The DFS board of directors gave approval at a meeting in Hong Kong on March 17 to increase the capital spending plan for the Tumon Bay Galleria flagship store from $25 million to $30 million.
Joseph F. Camacho DFS U.S. Group vice president of finance said the board also approved $2 million to begin the planning and design phase for the complete renovation of the Galleria in Garapan Saipan. Camacho said he also expects certain vendors to participate in the Guam renovation but did not want to reveal that amount.
Construction in Guam’s Galleria began in February and the renovation is scheduled to be completed in February 2006. The new appropriation will be used to renovate the Tumon building’s exterior. The capital investment is the company’s largest in its worldwide operations for 2005 Camacho said.
Construction is being done in phases so customers won’t be inconvenienced and there will be minimal disruption to traffic he said.
Camacho said DFS is receiving mixed signals about the near future of Saipan’s visitor industry. “DFS is watching what happens to the recovery of airline seat capacity into the market which will influence the level of the project.” He said travel agents blame the reduction in seat capacity into Saipan on Northwest Airlines and Japan Airlines while the airlines claim they were responding to agent forecasts. “2004 over 2003 Japanese visitors to Saipan are up 15% but airlines cut the seat capacity by 27%. What’s happening now is arrivals are falling.”
Camacho said DFS has confidence in the Guam economy largely because construction is heating up hotels are reinvesting and arrivals from Japan are increasing.
The Galleria projects follow a $5 million renovation of the DFS store at the Guam International Airport which was completed in December.
The Galleria complex opened in 1994 and was extended in 1997 to its present 120 000 square feet. DFS Guam employs about 650 people. MBJ