1999 was a year for adjustment. The Asian economic crisis hit the bottom whilst the North American economy maintained its strength. As a hotel operator, Pan Pacific Hotels and Resorts had a tough but fruitful one-year in 1999.

At the recent General Managers and World-wide Sales meeting held in Yokohama, I asked all the participants to bring the three points in my opening message back to share with all of our associates. As we head towards the 21^st century, the year 2000 must be a foundation year. We must set the framework and work by trial and error as preparation for start of the 21^st century on January 1, 2001.

My first point is to create a Pan Pacific Hotels and Resorts brand image. By the year 2010, what kind of hotel chain do we want to create? I requested everyone to think of a brand image that revolves around people and intangible things rather than buildings and structures.

Secondly, we must create a consistent culture and mindset: a sales culture, revenue management culture and Absolute Care culture. We must involve every associate in our company in this process of creating, implementing and practising this culture.

Thirdly, we must create a Pan Pacific management system, a common synergy within our organisation, in all our hotels, resorts and offices. For example, the corporate team has established the Pan Pacific Absolute Care core standards. The Operations divisional standards have been sent to all hotels and the other core businesses will also send their respective standards to all hotels when completed.

I expect each hotel to take the initiative to digest the core standard and apply them to your own local hotel culture, with the corporate team assistance. Each hotel is responsible for educating and training all your associates followed by implementation of these standards within your properties. The corporate team will take the responsibility of auditing the progress of the implementation and provide assistance and guidance wherever needed. The same process should be taken with the other core business standards when they are received as well.

Our long-term goal is to be known as a speedy, flexible, creative and focussed company. As a small hotel chain, to compete with the large companies out there, we must focus our strengths and energies on key hub or capital cities. In view of this goal, often we have to review our portfolio of hotels and assess those that do not fit into this long-term goal and at the same time prove to be unproductive. In cases where deemed necessary, we have to terminate our management contracts with such hotels, for example our withdrawal from the hotels in Malacca and Kota Kinabalu, both in Malaysia. This re-alignment is necessary if we want to achieve the goals we have set for ourselves.

We gave away the following awards to the deserving hotels or individuals at the recent General Manager & World-wide Sales meeting in Yokohama:

1. Hotel of the Year : THE PAN PACIFIC BANGKOK

For achieving 85% associate satisfaction, 85% customer satisfaction, profit satisfaction and anticipation ROI, owner satisfaction by strengthening its business relationship and provides support to sister hotels.

2. Commitment to People and Team - Associate Care :

THE PAN PACIFIC SONARGAON DHAKA

For creating a preferred work environment, recognising associates achievement, providing

professional growth, education and development for associates, demonstrating caring and fair

labour practises and achieves a 75% associate participation in the associate satisfaction

survey.

3. Commitment to Business Excellence - Customer Care :

THE PAN PACIFIC SAN FRANCISCO

For executing seamless service delivery by effectively utilising Service One, demonstrating

a warm and caring sense of arrival, providing a competitive value for money, achieving

overall market recognition for service excellence and actualises a consistent 10% customer

feedback participation.

4. Commitment to Community Care - Corporate Citizen :

THE SARI PAN PACIFIC JAKARTA

For creating a caring programme that added value and enhance integrity to the community,

participates in community programmes that embraces local culture and heritage, provides

educational "hospitality" learning opportunities for its you citizens, actively engaging

associates to participate in hotel sponsored events and is recognised within the community

as a role model corporate citizen.

5. Commitment to Owner Care - Financial Excellence :

THE PAN PACIFIC LODGE WHISTLER

For upholding general accepted accounting principles and consistently achieves good audit

ratings, achieves or exceeds 100% of its competitive set's REVPAR, achieves or exceeds

budgeted revenue and GOP targets, demonstrates growth in REVPAR over prior years and

is a role model in demonstrating productivity improvement as measured by increase in GOP.

6. Preferred Atmosphere - The Pan Pacific Way :

THE PAN PACIFIC HOTEL KUALA LUMPUR

For working jointly with the corporate team to tackle the challenge of a gross operating loss

Experienced starting in January 1999 and turning the hotel around and showing significant

improvement in the results in the last 6 months of 1999.

7. Preferred Atmosphere - Quantum Change :

THE PAN PACIFIC HOTEL YOKOHAMA

For making a major mindset shift within the team and creating a unified culture and a sense

of excitement within the hotel team in order to effect a shift of the way of doing business to

achieve a major improvement of business.

