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Rent reductions fail; Kariyushi Urban Resort to close in Fall

Date Posted: 2008-06-26

Hotel Kariyushi Urban Resort Hotel in Naha City’s Tomarine Building will close in November, citing the loss of more than ¥3 billion and unsuccessful efforts to negotiate new rental terms with the real estate company holding the building.

Mitsui Real Estate Company, says Kariyushi president Chokei Taira, has refused to reduce the rent charged to the hotel resort, which opened in 1995. “We have been negotiating too long about rent with Mitsui Real Estate,” he says, “but their final answer was too expensive.” Taira says it’s impossible to keep negotiating while keeping employees on staff in a losing business.

Rent charged to Hotel Kariyushi Urban Resort Hotel has been ¥5.2 billion since its opening, but business has fallen off in recent years. The 238-room hotel, together with its restaurants, ballroom and spa, will be closed in November, and the 220 staff members transferred to other company properties in Onna Village.

Taira says there’s been discussion since 2005 with Naha City, one of the third sector investors, to purchase the building instead of paying rent, but those negotiations also failed. Mitsui Real Estate Company says it doesn’t know what will happen, because “we haven’t made an official contract between the third sector investors. We still have time to be concerned and figure out what to do.”

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