Posted on: Wednesday, April 13, 2005

Aston Waikiki Beach buyer gets 'crown-jewel hotel'

Advertiser Staff

Nashville, Tenn.-based Gaylord Entertainment Co. has agreed to buy the Aston Waikiki Beach Hotel for $107 million.

The 716-room Aston Waikiki Beach is owned by New York-based Leucadia National Corp. but managed by Aston Hotels & Resorts, a subsidiary of Gaylord.

The hotel was acquired by Leucadia in June 2001. Aston Hotels & Resorts took over management in July 2001.

The Kalakaua Avenue hotel, formerly the Hawaiian Waikiki Beach Hotel, recently underwent a $30 million renovation. The property includes a leasehold interest in the 644-room main tower and a fee-simple interest in the 72-room mauka tower.

Gaylord said it plans to bring in a partner that will own the majority of the equity in the property and has begun negotiations with several interested parties.

"This transaction will allow us to take advantage of the reinvigoration of the Hawaiian Islands, add substantial value for our shareholders and retain the management contract for years to come," said Colin Reed, president and chief executive officer of Gaylord. "This crown-jewel hotel, located on one of the most desirable beachfronts in Hawai'i, is an important asset in the current ResortQuest portfolio."

Gaylord owns and operates Gaylord Hotels, ResortQuest — which owns Aston Hotels & Resorts in Hawai'i — and the Grand Ole Opry.

"We are excited and pleased that our parent company has agreed to purchase the property," said Kelvin Bloom, regional vice president for ResortQuest. "It demonstrates a commitment to our employees and represents an investment in and personal involvement with our local community."

Ron Watanabe, vice president of hospitality advisory services for Chaney, Brooks & Co., said the general rule of thumb for hotel buyers is that for every $1,000 of cost, there should be $1 in per-night room rates.

"I think $107 million is not unreasonable because that's less than $150 a (night) and I would think that that hotel should have rates that are higher than $150 a night on average," he said.