8. Business Development - Creative Innovation :

PAUL ER, Malaysian Business Development Unit & The Pan Pacific Resort Pangkor Island

Awarded to Paul and his team who have developed a strategic plan to move the business

forward in a significant way.

9. Regional Sales Offices - Cost of Sales , Individual :

MARGARET KOH, Singapore RSO

Determined by the individual's percentage of expense to revenue generated.

10. Regional Sales Offices - Cost of Sales, Team :

SINGAPORE RSO

Determined for the RSO team by dividing the ratio of expense percentage by the number of

Sales Managers.

11. Regional Sales Offices - Revenue, Individual :

MARIA DEMPSEY, San Francisco RSO

For generating the highest individual revenue.

12. Regional Sales Officer - Revenue, Team :

Determined for the RSO Sales team by diving the total RSO revenue by the number of Sales

Manager

We are very proud of our resort in Whistler being selected as the Number 1 ski resort in North America in Conde Nast Traveler 1999 Readers' Poll. The Pan Pacific Lodge Whistler was listed in the following categories:

• Overall ski resorts and ski areas : First with 89.4 points
• Accommodations : First with a maximum 100.0 points
• Service: First at 95.8 points. "Every staffer does everything here, from bag carrying on up, so things get personal at this new boutique hotel."
• Food : second at 91.7 points

WELL DONE TEAM and keep it up.

Thank you.

Glenmarie -- Front Office associates and outlet managers are encouraged to wear Traditional costumes on Fridays, e.g. Baju Melayu for men, Baju Kurung, Kebarung or Kebaya for women, Cheongsam for Chinese women or Sari for Indian women. . . All managers and assistant managers attended the Educate the Leader Programme. Lessons included Designing & Developing Training Programs, Writing Objectives, One-to one Instruction and Methods of Evaluation.

Bangkok -- The "Roles of Supervisor" session was attended by 13 departmental trainers from various departments. . . The Associates Satisfaction Survey was conducted for all associates. . .A cocktail function was organised to recognise associates who completed 5 years service. They received a 5-year service pin and a small token from the GM.

KL -- Associates and Managers attended the Diploma in Hotel Management – Tourism Studies. . . Other sessions included Team Leader in Action 2; Orientation - Day 1 & 2 (Malaysia Host) for new associates; First Aid, CPR & Rules and Regulations on Occupational Safety and Health for Committee members; Department Heads and Managers participated in a brainstorm session for ideas in the areas of Customer Acquisition, Customer Retention & Care, Associates’ Care, Community and Environment Care for year 2000 and Train the Trainer.

Dhaka -- Training sessions included Fire Fighting and Safety Procedure; Medicare; English Center of Career Development Institute (CDI) Internal School; Third Semester of CDI Internal School; Re-orientation – Agenda 2000; Classes for adopted children; English Core Program. . . An Associates Satisfaction Survey 1999 was held for all associates. A "Communication Fair" was held at Associates’ Cafeteria ‘Shapla’ to build awareness and understanding of the survey-theme and to give guidelines for completion of the questionnaire. An election style procedure was followed for polling. The GM & Steering Committee members were observers to ensure privacy, anonymity and impartiality of the survey results. . . A General Staff Meeting and Barnali Star Program was held in two sessions. GM, Hans Winsnes, shared with all associates and management, information and experience from the recent ‘GM & Worldwide Sales Conference’ which was held in Yokohama, Japan. . . Mr. Atique Rahman, (Director Operations), made a brief Budget Presentation. The MIS Manager gave a briefing on the New Computer System and PR announced Shades Design Contest results. Awards were also presented for Best Associate, Computer Certificates and a Birthday Lottery Prize followed by a birthday celebration.

San Francisco -- Concierge Scott McIntosh was elected president of the Northern California Concierge Association. Scott has been a concierge for nearly three years. He set up and ran the original concierge desk at the USGA Open Tournament. Scott practices our company’s values too—last year he raised $20,000 for Habitat for Humanity and is currently working to complete a four-family home in Monterey. . . In "The Constant Concierge" November issue of Lodging Magazine, Chief Concierge, Mark Belhumeur who also helped PPH Yokohama with its opening, was the principal professional interviewed and is widely quoted in this three-page spread. . . The annual Children’s Christmas party was staged in the Pacific Ballroom for 190 happy children and their 205 chaperoning adults!

