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US hotel groups battle to buy Princess chain

Two massive US hotel chains have joined the multi-million dollar battle to buy the Princess hotel chain.

For Marriott -- which already operates the Castle Harbour Resort -- and the Hilton Corporation have taken on Saudi Prince Al-Waleed bin Talal for control of the group, which includes the Hamilton and Southampton Princesses among its ten hotels.

Yesterday, a spokesman for UK conglomerate Lonrho, which currently owns the group, confirmed two US groups had entered the race -- but refused to identify them.

But he denied reports in an English newspaper that talks with the Saudi prince had broken down.

He said: "There are three separate parties involved in negotiations -- we have merely withdrawn Prince Al-Waleed's exclusivity.'' And he added that negotiations over the sale with the three potential buyers were continuing.

Prince Al-Waleed, who has the biggest stake in the Fairmont hotel group, was initially front-runner to take over six of the ten Princess hotels, including the two Bermuda Princesses.

A potential problem with the Saudi bid stems from a religious ban on gambling -- Prince Al-Waleed is not interested in the Barbados or Bahamas hotels, which both have casinos.

But the UK financial press predicted last year that Lonrho would be unable to sell the Princess hotels -- which are scattered across the US, the Caribbean, Mexico, as well as Bermuda -- as a block and would consider a split sale.

Marriott's Castle Harbour resort has had its difficulties with its leased property, which has lost millions of dollars over the years.

The group has already ditched a loss-making operation in Barbados and might be wary of further involvement.

But last year was trumpeted as the best year to date for Marriott in Bermuda and the firm might consider expanding into already-established properties in Bermuda.

And Hilton Corp. is in a bullish mood and has cash to spend, having failed to win a recent bid for the Sheraton hotel group.

No-one from Marriott Corp. or Hilton Corp. could be contacted for comment yesterday.

But Tourism Minister David Dodwell said -- if the bids are serious -- it was good news for Bermuda.

He added: "In principle, it's good to have foreign investors looking at our major hotels. It suggests confidence in Bermuda and where Bermuda is going now.'' An East End hotel may have been looted while lying dormant, it emerged yesterday. A Police spokesman told The Royal Gazette : "Police have come into possession of some property, some of which is believed to have come from the Club Med hotel.

"Two men are being questioned in connection with the discovery of this property.'' The doors to the former Club Med hotel were shut in 1988 and it has remained closed since.

Initially there were 17 employees on the site who were paid by Club Med International. The last 11 were laid off on October 30 when the organisation handed over its lease.

The Ministry of Works and Engineering assumed responsibility for security and maintenance at the site while the Tourism Department took charge of the process to find a new tenant.

Just recently, Tourism Minister David Dodwell announced that the Atlanta-based Camberley Hotel Company wanted to take over the site, renovate it and reopen it. See Page 2