Sat, May 11, 2002 - Page 17 News List

Lai Lai Sheraton will see management changeover

By Joyce Huang  /  STAFF REPORTER

The five-star Lai Lai Sheraton Hotel (來來飯店), one of Taipei's best- known downtown landmarks, will soon be in new hands.

An official at the Tourism Bureau under the Ministry of Transportation and Communications yesterday confirmed that Tsai Chen-yang (蔡辰洋), head of My Humble House Group (寒舍集團), will take over management rights of the hotel from Chang Hsiu-cheng (張秀政) of the Hone Shee Group (鴻禧集團).

"After reviewing its new management proposal and financial portfolio, the bureau will give its approval for the transfer of managerial rights to Tsai's group within the next two days," said the official, who requested anonymity.

The official added that, before long, Tsai's group will be fully authorized to run the hotel after obtaining a new business license from the economics ministry.

Ironically, Tsai's elder brother, Tsai Chen-nan (蔡辰男), both owned and managed the hotel, but was forced to sell the hotel's management to Chang in 1985 when several of his commercial interests collapsed.

Tsai Chen-yang, then vice chairman of Lai Lai Department Store, quit his post and later started an antique and restaurant business.

However, Tsai's family business group -- the Cathay Life Insurance Co (國泰人壽) -- is still the hotel's landlord and reportedly charges Chang a monthly rental of over NT$50 million.

Lai Lai is expected to officially make the hand-over announcement early next week, general manager Josef Dolp said yesterday.

But Dolp claimed no knowledge that the takeover deal will cost Tsai somewhere between NT$ 600 million to NT$700 million as the media reported.

Yesterday Dolp claimed that the hotel's daily operations will not be affected by the management change.

He also assured the hotel's 1,050 staff that there will be no layoffs and the hotel will undergo a facelift after the new management team comes in.

"Our staff already understood that the first intention of our chairman was to provide them with a future. And this will happen no matter who will be the new owner. The future is provided for in the long term," Dolp said.

Local media speculated that Chang's Hong Shee Group currently suffers from a severe cash crunch since the hotel lost more than NT$100 million in revenues last year and owed landlord Cathay Life over NT$250 million in rentals.

Shrugging off media speculation, Dolp only cited Chang as raising concern over the rising rent.

"The rent for the property is very high. It was over 30 percent of our total revenues," Dolp said, adding that worldwide average rental should range between 17 to 22 percent of revenue.

In response, Lee Chang-ken (李長庚), executive vice president of Cathay Life, yesterday insisted that the rental rate is very reasonable.

Lee said that Cathay Life looks at a stable rental income and will welcome any new owner who is competent and has a good image.

When asked if the rent will be lowered for Tsai, Lee did not give a clear answer but said a new lease may be re-signed pending on the negotiated deal between Chang and Tsai.

The current lease will end in 2005.

Claiming its over-due rental payments, Cathay Life won a lawsuit against Chang last December. Cathay Life could have claimed Hong Shee was bankrupt after winning the trial, but both has reached a settlement in mid February according to Lee.

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