KLIA -- The One Care Committee organised an inter-department Christmas and Hari Raya Decorations Contest . The participating departments were judged based on environment sensitivity - cleanliness, heritage as well as teamwork. The theme was `The Christmas & Hari Raya Millennium Celebration". Housekeeping emerged as winner while Purchasing and Chef’s Office took 2nd and 3rd place respectively. The winner received a challenge trophy and a hamper worth RM80.00. The judges are from our sister properties, Encik Mustaffa Yusuf, Azua Jalil and Mei Mei from The Pan Pacific Glenmarie and Wilson Lum and Fadzli Adnan from Pan Pacific Kuala Lumpur. . . A "Buka Puasa" (Break Fast) event together with the staffs was held on the second day of Ramadhan. Lloyd Daser and steering committee members joined the Muslims and break fast at the hotel cafeteria.

Pangkor -- Hindu Associates organised a "Deepavali Night" at the Pacific Ballroom where all associates were invited to join the celebration and have a taste of Indian Cuisine. . . The Associates Sports Club Meeting was recently held to elect the New Committee for the year 2000. . . All Senior Managers went to Pangkor Laut for a Management Retreat.

Palau -- Congratulations to Associate of the Month for November, Wilmor Maala (Landscaper/Designer). . .The annual Christmas party was held at the Peleliu Club, a local club overlooking the crystal waters of Palau. The theme of the party was "White Christmas", in a place where snow is impossible. The associates were welcomed with egg nog with rum. They were entertained with a live band, treated sumptuous dinner that was served by management team, raffle prizes and other awards were given out. . .Following associates were also recognised for their 10 years service with the company: Joyleen Tmatk, Pablo Haruo, Mihaine Kodep, Perfecto Moscoso, Roselyn Solang, Amelia Olebuu, Katherine Brel, Cathleen Meyar, Eric Matul, Lorena Reksid, Francis Fukuichi and Grescencio Ngircheungel. 15 years (pioneer employees): Lucy Sugiyama, Christina Oruetamor, Omekatel Remoket, Gilbert Ngiraklang, Richard Ngirngerak, Grace Ngirmechaet and Valeria Mereb; Supervisor of the year, 1999: Loraine Kloulubak, HR Supervisor Associate of the year, 1999: James Wagthuth, Gardener. . . 6 members of the management team completed a 7-day computer training for Windows and Basic Microsoft Word conducted by EDP Manager, Noel Raquid. . . 13 associates from the FB department attended a 9-day training on ILP FB-English at the Training Centre. They completed the first book which comprise the first 12 lessons. . . 5-day Orientation course was conducted during the first week of December for 13 new associates. . . 33 associates, including 9 managers and EXCO, volunteered for a special event organised by the Green Committee.

Vancouver -- Geoff Bartlett (Director of Management Information Systems) has been promoted to the position of Director of Finance & Technology, an expanded scope of the Controller's position.

Pangkor -- The New Chief Accountant is Ms Koh Lee Hui. Ms Koh was the Account Executive for a construction firm prior to joining the resort. . . The new Banquet & Hornbill Restaurant Manager Mr Sivalingam a/l Thanigasalam. Mr Siva was Operation Manager of Rooms Stay Service Melaka before joining us.

San Francisco -- John Chavez is the new Director of Security, replacing Dave Toschi who retired last month. John is a graduate of the Policy Academy and holds certification from Merritt College in Administration of Justice and related courses from Diablo Valley College and Chabot College. He has worked as a police officer, a store detective, and investigator/supervisor for several security firms. In addition, he is a firearms, survival shooting and martial arts instructor.

KLIA -- Eleiyati Shamsudin has been promoted from Manager, Administration to Manager, People Innovation. . . Encik Khalid Mat Din has been appointed as Director of Education.

Whistler -- The resort was named the number 1 ski resort in North America by the readers of the Conde Nast Traveler magazine's fourth annual readers ski poll. It was described as "This is where God comes to go skiing-high and gabled like a castle but as intimate as a boutique hotel." CONGGRATULATIONS team!

San Francisco -- November upsells totalled an amazing $23,852. AGAIN, Myra Howay lead the team, this time with 143 translating to 7,835 directly to the bottom line! Manuela Kavanagh came in next with $4,045. . . Celebrity guests during this period included the musical group, N’Sync; the Seattle Supersonics, professional basketball team; singer/performer Morrissey.

