By Paula Dobbyn, Anchorage Daily News
Knight Ridder/Tribune Business News
Oct. 6--The Sheraton Anchorage Hotel is being sold to MeriStar Investment Partners for an undisclosed price,
according to people familiar with the sale. The current owner, Korean Airlines, is expected to close the deal by
late next week, said Sheraton general manager Greg Champion.
The hotel will be operated by MeriStar Hotels & Resorts Inc., based in Washington, D.C., the nation's largest
independent hotel management company, said MeriStar corporate communications director Nicole Watson. According
to the company's web site, MeriStar owns more than 220 hotels and resorts.
It will continue to be called a Sheraton.
The downtown hotel on Sixth Avenue was built by Calista Corp., a regional Native corporation, in 1979 and sold
to Korean Airlines' parent company, Hanjin Corp., in 1988, Champion said.
Korean Airlines general counsel Peter Kim said the company decided to sell the hotel because it's interested in
refocusing its hotel business in larger cities, such as New York, that serve a greater number of Korean travelers.
Korean Airlines owns two hotels in Los Angeles and Hawaii, two in Asia, and is scouting hotel property in New York,
Kim added.
"We're strengthening our strong points and eliminating our weak points," Kim said from his Los Angeles
office. Korean Airlines passenger flights to Anchorage have dropped in recent years, he said, while travel from
Seoul to New York and European cities has increased.
Kim also said the Asian financial crisis forced a corporate restructuring of Korean Airlines that prompted the
decision to sell the Sheraton Anchorage. He noted that Anchorage is an attractive hotel market, but no longer for
Korean Airlines.
On Monday, the hotel's 275 employees got word that MeriStar was buying the property, which has an assessed value
of nearly $27 million. Champion said the employees weren't guaranteed they would have a job after the sale goes
through.
"But their (MeriStar's) practice has been to maintain the assets, including the human resources," said
Champion, who hopes to stay on as general manager.
Champion said MeriStar plans to make a "significant capital investment" in the Anchorage hotel and refurbish
it from top to bottom. One improvement the he has heard might happen is the installation of air-conditioning in
each of the hotel's 375 rooms. Even though there are relatively few days when air conditioning is needed in Anchorage,
Champion said many guests like the option of having climate-control. And with nearly a dozen new hotels cropping
up in Anchorage over the past two years, anything an older hotel can do to improve itself strengthens its edge,
Champion said.
Korean Airlines said it courted several interested buyers besides MeriStar. Sheraton management was aware a sale
was in the works for sometime but details weren't released until this week. Champion wasn't too surprised when
a deal was reached.
"When the right price comes along, anything's for sale," Champion said.
(c) 1999, Anchorage Daily News. Distributed by Knight Ridder/Tribune Business News.