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Hotel Woes / Hotel Lawsuits / Cabo Hotels / Cabo San Lucas Hotels / Capella Hotels / Hotel News / → All Tags
Over the weekend, there was a slight reprieve in the press release war between Capella Hotels and the owners of The Resort at Pedregal but judging by the latter's social media postings, they are not backing down and will forge ahead with their new identity and management.
Quick backstory in case you missed it last week: The owners of Pedregal terminated Capella as the luxury resort's manager, installed a new GM (from a Wyndham hotel in Chicago, btw) and locked Capella's old GM out of the property. Capella took the owners to the NY Supreme Court and got a ruling which reinstated them as managers. Meanwhile, the resort is still closed for ongoing renovations due to damage sustained by Hurricane Odile.
Could this BE any more of a hotel telenovela???
Over the weekend, perhaps to show off their determination in the face of the court ruling, The Resort at Pedregal has been steady with their social media postings. Here are a couple of posts from their Facebook feed:
Hotel Lawsuits / Hotel Woes / Hotel News / Hotel Fights / Capella Hotels / Cabo Hotels / Cabo San Lucas Hotels / → All Tags
Earlier today, we learned that Capella Hotels was reinstated as manager of the Capella Pedregal in Cabo San Lucas, a luxury resort that's currently closed while undergoing renovations for damage sustained from Hurricane Odile in September. But there's another storm brewing behind the scenes and this one could damage the resort for good.
Earlier in the week the owner of the Pedregal property, Hoteles de Cabo, S.de R.L.de C.V, (also known as CarVal Investors) announced that Capella would no longer manage the resort. The property would be known instead as The Resort at Pedregal. When we inquired about the reason for the management change, we were told this: "It was decided by ownership that it is in the best interests of everyone involved for The Resort to begin a new direction and the name change reflects the commitment to the new direction." Very vague.
But now that Capella has taken the matter to court and won a ruling in their favor, Hoteles de Cabo has let loose a bunch of allegations of mismanagement including, "unauthorized payments to themselves, and false financial reports." Perhaps worst of all, Hoteles De Cabo said Capella Hotel Group is withholding the funds that were donated to the employees of the resort after the hurricane.
Here's a statement from the Pedregal ownershipr:
"Beyond its mismanagement of the property itself, Capella has held funds donated by generous patrons to help the neediest team members recover from the devastating effects of Hurricane Odile.
Capella is holding tens of thousands of dollars intended specifically to help hotel associates get their lives back in order following the horrific storms that have plagued Cabo recently. For reasons beyond our knowledge, they have opted not to distribute those funds. This is not only unacceptable for the unfortunate families involved, but should be doubly embarrassing in light of the fact that the funds were donated by our guests."
So much for that hefty donation Capella Hotel Group contributed. Hoteles de Cabo has said their company has distributed $125,000 directly to the employees of the hotel.
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OhEmGee. There is already so much hotel news flying around this week and it's ONLY MONDAY. Needless to say, we just don't have enough time to focus on all of it. So here's a quick rundown to get you up to speed on the latest.
· FAIRMONT NO LONGER IN PLACE AT BOSTON'S BATTERY WHARF HOTEL : The Fairmont Battery Wharf Hotel in Boston was recently sold and the Fairmont brand was ousted as of October 27. The hotel will now be known as The Battery Wharf Hotel & Spa. It will be managed by a Canadian company, Westmont Hospitality Group.
· FAIRMONT ALSO HAVING ISSUES IN BERMUDA BUT PICKS UP BARCELONA: Just after the $90 million redevelopment of The Fairmont Hamilton Princess, and their brand new marina, The Princess Marina, the hotel's owners are now trying to ditch the Fairmont brand. A report came out today about a lawsuit filed in NYC by the hotel's owners and as expected for these type of owner-manager lawsuits, it's not pretty. Read the full list of accusations, and Fairmont's response, here. Meanwhile, Fairmont has announced they will pick up the Hotel Rey Juan Carlos I in Barcelona.
· ANOTHER AC HOTEL BY MARRIOTT IN THE WORKS: We're closing in on the grand opening of the first AC Hotel by Marriott in the U.S. (in New Orleans) but we've got a tip on another AC location. Sorry, it's not as exciting as NOLA. Woodbine Development, Inc is bringing the AC brand to the Park Place Development in Irvine, Calif.
Hotel Lawsuits / W Hotels / Hotel Hookers / Hooker Havens / Hotel News / Miami Hotel Mambo / → All Tags
Someone mentions "hooker havens" and we're all ears.
A South Jersey couple filed a personal injury lawsuit against Starwood Hotels & Resorts last year after the woman half of the couple was attacked in the lobby of the W South Beach by a bunch of drunken prostitutes who thought she was creeping on their turf. The woman's face was slammed into a stone wall, then she was thrown to the ground (a marble floor.) They are asking for $75,000 in damages.