Dhaka -- Functions and events held at the hotel included the Annual Gala Dinner of Emirates; Annual General Meeting of City Bank ; International College of Surgeon’s Conference; National Day of United Arab Emirates cocktail reception; Saudi Deputy Foreign Minister, Ismail Bin Ibrahim Al-Shoura stayed at the hotel during his official visit to the country.

KLIA -- Ambassador of Peru (Javier Gonzales) with 4 congressman and 1 consultant recently stayed at the hotel. . . The second Department Of Civil Aviation Millennium Golf Tournament was held recently where Hotel Manager, Muhammad Halim Merican walked away with 2 prizes for Longest Drive – 415 yard and Nearest To Line – 8 feet 3 inches. . . TV3 conducted a live telecast from the hotel on Christmas Day for the "Malaysia Hari Ini" program. 21 children from an orphanage home were invited to participate in the program where The General Manager, Hotel Manager and Chef’s were interviewed.

Vancouver -- Two team members, Dean Pimenta from the Kitchen and Jeff Klaver from Banquets observed and caught a robber in the action of stealing a woman's purse.  They chased him and were able to retrieve the purse. . . Movie Actors Michael Caine, Mickey Rourke and Miranda Richardson stayed while filming the Sylvester Stallone movie being shot in Vancouver. Tim Robbins was also a guest while filming the movie "Mission to Mars".

Mauna Lani -- The hotel has been ranked number 6^th in the top 25 Pacific Rim Resorts in the 1999 Conde Nast Traveler's Choice Awards. . . The Second Annual Executive Cup was held in early November with over 75 club champions competing in the prestigious event.

# # # # # # #

It's not whether you win or lose - it's how you place the blame.

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I cannot give you a formula for success, but I can give you the formula for failure: try to please evrybody.

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Buy low, sell high, collect early, pay late.

KL -- All associates were invited to a special lunch and entertainment to celebrate Deepavali.Department Heads and associates took part in a hilarious sari tying competition. . . To show appreciation to associates for their contribution to the hotel winning the "Preferred Atmosphere Pan Pacific Way" Award, associates were treated to a sumptuous dinner. As it was Ramadhan (fasting month for Muslims), this was held in conjunction with break fast for Muslims. A simply ceremony to unveil the award was held. Department Heads entertained all associates with a song, "Kasih" meaning Love.

Dhaka -- The hotel arranged a Shades Design Contest among all associates of the hotel. An Associate Session was organised by the Public Relations Department to share the Shades Branding Campaign and also to invite everyone to participate in the contest. 93 enthusiastic participants competed in the Shades Design Contest. Four best individual designs were awarded with four attractive prizes at the monthly staff party. The Security Department was declared as the best department for their active participation. . . To focus the rich cultural heritage and handicraft of Bangladesh, the hotel introduced a new theme of Ladies Uniforms. Pure Rajshahi Silk Handloom Sarees, in three gorgeous colours, have been selected. The new uniforms can be seen in at all F & B outlets, Reception, Lobby and heart of the house.

Pangkor -- People Innovation conducted an "Associate Satisfaction Survey" at Angsana 2 (Conference Room). People Innovation Personnel was present to help Associates who had trouble in understanding the questions. The results were submitted to Corporate e.g. 83.4% of the Team are happy and content, yet various areas need improvement.

Vancouver -- All associates were rewarded with a complimentary luncheon in the Portside Café as the hotel had set a record of 60 days with no time loss accidents.

Vancouver -- The entire Sales & Catering Teams participated in a Delphi training program to streamline booking procedures for customers.  It will also interface with Fidelio in February thereby enhancing service to the guests. . . Genio Pirri conducted several special programs for members of the Management and Supervisory Teams:  Management Skill Building, Foodsafe Seminar, Conflict Resolution Skills and Beyond Guest Service for seven of our associates,

KLIA -- Similar to the witches' house in Hansel & Gretel, the team of chefs build a magnificent gingerbread house to celebrate Christmas & Hari Raya. The house is set up at the Departure Hall of the Kuala Lumpur International Airport. The structure of the house is created by the in house carpenter and is in the shape of traditional Malay house. The whole house is actually can be eaten. The ingredients used included honey, sugar, Ammonia Bicarbonate, milk, soft flour, mixed spices and ginger powder. A total of 40 hours a day was needed to bake the gingerbread and almost a month to finish it. Christmas and Hari Raya goodies are sold at the gingerbread house.

