Castle Group revenues, net grow

The resort-management firm sees lower demand here, but strength in Asia

The Honolulu-based holding company of Castle Resorts & Hotels reported solid revenue growth during the first quarter, but said its aggressive expansion into the Pacific Rim scaled back some of its net income gains.

First-quarter net
$99,658

Year-earlier net
$19,702

Castle Group Inc. reported yesterday that its revenues grew 21 percent to $6 million as compared to $5 million during the first quarter of last year. The company's first-quarter net income also increased to $99,658 from $19,702 in the year-earlier period.

The company said it is seeing reduced demand at its Hawaii properties, and is hoping its expansion into Micronesia, New Zealand, Thailand, and Vietnam will offset the trend.

FULL STORY »

By Allison Schaefers
aschaefers@starbulletin.com

The Honolulu-based holding company of Castle Resorts & Hotels posted a strong first quarter with gains in both revenue and net income.

However, the company, citing slackening demand at its Hawaii properties, said it continues to plow much of its revenue gains into its growth strategy in Asia.

Castle said its revenues grew 21 percent to $6 million, versus $5 million during the first quarter of last year. First-quarter net income increased to $99,658 from $19,702 in the year-earlier period. The company lost $1.1 million on revenues of $21 million last year.

Meanwhile, overall sales at properties that Castle manages increased to $23.5 million, compared to $12.5 million in the first quarter of 2007.

The company's revenue gain reflected new contracts gained, an increase in rates and occupancy and the strength of the New Zealand dollar, said Alan Mattson, president and chief operational officer of Castle Group Inc.

"While revenues grew handsomely year over year, not all of this increase was translated into net income because of our decision to increase our investment in international expansion and development into Thailand and Vietnam," said Rick Wall, chairman and chief executive officer of Castle Group.

But Mattson noted that the company expects further challenges in the Hawaii market.

"We have recently observed a change in demand for hotel rooms at properties on all Hawaiian islands. This is primarily due to three factors: overall economic conditions, the loss of two significant airlines with their lift into Hawaii and increased airfares on the part of the other carriers," Mattson said. "On the other hand, our expansion into Micronesia, New Zealand, Thailand, and Vietnam should tend to offset the impact of this trend for our company."

The company currently manages approximately 26 properties, totaling more than 3,200 hotel and condominium units in Hawaii, Saipan, Guam, Micronesia, Thailand and New Zealand.