital,” he said. “This will affect all Raf­fles Hotels, so the Grand Ho­tel d’Angkor is included.”

CapitalLand is the majority stake­holder in Raffles Holdings and has agreed to the sale of the ho­tels, according to Raffles.

“We are honored to become the custodian of one of the finest ho­tel chains in the world and a true national treasure to the people of Singapore,” Colony Chair­man Thomas Barrack said in the state­ment.

Colony Capital, based in Los An­geles, owns hotels in the US gambling hotspots of Las Vegas and Atlantic City. It owns the Sa­voy hotel in London, England, the Stan­hope in New York and a re­sort in Sardinia, Italy.

Raffles Holdings Chairman Cheng Wai Keung told Reuters Monday that selling the entire business was necessary because expanding it would re­quire capital it did not wish to raise. The real estate value of its hotels is high, he added.

Cambodian Hotel Association President Chris Ho said Monday that Colony Capital was likely making a sound investment in some of Cambodia’s premier ho­tels.

“If I had the money I would buy Raffles,” he said. “They set a high standard.”

Tourism Minister Lay Prohas said Monday that Raffles has taken good care of its two historic Cambodian properties.

“The hotels have been the flag carriers for five star hotels in Cam­­bodia,” he said.

“They have shown the world that Cambodia can have five star hotels.”

Lay Prohas added that the government welcomes newcomer Co­lony Capital to the Cambodian ho­tel business.

Colony said it will pay $859 million for the hotel chains and as­sum­ed $118 million in debt, a com­­bined total of just under $1 bil­lion.

“We have been told that this will allow more capital to be spent on maintaining and im­prov­ing the hotels,” Pi Sok Mony said.

Raffles acquired the dilapidated Royal Hotel, founded in 1929, and 75-year-old Grand Hotel from the Cambodian government in 1994.

The hotels, which were some of Cambodia’s finest prior to the Khmer Rouge era, had fallen into ser­ious disrepair. Multi-million res­torations were completed in 1997.

In 2004, Raffles engaged in a pro­tracted labor dispute with its ho­tel workers union over the dis­tri­bution of service charges. In June 2004, the Arbitration Coun­cil blasted Raffles for holding false worker elections and ordering em­ployees to sign documents re­linquishing the right to strike.

The council ordered Raffles to re­hire fired union members, which the chain eventually did.

 

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