Pangkor -- The resort has purchased a new Ford Econovan for the Lumut Office to improve the luggage services and the transportation of the Guest to and from the jetty.

Palau -- To provide more entertainment to in-house guests and the local community during the holiday season, a nightly Christmas carolling from different choir groups performed at the hotel lobby from December 17 to 25, 1999. . . To top it all of, a choir composed of PPR associates sang during the Christmas brunch at the Coconut Terrace restaurant. The choir was made up of associates from Landscaping, Engineering, FB, HR, Security, Recreation, etc. . . In relation to the coming new millennium, a 10-day countdown includes nightly cultural dance presentations which commenced on December 22 until 31st, 1999. A New Year's gala dinner will culminate the event.

Dhaka -- The hotel organised a Grand Thai Food Festival at the Café Bazar. Mr. Pithaya Pookaman, Ambassador of The Royal Thai Embassy in Dhaka, inaugurated the festival as the Chief Guest and Mr. K. Urabe, Ambassador of Japan in Bangladesh, was the Special Guest. The six day long Culinary Delights of Thailand, included many aspects of Thai Culture, People and Cuisine. A live Thai Dance and Music Show was performed by six artists, flown in from Thailand. Expert Thai Chefs were on hand to prepare authentic Thai Cuisine and Fruit Carving Demonstrations. The restaurant was decorated in the Thai theme. Associates wore traditional Thai outfits. . . A Special Iftar Buffet is being offered at Café Bazar Restaurant during the holy month of Ramadan.

Glenmarie -- Outside Catering was done for the DRB Hicom Defence Longest Drive for 120 pax. The journey took them 3 hours drive and approximately 220 km in distance.

Vancouver -- A special Aeroplan program was launched in both the Five Sails and Misaki restaurants for customers to earn mileage points.  By the end of November, this resulted in an increase in covers in the two restaurants.

Pangkor -- The Beverage Sales on Cocktails was RM1 million from Jan to Nov – Congratulations to the F&B Service Team.

Palau -- A Sales Blitz was held in November around Koror to promote all upcoming holiday events at the Resort. It is also an activity to advertise and appreciate the patronage of the local community. Baskets of PPR goodies were delivered by associates to different government and private entities.

KL -- Site Inspections conducted included Coast to Coast; Nicola Byrne of RSO UK; International Bank Malaysia; MAS Corporate Travel, Australia; Discover Orient; Cocktail for MTPB’s overseas directors; Organisers/committee of IUFRO 2000; Official Hotel Third World Countries’ Mayors Conference. . . Other Activities included long stay guest cocktails; Ananth Ganesh and Matthew Mani attended Explorer Club meeting; Christopher Lee, Yatie Tahir, Azahar, Ananth Ganesh, Rika Masuda and Lai San attended PODS at PPSHKK ; Organised an Cookies’ Baking Demonstration for Explorer members; Continuation of Fax blitz to corporate companies to promote School Holiday Package which offers rate of RM188 nett plus free story books; Sent Millennium Hampers to 24 top corporate clients.

KL -- The School Holiday Package is priced at RM 188 nett, for a Deluxe Room stay with up to two children under 12 years old sharing parents’ accommodation. Breakfast for children is inclusive when accompanied by a parent buying breakfast and free children’s storybooks are given away. Package is valid until February 29, 2000.

Thailand -- The Amazing Thailand Grand Sale attracted tourists to the city of Bangkok for shopping sprees. . . The Royal Sky celebration was held on the occasion of the King's Birthday with an attempt to enter into the Guiness Book of record for most number of parachuters. . .The Light and Sound show was held along the Chao Phraya River as part of the celebrations.

Malaysia -- The Government is keen to promote golf-related activities as part of efforts to develop the tourism sector given the substantial contributions tourism makes to foreign exchange earnings, the Malaysia Prime Minister Datuk Seri Dr Mahathir Mohamed says during the World Cup Golf held in Malaysia. The Prime Minister mentioned that tourists are greatly attracted to the beautifully landscaped greenery of the golf courses and holiday resorts, which are usually developed together in Malaysia. (Business Times - November 18, 1999)

The Minister of Culture, Arts and Tourism Datuk Abdul Kadir Sheikh Fadzir wants Malaysia to provide more famous dishes from around the world in an effort to attract more foreign tourists to the country. He says that one way of attracting more foreign tourists to Malaysia is through the food.

