Bidder Hyundai has big plans for Banyan Tree
If Hyundai successfully completes the acquisition, it will expand its business portfolio into the hotel business, industry sources said.
Currently, a number of Korean conglomerates operate luxury hotels in Seoul. SK has the W Hotel, Shinsegae the Westin Chosun Hotel and Samsung the Hotel Shilla, among others.
Hyundai Group said it submitted a bid of 160 billion won ($140 million) to acquire the share on the condition that it will pay the full sum in several installments.
It is believed to have beaten out a number of conglomerates and foreign private equity fund rivals such as the Hotel Shilla and Booyoung Group.
Developer Ssangyong E&C put a 95 percent stake in the hotel up for sale on Jan. 10.
“The hotel boasts spectacular views given its prime location at the foot of Mt. Namsan, and it’s a perfect place to rejuvenate,” said a Hyundai Group official. “With the brand power of Hyundai Group, we plan to transform the venue into a super luxury hotel that represents Seoul by maximizing our managerial know-how.”
The official added that the hotel will look to optimize results from its relationship with Hyundai Asan, which previously operated the Mt. Kumgang tourism and resort business in North Korea.
Local real estate agency Urban Oasis purchased the 24,720-square-meter (6-acre) hotel site for 120 billion won back in 2007 and signed a contract with Banyan Tree Holdings, the Singapore-based luxury resort and hotel developer, to operate it for 20 years.
When it opened in June of 2010, the hotel made headlines for catering solely to the elite by selling memberships worth 130 million won each.
Despite the unique marketing approach, the luxury hotel fared poorly and suffered from a severe liquidity crunch as only 47 percent of its 3,300 hotel membership accounts were sold. The hotel last year posted a deficit of 50 billion won. Hyundai plans to save the troubled hotel by finding buyers for its unsold VIP membership accounts, it said.
By Kim Mi-ju [email@example.com]
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