There was a little bit of a legal tussle after the suit was filed with a judge denying a request of venue change as well as sealing some documents but a few things have been leaked out, namely this "discovery"--the couple hired undercover investigators to "infiltrate W hotels across the country" and those investigators found that W Hotels are "hooker havens." Here's why, according to a recent court filing which was posted on Philly.com:
"These agents engaged Starwood and W Hotels employees who openly, and without hesitation, procured the services of prostitutes for the agents," the filing said.
"When asked about getting caught and being prosecuted by law enforcement, the employees reassured the agents there was no risk of discovery.
"Starwood and W Hotel employees enticed the agents by sending them provocative pictures of prostitutes able to service them at W Hotels. . . . At one such W Hotel, a prostitute used the concierge desk to charge her cellphones and store her purse."
That sounds bad but then it gets worse.
Miami Hotel Mambo / Setai Shakedown / Hotel Lawsuits / Hotel Management Companies / Hotel Industry News / GHM / → All Tags
More than two years later, the drama at The Setai in Miami Beach has ended. And in favor of the hotel operator, GHM, who was kicked out, literally, in the middle of the night, by the hotel's owners, Lehman Brothers.
Last week, the ICC International Court of Arbitration ruled "that all previous allegations of mismanagement were baseless and have awarded damages to GHM for improper termination of GHM’s hotel management agreement." It seemed that the hotel's impressive RevPAR rate of 76 percent was a key factor in the decision against Lehman. Lehman Brothers now have 30 days to make the compensation to GHM. The Miami Herald reports the damages exceed $10 million. There are also more tort claims against Lehman that are still pending in state and federal court.
However, GHM will not return to the property as manager. Trevi Luxury Hospitality Group., which has managed the hotel since the shakedown, still remains in place. Room rates for this weekend for a studio suite (the starting room category) start at $530 a night but there's a AAA discounted rate and a Florida resident rate available for $488.
[Photo: The Setai]
Women-Only Hotels / Hotel Woes / Copenhagen Hotels / Female-Friendly Hotels / Hotel Lawsuits / → All Tags
Last year at this time, we wondered how long women-only hotel rooms and floors would last? Well, for the Bella Sky Comwell Hotel in Copenhagen, the end is already here.
The Eastern High Court has ruled the hotel's 20 women-only hotel rooms on the Bella Donna floor to be "unlawful" after two men and the Danish Board of Equal Treatment sued the hotel for discrimination. Apparently, these two men never even visited the hotel, nor did any male guests complain about the women-only rooms.
In a press release, the hotel's owner, Allan L. Agerholm expressed frustration at the ruling but said the hotel will comply with the order.
"We had of course hoped to win the case, since, in our opinion, we do not discriminate the opposite sex, since the same product in the same high quality is available for men in our remaining rooms. We were of the opinion that a hotel should be allowed to differentiate between guests and between the sexes, as long as we do not put them at a disadvantage."
Considering that this lawsuit has been going on for nearly three years, we don't blame the hotel for giving up the fight. That said, the hotel only offered 20 rooms out of 812 just for women. The women-only rooms did offer different amenities including high-end moisturizers and healthier food options but they also gave women a sense of security when traveling alone.
For now the Bella Donna floor is still up on the hotel's website (the URL calls it the Lady Floor) but we imagine that will come down soon. For posterity's sake, here's what the floor included:
HotelChatter Flashback / Denizen Hotels / Hilton Hotels / Starwood Hotels / Hotel Lawsuits / → All Tags
It's time for a walk down memory lane with a HotelChatter flashback!
What we didn't know then is that the story of Denizen would end, not with a glamorous hotel opening in an urban market somewhere, but rather in federal court with Hilton being forced to pay Starwood Hotels $75 million for stealing ideas from their rival hotel company, largely through Hilton's hiring of Ross Klein, the so-called godfather of Starwood's W Hotels. Hilton also had to agree to "certain business restrictions" as well as agree not to buy or franchise any Starwood Lifestyle Brand hotel that Starwood operates nor hire anyone from Starwood for two years.
But guess what? The two years are up! And we've heard whispers that Denizen is being resurrected, although with a completely different name and look. Even though we hated Denizen when it was first introduced we can't wait to see what the new incarnation will look like.
When The James Royal Palm Miami opened last November, after much anticipation and a few delays, our first impressions were rather good. Back then we wrote this about the spot:
Getting a first-hand look at the lobby and the rooms (we had to forgo the pools, since we were there at night, and there weren't any guests swimming anyway), it's obvious that the James is trying to do something a little different from the other Collins Ave properties. You end up feeling like you're in someone's beach bungalow rather than an art museum. The furniture looks like it came out of some eccentric, but tasteful, neighbor's yard sale (we even spotted a bench made of plastic cups that sink under your weight when you sit down—nerdy but cool.)