Datuk Abdul Kadir Sheikh Fadzir also mentioned that there are various types of food including Muslim, Chinese, Indian and other Asian dishes in the country, which attract more foreign visitors. He also commented that the Malaysia new slogan - Malaysia Truly Asia is in line with the efforts taken to diversify the types of food in the country to prove that all types of food in the world are available in Malaysia. (Business Times - December 6, 1999)

Malaysia -- The dates for the Grand Prix Motorbike next year are confirmed. It is from The 31^st March to 2^nd April 1999. The dates for Formula One Grand Prix are from October 20 to October 22, 2000. Japan Touring Car race will be held on June 25, 1999.

Dhaka -- The hotel once again focused on ‘Operation Oasis’, an environmental and beautification program. The Program, named ‘A Cleaner Tomorrow Begins Today’, is a follow up of the earlier Program-‘A Greener Tomorrow Begins Today’ which was held through 1998. This Community Care effort was undertaken by the Management and associates of the hotel to clean and green the city. The team led by the General Manager of the hotel, Mr. Hans Gabriel Winsnes, cleaned, painted and manicured the pavements, grills, trees and zebra crossings near the SAARC Fountain Area at Kazi Nazrul Islam Avenue from 9 am to 12 noon. In-house guests of the hotel, the police, passers-by and the hotel team were engaged in a unique exercise and received appreciation from the local people. This environment program has earned corporate accolades in Bangladesh by its unique example of sharing and caring among the community members.

Vancouver -- The hotel hosted for the 13 year in a row the special Christmas Buffet Breakfast in conjunction with a major radio station on behalf of the Christmas Bureau.  Breakfast was provided for over 3,000 people who brought more than 5,000 toys to the hotel to donate to children who would otherwise be without a Christmas gift under the tree.  As always, this particular event generates a great deal of interest throughout the community and also provides the hotel with continuous television as well as radio coverage. . . At the end of November, a fantastic Christmas Craft Fair was initiated and put on totally by hotel associates.  There were more than 13 booths with crafts ranging from homemade jams and candles to Christmas decorations, festive aprons and toys.  The proceeds from sales were donated to the Empty Stocking Fund and 24-hour Relay on behalf of the B.C. Society for Disabled Children.

KL -- The hotel contributed 50 pieces of Gingerbread to the Society for the Severely Mentally Handicapped, Selangor & Federal Territory Christmas Charity Bazaar to raise funds for the society.

Palau -- The Associates of the resort joined the annual Christmas Parade, which started from Airai State to the main city of Koror. This is an annual event where private companies organised themselves to give a big treat to the children of Palau through candy giving and parade of magnificent Christmas floats and entertainment. Santa's sleigh giving gifts to children is the theme of the event.

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If we look at the changes in the world, the wall between the east and the west collapsed, in Japan we changed from the Showa Era to the Heisei Era, and for our Tokyu Group Mr. Noboru Gotoh Chairman of the Tokyu Group passed away on March 20, 1989. 1989 was a year of conversion. Bunkamura also opened this year. It was an age where our group was enjoying the strong economy (the bubble market). But in 1991, the bubble had burst, and it was after that our group faced challenges that we had not expected. Before the new millennium we would like to look back on the activities in the 90’s.

Tokyu Group succeeded Chairman Gotoh’s last wishes and presented the "Tokyu Action Plan 21" to further the "Well-Balanced Life" which was then our slogan "Creating a Well-Balanced Life for the 21^st Century". With the execution of the resort law, there were many projects on the way all around Japan. We opened a multi-resort in Madarao, opened Tokyo Bay Hotel Tokyu, Excel Hotel Tokyu construction started in Toyama & Fukuoka. Mega building projects in Yoga (Setagaya Business Square), Aobadai, Yokohama (including Pan Pacific Hotel Yokohama) also started this year.

PPHR: The Pan Pacific Hotel Auckland opened on April 12

The Pan Pacific Hotel San Francisco opened on June 1

The bubble had burst and capital expenditures by companies in Japan started to decrease. Tokyu Group strived aggressively to implement the "Tokyu Action Plan 21" and actively continued capital investment. As a result interest charges grew together with the depreciation cost and our stock value dropped.

