Susan Gordon, Business Reporter
New general manager of the Holiday Inn Sunspree Resort Louis Philippe (right) and former manager Michael Hoe-Knudsen in conversation with Pauline Reid, president of the Montego Bay Chamber of Commerce, during a cocktail reception at the hotel in Montego Bay in July. - File
Hospitality Proper-ties Trust (HPT), a real estate investment trust based in New York, has backed away from a deal to buy Holiday Inn Sunspree Resort Montego Bay from for which it had been prepared to pay US$30 million ($1.98 billion).
At that price, HPT would have paid US$57,252 per room for the 524-room sprawling seaside property located in Rose Hall along the same hotel corridor as Half Moon and Ritz Carlton.
The Holiday Inn Sunspree brand is owned by Six Continents Hotels and marketed under the American company's trade name Inter-Continental Hotels Group.
Cagey
HPT was cagey on its reasons for cancelling the purchase, which up to April was still expected to go ahead according to disclosures made by HPT that the deal was to be closed later this year.
But even then, there were indications that the acquisition might have hit a snag.
"In fact, circumstances may delay this purchase for an extended period or prevent it occurring," a Business Wire release said, based on a press release issued by HPT.
Other reports referred to 'third party' concerns, but gave no details.
Wednesday Business was unable to confirm with either company whether the Montego Bay hotel's current court case against a ruling of the Industrial Disputes Tribunal (IDT) to be heard this month in the Judicial Review Court was among the sticking points.
"HPT is no longer pursuing the interest," said a woman from the office of HPT president John Murray, who identified herself as his assistant, Hervianne Paul, in response to Wednesday Business queries last Thursday regarding the delay in finalising the acquisition.
The investment company, however, appeared to be concerned about jurisdictional issues, noting it as a concern in April that it may not legally be able to transfer support payments between its properties in other countries.
"For this reason, HPT cannot assure investors that its combination requirements will be respected in all circumstances," said the Business Wire release.
General Manager for Holiday Inn Sunspree, Louis Phillippe, told Wednesday Business on Monday he had not known the property was up for sale.
"I have no knowledge of it," he said.
In April of this year, HPT announced that its acquisition of the hotel would close later this year, after which it would lease it back to a subsidiary of IHG, an arrangement that be subject to cross guarantees and renewal options.
Real estate
HPT owns several hotels worldwide, but as an investment company does not manage the properties. Its strategy is to acquire real estate and then lease the businesses to larger unaffiliated hotel management companies.
HPT purchased eight additional Intercontinental branded hotels earlier this year as a part of a 10-hotel agreement. It plans to have an initial 25 year lease on the hotels, plus two consecutive renewal options and to pump an additional US$7.1 million into the properties for capital improvements within a closing period of three years.
Holiday Inn Montego Bay Jamaica would have added to the count.
HPT itself owns more than 300 hotels worldwide, which it enters into agreements with hotel groups like IHG, Marriott and others to manage.
Holiday Inn Sunspree has operated in Jamaica for 30 years and employs approximately 450 persons.
The hotel is operated strictly under the administrative directives of the overseas owners.
At present the hotel is seeking an order from the Judicial Review Court to quash an award of the IDT made last year giving workers entitlement to vote for union representation, which would have paved the way for the National Workers Union to conduct the bargaining rights poll.
A ruling is due September 20.
HPT owns 310 hotels across the United States, Ontario, Canada and Puerto Rico.
