Downturn hits Minister’s family hotel hard
A downturn in Samoa’s tourism industry has forced a senior politician’s family to put their hotel up for sale for $14.4 million tala.
The Moanalisa Hotel located at Vaitele is owned by the family of the Minister of Revenue, Tialavea Tionisio Hunt.
It is managed by his wife, Elizabeth Hunt, and their daughter, Moanalisa Hunt.
Mrs. Hunt and her daughter did not respond to requests by the Samoa Observer for comments.
However, the Minister confirmed the dire situation of the family-owned hotel when contacted by this newspaper, and explained the rationale behind his family’s decision to sell.
“I started this business with the understanding the tourism industry is thriving, ten years later sadly that is not the case,” Tialavea said.
“As soon as I became a Cabinet Minister my shares were given to my children. I sold the construction equipment to my son’s company, and my wife and daughter took over ownership of the hotel.
“We spent over $4 million on the project and this was possible through a loan from Development Bank of Samoa of $2.1 million; $1 million from Samoa Commercial Bank and the rest came from the construction company.
“And I regret going into the hotel business, it was the wrong decision. I should’ve built rental homes, at the time.”
The hotel opened for business in 2009 and was placed on the market in January this year.
It has 22 rooms, six villas, a swimming pool and a restaurant.
Despite the hotel’s location in the Samoan capital and its close proximity to the Faleolo International Airport, it struggled to attract customers.
The hotel, according to Tialavea, could only host conferences and meetings but not tourists.
“The hotel caters to different sets of clientele; we only have customers when the hotels play host for conferences and meetings, but the tourists they opt for resorts in the rural areas.”
The Government-run national airline, Samoa Airways, will have two aircraft operating mid-2019, which the Minister hopes will bring in more tourists, but he is of the view that local hoteliers are still struggling.
“I am optimistic that with the two planes we will have this year; we will get more tourists for Samoa and the remaining hoteliers but in the meantime, it’s been hard.
“Currently the airfares are quite high and tourists opt for Fiji, Tahiti or Cook Islands; but I’m certain that will change when we do have two airplanes.”
Tialavea said the last valuation of the hotel compound – which was done in 2015 – is $14.4 million.
“And that is how much we intend to sell the hotel for,” he added.
Adjacent to the Moanalisa Hotel are leased office blocks, currently occupied by the ANZ Bank, CCK and Easy Money transfer.
But even the rentals from the leased office blocks are not enough to offset the hotel’s expenses and pay off their bank loan, Tialavea added.
“Our electricity bill is up to $11,000 monthly and up to $4,000 is spent on the water bill and then the workers, we can never make the premium for the loan payment.”
In relation to the loan payments to the Development Bank of Samoa, he said they owe more than $3 million.
“Our loan was $2.1 million but due it has increased to $3 million plus,” he said, but did not indicate where the increase came from.
Asked when was the last time a payment was made, he could not recall, and referred the questions to his wife and daughter.
This newspaper visited the hotel to make an appointment for an interview, but was advised by the receptionist that Mrs. Hunt and Moanalisa were unavailable.
The Development Bank of Samoa Chief Executive Officer, Fauena Susana Laulu, has acknowledged receiving an email from this newspaper with questions on the loan.
But at the time of going to press last night, Fauena had yet to respond to advise if the bank had taken action to recover loans from local hoteliers, including the Moanalisa Hotel.
Moanalisa is not the only local hotel struggling with debt to the Development Bank, the Samoa Observer understands.
The Sheraton Samoa Aggie Grey’s Hotel on Beach Road was sold to Chinese investors after it took out a loan of $50 million from the Development Bank to help fund the rebuild after it was hit by Cyclone Evan.