PPHR: The Pan Pacific Hotel San Diego opened on July 12

The Puteri Pan Pacific Hotel Johor Bahru opened on June 1

PPHR Management Changes:

Y. Inagaki retired from President and was appointed as Vice Chairman

I. Umehara appointed as President

Y. Uetani appointed as Managing Director

Value of Real Estate and Stocks dropped, slow down on capital investment, individual consumption decreased and the sense of depression strengthened. Nevertheless Tokyu Group opened the Ski Resort in "Gran Deco", new hotels in Toyama and Hakata, started new golf courses in Niseko (Hokkaido) and Chiba.

Although the Yen was getting strong, depression continued. Consumption sluggish and the need for recognising customers needs and a strong sales force became essential. Harvest Club, Golf Courses, and Ski Resort, which were all projects from the bubble age completed. The box was ready but we had to ask ourselves are we providing what the people need today.

Mr. Jiro Yokota, Tokyu Group Chairman commented this year as "the year of struggle for the Tokyu Group". Because the Real Estate value and the interest rate dropped over the past few years, housing sales and consumption was gradually coming back. But private companies still refrained from capital investment and all the group companies were in an uncertain position. For the group companies, cost saving, re-structuring and all kinds of efficient management systems were put into place.

PPHR: The Pan Pacific Hotel Bangkok opened on January 1

The Pan Pacific Glenmarie Resort opened on September 10

Opening of new wing at Palau Pacific Resort October

Earthquake struck Hanshin-Awaji area, there was a horrible deadly gas incident in the subway by a cult organisation and although the economy was slowly recovering, the strong Yen restrained Japan from total recovery. Discount war started and together with the strong sales force and distribution power, Customer Satisfaction activities became necessary. Mr. Hitoshi Shimizu became the new chairman of the Tokyu Group. 6 companies within the group who have been listed on the Tokyo Stock Exchange changed their presidents to become a younger organisation. It was also the age of multimedia and research on next generation networking started this year.

PPHR: Closure of The Pan Pacific Hotel Auckland January 27

Closure of Hotel Le Lagon January 30

Establishment of Pan Pacific Hotels & Resorts Pte. Ltd. June 26

Started developing the Group Slogan. There were a lot of new Hotel & Resort Business and Commercial Development. Japan Air System painted their aeroplane rainbow colour and started restrooms for ladies only, which was a current topic then. Tokyu cable television obtained license for electronic communication looking at providing Internet connection in the future. Ecology became the keyword of business.

Domestically scandals and bankruptcy of major companies in Japan continued. Consumption tax increased from 3% to 5% and our customers tightened their wallets. Our Tokyu group was experiencing difficulties which we had never faced before but we announced our new slogan "Towards a beautiful age" in order to be active and keep on growing into the next century. New projects in our hometown Shibuya started this year. Hachio-ji, Yokohama project was completed and new base for our expansion was ready.

PPHR: The Pan Pacific Hotel Yokohama opened on August 7

The Pan Pacific Lodge Whistler opened on December 15

The Pan Pacific Legacy Hotel Malacca opened on December 24

Chairman Mr. Shimizu commented this year as the "Tokyu Group standing at the edge of a cliff" and asked for all the group companies to become independent. If the company cannot survive by themselves there will be no collaboration. All the group companies submitted a new three years financial plan. Tokyu department store sold their flagship store at Nihonbashi and other companies announced their restructuring plans, which were taken up by the media. In order for the group companies to strengthen their collaboration, Tokyu Group Summit was established.

PPHR: The Pan Pacific Sutera Hotel Kota Kinabalu opened on March 17

The Pan Pacific Hotel Manila opened on April 20

The Pan Pacific Hotel KLIA opened on June 23

Economy is gradually getting better but for the Tokyu Group struggling has not ended. This year Mr. Shimizu emphasised again on the importance of "Working Independently and in Collaboration" and presented a new basic group policy where by Tokyu Corporation takes the lead in "Exploitation of new business" with an environment friendly and customer satisfaction mindset. Y2K became a big issue for most of the companies. Rapid expansion of the net society made travel package sales and hotel reservations through the Internet popular. E-commerce became also a trend.

PPHR: Withdrawal from The Pan Pacific Legacy Hotel Malacca May 14

Withdrawal from The Pan Pacific Sutera Hotel Kota Kinabalu December 31

Withdrawal from The Pan Pacific Leader Hotel Penang December 31

? ? ? ?

Please contact me at kazuyoshi.shimojima@tkk.tokyu.co.jp

If you have any comments or questions.