Yet it doesn't look like the hotel owner was too happy with the finished product.
According to Law360.com, RP Hotel Holdings LLC has filed a lawsuit against Tatro Construction Co. LLC, claiming the contractor "failed to coordinate and supervise construction and failed to reasonably and timely perform the work." A-ha. So this probably explains why everyone was so touchy about the hotel missing the October 1 opening date.
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Looks like Regent Hotels will encounter another contender in its quest to have the number one resort in Bali: Ritz-Carlton just announced last week it will return to the island next year. This follows a previous RC resort at Jimbaran Bay, which became the independent Ayana Resort back in 2009. A first rendering shows a sprawling resort with both a beachfront and cliff-side angle, including what we assume is a set of lifts in the shimmering vertical building connecting the two.
There will be a total of 288 rooms, including 90 suites and 14 villas. Cliff-side, there are an additional 10 villas. The other thing that is unequivocally clear from the aerial view is that there will be pools. And lots of them. Restaurants and all the usual accoutrements of a luxury resort will no doubt be there as well.
Update 11:50AM, 6.14.13: The board has voted! See results below!
Man, the Morgans Hotel Group cannot catch a break.
The parent company to such hip hotels like the Delano South Beach and The Hudson in New York has been sued again. This time, the lawsuit's been filed in Istanbul by a company called JMJ Development, LLC who is claiming Morgans Hotel Group, its CEO and a property owner engaged in "breach of contract, tortuous interference with existing and prospective contracts, intentional misrepresentation, conversion, fraud, and conspiracy." That's some serious stuff. You can read all the nitty gritty accusations on the press release but here's a snippet:
Without JMJ's knowledge or participation, Morgans and Coruk created a new Turkish company to own and develop the hotel, Morbel Hospitality, in which Michael Gross and Richard Szymanski, CFO of Morgans, are directors. According to a December 2011 press release, Morgans released $10 million to the new company under terms remarkably similar to the terms negotiated by JMJ. The parties conspired to circumvent the agreements to JMJ's detriment.
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The hotel that launched a thousand
ships pages of court filings
According to Bloomberg News, investor Ron Burkle threatened to "crater" some of the hotel group's other deals (like in Moscow and Las Vegas) if the Morgans board members did not approve the Delano South Beach buyout bid from his Yucaipa companies as well as his proposed recapitalization plan.
One of Morgan's largest shareholders, OTK Associates, has already filed a lawsuit against other Morgans board members to stop this arrangement. OTK also wants to overhaul the board and in effect, the company. Meanwhile, Bloomberg News reports that Morgans with its 13 hotels has lost money in every quarter since 2007.
If this sounds terribly confusing, it is. Essentially two board members are fighting each other over direction of the company and who gets most of its assets. Like we said last month, this may not immediately affect your experience at a Morgans Hotel right now, but it certainly could in the future.
More importantly, if the hotel group hasn't turned a profit since 2007, we're not so sure how many of their new hotel projects will actually come to life. To be continued....
Hotel Industry News / Hotel Woes / Delano hotels / Morgans Hotel Group / Hotel Lawsuits / → All Tags
Last week we were stunned to hear that Morgans Hotel Group was selling off its prized possesion, The Delano South Beach. But once we waded through the legal mumbo-jumbo and found that the Delano would remain the Delano and that Morgans would still be running the shop, we were cool with all of it. But we shoulda known better. These hotel sales are never easy.
OTK Associates LLC, the largest stockholder of Morgans Hotel Group Co., has now filed a lawsuit to stop Morgans from re-arranging The Yucaipa Companies interest in the company. (Currently, Yucaipa holds Morgans stock, stock warrants and convertible notes. Morgans' directors want Yucaipa to take ownership of the Delano and the Light Group instead.) OTK Associates believes that the switcheroo would favor the Yucaipa company over other stockholders (like OTK) and is also, you know, like totally illegal according to Delaware law.
OTK also has issues with the looking to stop the postponement of the company's annual meeting which is usually held in May but which is now set for July because OTK believes that stockholders will be denied the right to review the transaction.
As of this afternoon, OTK actually secured a right of postponement on the "recapitalization plan" and released this statement:
OTK is pleased that the Morgans Hotel Group agreed to delay the rights offering, as OTK had requested in its motion for a temporary restraining order. All shareholders should be deeply troubled by the current board of directors’ continued waste of corporate assets to advocate for a coercive and dilutive transaction that OTK believes is invalid. Further, the use of company funds to change shareholder voting rules and diminish voting rights calls into question this board’s fiduciary duties and responsibilities.
Again, we don't think this is going to affect your next Morgans Hotel stay but you never know what might happen in a few months. Lawsuit and other problems at the top always trickle down, even down into your hotel room.