On May 10, Sega Sammy Holdings announced plans to sell the operator of the Phoenix Seagaia Resort in Miyazaki to Fortress Investment Group. While the sale price remains undisclosed, Sega Sammy expects to post an extraordinary profit of ¥8.5 billion for the financial year ending March 2025.
A Troubled Beginning
The Phoenix Seagaia Resort, which opened in 1993, was Japan’s first designated resort under the Act on Development of Comprehensive Resort Areas. The ¥200 billion project was a public-private venture aimed at creating a world-class tourist destination. However, the collapse of Japan’s asset bubble and high pricing made it difficult to attract visitors.
The resort faced significant financial challenges, with annual losses of ¥20 billion. By 2001, it had filed for bankruptcy protection with debts totaling ¥326 billion. Efforts to find a buyer culminated in its sale to US private equity firm Ripplewood Holdings for ¥16.2 billion. Ripplewood invested an additional ¥7.5 billion to enhance golf and hot spring facilities, targeting affluent guests. These changes helped the resort turn a profit for the first time in 2007, recording an operating profit of ¥222 million.
Recent Performance
The resort’s financial performance has improved steadily in recent years. For the fiscal year ending March 2024, gross revenue increased by 5.8% year-on-year to ¥11.5 billion, while final profit rose 1.2% to ¥80 million.
Sega Sammy’s Role
In 2012, Sega Sammy Holdings acquired Phoenix Resort, making it a wholly-owned subsidiary. The company invested ¥10 billion in a major refurbishment of the property, which reopened to guests in August 2016.
The Resort Today
The Phoenix Seagaia Resort features the iconic 43-story Sheraton Grande Ocean Resort Hotel, a 744-room property standing 154 meters tall. It is both the tallest building in Miyazaki Prefecture and the tallest hotel in Kyushu. Other amenities include natural hot springs, tennis courts, a zoo, and two golf courses, offering a wide range of activities for visitors.
A New Chapter
The sale to Fortress Investment Group marks a new chapter for the resort. With Fortress’s global expertise and resources, the Phoenix Seagaia Resort may gain fresh opportunities for growth and revitalization, reinforcing its status as one of Kyushu’s premier tourist destinations.
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