Outrigger terminate agreement with West Sands, Phuket

PR Log (Press Release) – Nov 03, 2009 – The announcement came in the form of a letter sent to owners at West Sands by Paul Mercer, co-owner of the project along with Sir Terry Leahy, CEO of Tesco supermarkets; the letter stated "after many discussions with Outrigger, our proposed hotel operator, we mutually agreed to terminate the Hotel Management Agreement.  This is no reflection on Outrigger, who in our opinion are first class hoteliers, but as I am sure you are all aware, since the financial crisis last year the hotel industry has been hit badly with falling occupancy rates, and it is currently difficult to see how any new hotel can make an acceptable financial return or indeed be financed.

Consequently, we did not want to add excess capacity in terms of hotel rooms into our development, as this may add unnecessary competition to our own inventory on which our and your financial return relies. We do believe we have some excellent facilities at West Sands which will enable us to outperform the Phuket Resort market and deliver superior returns to our investors."

The letter went on to say, "On December 20th we will open the waterpark.  This is Thailand's first major themed water attraction and undoubtedly will become one of the top tourist attractions in Thailand.  We predict that 1000 customers per day will use the facility and a number of these will become buyers of property and renters of our inventory, thereby driving up occupancy and room rates.  This will have a positive effect on the rental returns and also the capital value of your and our investment.  In addition to the rides and attractions, the waterpark has good food and beverage provision, with a food court, bars and an international deli which will also be available to West Sands residents."

"I know it has been a bit of a long road for you all, particularly for our early investors, but I think we can all look forward with confidence that West Sands will be tremendously successful, and we should see the fruits of our investments very rapidly."

Outrigger have committed to two new hotels in Phuket this year, initially with the opening of Outrigger Serenity Terraces, Rawai which has reportedly high occupancy levels and Outrigger Laguna Phuket Resort and Villas, located within the five star Laguna Resort in Bang Tao Bay. This is due to open on 1st December 2009. It is unclear at this stage whether West Sands still have plans to build the high capacity hotel at the resort or if these plans will be shelved indefinitely.

West sands have a range of apartment and villa properties available for sale with prices from 9,350,000 Baht, the resort also offers owners flexible rental guarantees with returns up to 8% per annun.

(c) Copyright Phuket Ocean Villas Co. Ltd 2009

Author: Rebecca Smith, Sales Director, Phuket Ocean Villas Co. Ltd

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