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Castle Resorts
cutting ties with
Inn on the Park

Its withdrawal as hotel
manager affects 25 employees

Star-Bulletin staff

Castle Resorts & Hotels said it will not renew its contract that ends July 22 to manage 57 luxury studio apartments and hotel rooms at the 238-room Inn on the Park.

Castle officials did not give a reason for leaving the Waikiki high-rise across the street from Fort DeRussy on Ala Moana.

In a recent letter to the company's 25 employees at the Inn, Senior Vice President Steve Townsend said Castle would try to place all workers in other jobs at the property, but he noted some could be terminated. "Unfortunately, in business, situations like this happen on occasion, regardless of the best efforts of the staff," Townsend's letter said.

Maruko Hawaii Inc., a subsidiary of a Tokyo-based real estate company, owns most of the Inn's units and has not announced Castle's successor.

Castle's Honolulu-based parent, Castle Group Inc., assumed management of the 57 Inn rooms in 1996 from Aston Hotels & Resorts. The Inn's remaining 181 rooms are self-managed condominiums, Castle spokeswoman Caroline Witherspoon said yesterday.

Castle Group manages and markets a total of 2,622 rooms at 16 properties statewide, from $40-a-night budget inns to $1,000 condo resort hotels.

The company does not plan to pull out of other local properties, Witherspoon said. Castle wants to expand in Hawaii and the Pacific. The company already manages a luxury condo in Saipan, a hotel in Chuuk and a five-star hotel in Guam. It also plans to open a New Zealand condo and hotel property in May.

Castle's thinly traded over-the-counter stock price was unchanged today at its 52-week low of $1.03 per share.

Castle's revenues from its management fees fell almost 18 percent to $1.42 million for the six months ending Jan. 31, down from $1.73 million during the same period in 1999. The company's net loss during the same time almost quadrupled to $803,000 by Jan. 31, 2000 from $208,000 in 1999.

Castle blamed the loss of two unidentified managed properties, the renegotiation of two other contracts, slower-than-expected tourism during New Year's and opening expenses for the property in Guam.