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.