Doug Ashbury
Northern News Services

Yellowknife (Oct 04/00) - Grandfield Pacific, the company that owns Yellowknife's largest hotel, is looking to its second property to add to the bottom line in the cooler winter months.

Ongoing upgrades to the Discovery Inn, acquired in April 1999, "will enable the company to supplement its available room supply for visitors to the area during the busy winter season," the company said in its quarterly financial report released last week.

Much of the Explorer's business comes from Japanese tourists visiting Yellowknife to see the Northern Lights.

"During its first year as owner of the Discovery Inn, the company has concentrated on staffing issues, improving product and service quality and identifying new target market opportunities.

"These changes should make this hotel an effective competitor within its market segment as well as positioning it to provide a secondary resource to the Explorer Hotel during the winter months when (Explorer) room demand exceeds supply," Grandfield president Harry Symington wrote in the company annual report, also released last week.

Last year, Grandfield paid $939,986 for 831524 NWT Ltd., owner of the Discovery Inn, and amalgamated the company with Regency International, Grandfield's principal operating subsidiary. Regency had the management contract for the Discovery Inn, located on Franklin Ave., since 1990 and continues to manage the property.

The Discovery Inn contributed $225,597, or 13 per cent, to Grandfield's total revenues for first quarter.

Expenses related to the acquisition of the Discovery Inn were largely responsible for Grandfield's drop in profit for the fiscal year ended April 30, 2000. Year 2000 profit was $327,179, about half that of the prior year.

As for the Explorer Hotel, the company said in the annual report that room revenues were similar to the 1999 year.

But results from the banquet division in fiscal 2000 were disappointing -- this division was down 26 per cent.

Grandfield blamed "escalating travel costs" to Yellowknife for the drop in bookings by out-of-town organizations.

First quarter

For first quarter, Grandfield booked a modest profit, despite a drop in total revenues.

Revenue fell due to declines in visitor activity in all departments at the Explorer, according to Grandfield. The rooms division was down primarily due to low occupancy levels in May.

A drop in management fees was also a factor in the lower total revenue.

The lower revenue was offset by declines in expenses, administrative costs and interest on long-term debt.

For the three months ended July 31, Grandfield made $44,279, up 16 per cent from the $38,235 earned in first quarter 1999.

Revenues for the quarter were $1.7 million, down from $1.9 million in first quarter 1999.

The financial results were released last week. Grandfield's stock closed up five cents at 65 cents Friday (52-week high and low, $1.10 and 40 cents).

It was reported the company's management contract with the Frobisher Inn in Iqaluit ended in February.

The contract generated much of the company's $206,000 in management fee income in fiscal 2000.

On the company's business activities abroad, Grandfield Pacific anticipates its investment in a hotel in Hong Kong will generate a small profit this year.

In other company developments, Stephen Bou and Brian Fraser resigned from the board.