The Marriott Guam Resort & Spa is not only in negotiation with a buyer but is preparing for a $20 million to $24 million investment to upgrade the hotel.
The Marriott became available for sale after the Republic of Nauru (Guam) Inc. was unable to meet payments on its mortgage of the hotel defaulting on loans of $16.5 million and $4.5 million by Marriott International Corp. company Guam Tac 2003-1 LLC.
As evidence of its confidence in the Guam market Marriott has sent a seasoned manager with experience in redeveloping and repositioning major Marriott properties.
Frank Liepmann arrived in Guam in July and wasted no time in surveying the hotel and moving ahead with improvements and marketing while the property awaits resolution of the sale.
There were no surprises when Liepmann came to Guam he said. “Coming here I knew up front we are talking to a buyer for the hotel. Marriott will remain as the management company.”
While Liepmann declined to be specific about the upcoming purchase he did tell the Journal that the Marriott would certainly undergo a substantial redevelopment.
“Our renovation is on the front burner — we are going to go through a major renovation — $20 million to $24 million. We’re going to change the whole face of the hotel. It’s going to be a major makeover — not just cosmetic.”
Marriott spent about $13 million on work at the property after it rebranded the former Pacific Star Hotel officially opening on April 11 2001 but Liepmann said work at the hotel would encompass all parts of the hotel which originally opened in 1987. “First public areas — first what the customer sees — the rooms to some degree — it will be top to bottom.”
The possibility of development in the gaming market might draw hotel buyers to Guam Liepmann said but that is not a factor in the Marriott sale.
“A lot of people are interested in buying hotels so that they can have the premises to open a casino. Obviously that could change the face of the whole hotel industry in Guam. Regardless of whether or not there will be gambling on the island we’ve always been in the market for a sale and we have been negotiating for quite a long time. Our owner would buy this hotel regardless of whether Proposition A goes through or not because it will complement his stable of hotels.”
Liepmann has opened a number of Marriott properties and resorts. “My specialty is opening hotels repositioning hotels and rebranding from one brand to another.” In Vietnam he rebranded the New World Hotel in Saigon in 1998 after Marriott purchased the New World group; and presided over the opening of the Renaissance Riverside hotel in Ho Chi Minh City. He said “In Busan we took over the old Hyatt which we renovated and turned into a Marriott three years ago.” In Surabya in Indonesia Liepmann oversaw the conversion of the Westin to the JW Marriott Surabaya Hotel. His wife Maria is originally from Indonesia while he is a native of Germany.
Liepmann arrived at what he said was the right time with occupancy rates exceeding anticipation. “We beat the records for July — and it was a great month — 70% was way above what we expected and August turned out to be 85% which was even better. I hope we can maintain this pace.”
Guam has experienced better numbers overall with arrival numbers in mid August reaching 1 300 945 but Liepmann said the Marriott’s performance was notable nevertheless. “We closed the gap between us and some of the other hotels.”
Marriott is a member of Guam Visitors Bureau. Liepmann said “I’ll be participating in a lot of the activities they have.” The hotel is also a member of the Guam Hotel & Restaurant Association. He said “I’m going to be actively involved. I’m not the kind of guy who wants to get on board and become the spokesman for the group. I’ve always been a treasurer or something like that and helped to hold the lose ends together.” Liepmann has also agreed to sit on the University of Guam advisory committee. I will join Rotary — I am going to be active in the local community.”
Progress at the hotel will not wait for completion of the sale Liepmann said. “In the short term regardless of the renovation plans and the big picture the small picture is we are blowing a little bit of fresh air into the place.”
Change has already breezed through the Marriott Guam management with the appointment of Tsukasa Yanagishima director of food and beverage formerly of the Gifu Renaissance in Gifu Japan. “Because we have a 50% Japanese market he’s a very welcome addition to the team ” Liepmann said. Due to arrive in October is Julian Wong director of sales and marketing from Malaysia with extensive experience in Taiwan. Liepmann said “He will help us cultivate the Chinese Taiwanese and Hong Kong markets apart from his other skills.” He has retained Miho Nishida director of sales and other key personnel at the executive level.
Liepmann is expanding the Marriott offering in a key area — food and beverage. He said “The moment I came in I realized we had only one restaurant serving dinner one restaurant serving breakfast and one restaurant serving snacks. The Marriott Café was due to open on Sept. 16 for breakfast lunch and dinner. The View will offer a more casual dine-in or take-out menu likely to appeal to the Marriott’s substantial number of military guests. Aspects of food and beverage are maintaining their excellent performance Liepmann said. “The Manhattan is doing very well — I’m expecting that to improve further.”
While the Marriott’s recreation and incentive program will eventually be broadened Liepmann is leaving that aside to deal with physical development first. He has taken an interest in the hotel’s décor and ambiance including the lobby and the pool area. “The poolside is more active and more lively.” Banquet facilities have also received attention. “A lot of sprucing up was necessary ” Liepmann said. “You’ll see a huge change. Things are happening — we’re pulling ourselves together quite well the hotel’s looking better.” MBJ