Leofoo Tourism Group (六福旅遊集團) said that its premier property, Westin Taipei (台北威斯汀六福皇宮), is to cease operations at the end of this year because it has failed to make positive earnings contributions for the past 20 years.
The group announced its decision on Tuesday after receiving notice from the property’s landlord, Cathay Life Insurance Co (國泰人壽), that the lease, due to expire on Dec. 31, would be terminated.
“We are grateful to all employees and customers for the past 20 years and will apply the experience and know-how we have learned to the group’s other hotel brands,” chief operating officer Lulu Chuang (莊豐如) said in a statement.
Photo: CNA
The high-end facility on Taipei’s Nanjing E Road had an occupancy rate of nearly 70 percent last year, with an average daily room rate of NT$6,387 (US$219), outperforming its local peers, Chuang said.
Despite the strong showing and assorted awards it has received, the hotel failed to make earnings contributions since its establishment in 1999, the statement said.
Westin Taipei has formed a task force to ensure the rights of customers would not be affected before the closure, it said, adding that it would continue to roll out discounts and promotions.
The group last month ended a contract to build an upscale resort hotel in Tainan.
Chuang last week said the group is seeking to restructure its finances this year in the hope of returning to profit next year.
Although Westin Taipei generated 39.74 percent, or NT$1.29 billion, of Leofoo Tourism Group’s annual revenue last year, it has been operating in the red, Chuang said.
Shuttering the lossmaking facility would not affect the company’s operations, but would free up resources for other endeavors, she said.
Apart from a slump in Taiwan’s tourism sector, the hotel has also been pressured by annual rental increases, leading to a net loss of NT$240 million last year, Chuang said.
In addition, Leofoo Tourism Group is facing NT$400 million in breach of contract penalties for its failure to meet dining revenue targets set by its landlord.
Cathay Life yesterday denied claims of rent increases.
The life insurer said that since the 20-year lease agreement with Westin Taipei was inked in 1999, the company had voluntarily cut the rent by 7.3 percent in 2004 in consideration of a SARS outbreak that year.
The rent was further reduced by 20 percent from 2009 to last year, the life insurer said.
Cathay Life said that it has committed significant resources to supply the land and build Westin Taipei, and that its leasing and profit-sharing arrangement are typical and structured to account for the risks it has taken on.
The life insurer, which is also a landlord to other hotels, said that it would renovate the 20-year-old property and seek new partnerships to improve asset utilization.
‘ABUSE OF POWER’: Lee Chun-yi allegedly used a Control Yuan vehicle to transport his dog to a pet grooming salon and take his wife to restaurants, media reports said Control Yuan Secretary-General Lee Chun-yi (李俊俋) resigned on Sunday night, admitting that he had misused a government vehicle, as reported by the media. Control Yuan Vice President Lee Hung-chun (李鴻鈞) yesterday apologized to the public over the issue. The watchdog body would follow up on similar accusations made by the Chinese Nationalist Party (KMT) and would investigate the alleged misuse of government vehicles by three other Control Yuan members: Su Li-chiung (蘇麗瓊), Lin Yu-jung (林郁容) and Wang Jung-chang (王榮璋), Lee Hung-chun said. Lee Chun-yi in a statement apologized for using a Control Yuan vehicle to transport his dog to a
BEIJING’S ‘PAWN’: ‘We, as Chinese, should never forget our roots, history, culture,’ Want Want Holdings general manager Tsai Wang-ting said at a summit in China The Mainland Affairs Council (MAC) yesterday condemned Want Want China Times Media Group (旺旺中時媒體集團) for making comments at the Cross-Strait Chinese Culture Summit that it said have damaged Taiwan’s sovereignty, adding that it would investigate if the group had colluded with China in the matter and contravened cross-strait regulations. The council issued a statement after Want Want Holdings (旺旺集團有限公司) general manager Tsai Wang-ting (蔡旺庭), the third son of the group’s founder, Tsai Eng-meng (蔡衍明), said at the summit last week that the group originated in “Chinese Taiwan,” and has developed and prospered in “the motherland.” “We, as Chinese, should never
‘A SURVIVAL QUESTION’: US officials have been urging the opposition KMT and TPP not to block defense spending, especially the special defense budget, an official said The US plans to ramp up weapons sales to Taiwan to a level exceeding US President Donald Trump’s first term as part of an effort to deter China as it intensifies military pressure on the nation, two US officials said on condition of anonymity. If US arms sales do accelerate, it could ease worries about the extent of Trump’s commitment to Taiwan. It would also add new friction to the tense US-China relationship. The officials said they expect US approvals for weapons sales to Taiwan over the next four years to surpass those in Trump’s first term, with one of them saying
INDO-PACIFIC REGION: Royal Navy ships exercise the right of freedom of navigation, including in the Taiwan Strait and South China Sea, the UK’s Tony Radakin told a summit Freedom of navigation in the Indo-Pacific region is as important as it is in the English Channel, British Chief of the Defence Staff Admiral Tony Radakin said at a summit in Singapore on Saturday. The remark came as the British Royal Navy’s flagship aircraft carrier, the HMS Prince of Wales, is on an eight-month deployment to the Indo-Pacific region as head of an international carrier strike group. “Upholding the UN Convention on the Law of the Sea, and with it, the principles of the freedom of navigation, in this part of the world matters to us just as it matters in the
RSS