PEKING — The Sheraton Corp. assumed management Monday of Peking's Great Wall Hotel--considered China's finest--and plans to expand to five more Chinese cities by 1990.
A Sheraton delegation led by company Chairman John Kapioltas formally signed a 10-year contract to manage the 1,007-room hotel, one of the largest Sino-U.S. joint ventures in China. It is Sheraton's first project in a communist country,
The 22-story hotel, with a reflecting glass facade, is considered China's premier hotel. It was opened in December, 1983, by joint owners China International Travel Service and E-S Pacific Development and Construction Co. Ltd.
E-S Pacific is itself a joint venture of two American companies--Becket Investment Corp. of Los Angeles and Pacific Corp.
At a breakfast news conference, Becket Investment Chairman MacDonald Becket denied reports that the Great Wall was having financial difficulties and had failed to fully repay the first installment of a $80-million loan from a syndicate of 14 international banks.
Asked why the owners had decided to seek outside management of the Great Wall, Becket said, "We are trying to have the very finest hotel in all China."
He said the American partners, who hold a 49% share in the project, "in 1980 discussed outside management with the Chinese side, but CITS didn't want to entertain it."
The partners then set up their own management team led by General Manager Peter B. Sun.
Sheraton will replace Sun with Joseph Roseman, former general manager of the Sheraton Tucson El Conquistador Resort in Arizona.
"CITS originally felt more comfortable in a small group," Becket said. "But when they finally saw the quality of the hotel--walked through and actually saw it, they wanted to (get outside management)."
He said at least 10 international hotel groups were considered for the job. Sheraton was selected because of its solid reputation and "strong, worldwide referral system," he said.
Kapioltas said Sheraton's second hotel in a communist country is expected to open in Sofia, Bulgaria, in 14 months.
He said it takes between $2 million and $5 million to bring a hotel into the Sheraton system but refused to reveal the terms of its management contract with the Great Wall's owners.
Ed Gremlich, Sheraton's Pacific Division director of development, said the chain hoped to assume management of five or six more hotels in China over the next five years in Xian, Shanghai, Canton and elsewhere.