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Inside Saturday's Shakedown at The Setai Hotel in South Beach

Where: 2001 Collins Avenue [map], Miami Beach, FL, United States, 33139
April 2, 2012 at 2:38 PM | by | ()

UPDATE: GHM speaks out on the shakedown!

It was a wild Saturday in Miami last weekend which really isn't nothing new for the party town but things got crazy--like police involved crazy at The Setai for a different reason--a hostile middle-of-the-night takeover.

USA Today reports the owners of The Setai, Setai Owners LLC, kicked out their current management company, General Hotel Management and GHM (South Beach) LLC, and replaced them with Dallas-based Trevi Luxury Hospitality Group.

The ousting happened because the Setai owners (which is actually a unit of Lehman Brothers) claims the hotel should be more profitable. Here's a little bit on what the hotel was spending their money on (this comes from Lehman's request for arbitration to essentially end GHM's management contract):

"In 2010-2011 alone, the Hotel's Rooms Department incurred excessive expenses of over $2 million, its Administrative and General Department incurred excessive expenses of approximately $2.3 million, and its Marketing Department incurred excessive expense of approximately $3.3 million. Had GHM not negligently expended those amounts – and, instead, operated more efficiently – Owner would have realized an additional $7.6 million in incremental profit."

Yowza. You would think that a hotel that charges up to $1,000 a night in high season would be rolling in the dough but clearly that is not the case. And we're sure airlifting Dwayne Wade's car into the pool area didn't help either.

We've got word that the Setai staff is attempting to file an injunction to stop the takeover but if the Edition Waikiki Takeover is any precedent to learn from, we don't think they will have that much luck. (Not so coincidentally, the law firm who helped Setai orchestrate the takeover was the same firm that helped the Edition, now Modern Honolulu's, owners.)

Meanwhile, the new management group, Trevi, plans to offer "most" of the current employees jobs at the hotel. Except we've already heard that upper management at the hotel is pretty much gone. As for hotel guests, they shouldn't notice anything different, so says Trevi. CEO Atef Mankarios put out a statement promising hotel guests, "a level of service and attention to detail that is beyond comparison."

Rooms at the hotel are sold out this weekend for Easter but we found rooms for $775 a night next weekend. Still concerned about the fragile psyche of the hotel during your stay? Call the hotel at 305-520-6110 with questions.

Got any other scoop on the Setai Shakedown? Even better, do you work at the Setai and want to share your story on the DL? HotelChatter is here for you!

Archived Comments:

Just noticed

GHM is still listed on the hotel's website. Waiting for that to be changed in 3...2...1