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Hilton's Denizen Employees Could Face Criminal Charges

The Wall Street Journal reported this morning that Hilton Hotels and its executives accused of stealing proprietary W Hotel information to create their now dead-in-the-water hotel brand Denizen Hotels, could face criminal charges.

The grand jury is part of a six-month-old Justice Department probe into allegations that Hilton, which is owned by private-equity firm Blackstone Group, used trade secrets taken by former Starwood executives, who defected to Hilton last year, to develop its own luxury brand to compete with Starwood's successful W chain.

About 30 Hilton employees and executives have either been fired or placed on leave. Ross Klein, the former president of Starwood Hotels who defected to Hilton and was in charge of the Denizen development, was initially place on paid leave with Hilton. However, he was recently replaced by John Vanderslice as Hotels magazine reported last month.

But there is a chance that even if Hilton as a corporation is not criminally charged, the individual employees could be prosecuted themselves.

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Greenbrier to Marriott: 'Let's Call the Whole Thing Off'

Where: 300 West Main St. [map], White Sulphur Spring, WV, United States, 24986

This year's drama at the Greenbrier in West Virginia unfolded a bit like this: the resort was having some issues, so it shed about half of its staff. Then the rumor goin' around town was something about Marriott coming in to purchase and save the resort (um, and by "rumor" we mean there was a contract involved) — but then another buyer stepped in and snapped it up, and furloughed employees were called back.

But then the new buyer reached a tentative marketing agreement with Marriott, where the chain would receive "a special fee for every Greenbrier guest booked through the hotel chain's marketing network" — and if it didn't work out, the hotel's new owner would have to pay Marriott "a $7 million 'break-up fee'" if he ended Marriott's marketing partnership.

And it looks like that's what just happened.

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St. Regis Monarch Beach is Citigroup's Problem Now

Where: 1 Monarch Beach Resort [map], Dana Point, CA, United States, 92629

As we reported in June, the St. Regis Monarch Beach — also known as that hotel where AIG execs blew 500K on a corporate retreat just after the group got a federal bailout — was facing foreclosure — and now its owners have turned it over to its mezzanine lender, Citigroup.

According to the WSJ, the resort missed payments in April on a $70 million mezzanine loan from Citigroup. Naturally, the Starwood talking heads had this to say about the transition between its current owner and Citigroup:

"The acquisition (through foreclosure) will have no impact on the hotel, golf club or beach club," Citigroup spokeswoman Danielle Romero-Apsilos said. The resort will "continue operate at the highest standards of service, seamlessly and without interruption for guests and employees."

Yeah, yeah. We know; it usually doesn't affect you. Unfortunately, it doesn't affect rates either: they're still hovering around $545.

Hotel Woes / Dream Hotels / Manhattan Hotels / Industry News / → All Tags

Will Dream NYC's Financial Woes Affect You?

Where: 210 West 55th Street [map], New York, ny, United States, 10019

So, we knew Dream NYC was having some major financial issues. A $100 million loan secured by the hotel "was put on a special servicer status" a few months ago — which usually does not necessarily mean that the loan is going to default. But in this case, it did: National Real Estate Investor reports today that the hotel actually defaulted on that $100 million loan. Alright then. So now what?

An excellent article over at Budget Travel outlined exactly what it means for the guest when the hotel you've booked is in major financial trouble. Quick summary: in almost all situations — whether a hotel has defaulted on a loan or is actually in foreclosure — it means absolutely nothing:

As Joe McInerney, president and CEO of the American Hotel & Lodging Association, puts it, hotel guests don’t have much to worry about. "When a hotel is in foreclosure, it's business as usual from the guest's point of view," says McInerney. "All commitments are honored. If new operators have taken over, it's generally a seamless procedure."

The BT article goes on to explain what happens when a bank takes possession of a hotel — recommended reading, for sure — but in most cases when a hotel is having serious trouble, you don't see much from the guest side of things unless there is some sort of crazy political owner vs. management debacle going on (a la what some people are saying went down with Four Seasons Aviara).

Uh, we're still gonna keep our eye on Dream, though.

Hotel News / Industry News / Orient-Express Hotels / → All Tags

Orient-Express Hotels' NYC Library Deal is Back On

Back in '07, we reported that Orient-Express Hotels' was planning to grab a little piece of The New York Public Library (specifically, the Donnell Branch) to convert it into a hotel.

What is currently a five-story libe building on West 53rd Street was going to become an 11-story hotel, but the first floor and underground would have still been owned and occupied by the library. The rest of the floors would have been dedicated hotel space, and five of those floors were going to have direct access to the 21 Club on 52nd street (also owned by Orient-Express).

But then the deal kinda fell apart (that it, progress was halted indefinitely) in March, another victim of the craptastic economy; "lack of availability of credit for construction" were the reasons Orient-Express cited for the holdup.

But! It seems to be moving forward now.

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Hotel Woes / Industry News / Hotel News / → All Tags

The Doom-and-Gloom Predictions for the Hotel Industry Continue

Sorry to deliver this news so early in the morning, but don't kill the messenger on this one. We just stumbled across a particularly unpleasant article circulating that, unfortch, explains that Smith Travel Research has "significantly lowered its expectations for U.S. hotel industry room rates and revenues, and the firm said moderate declines would continue through 2010." Ugh.

Per a statement:

Smith Travel Research now projects that average daily rate will drop by 9.7 percent in 2009, and revenue per available room will be down 17.1 percent year-over-year. In April, the firm had forecast a RevPAR drop of 9.8 percent and a rate drop of 3.6 percent (BTNonline, April 28). STR also said occupancy will drop 8.4 percent to 55.4 percent this year, slightly down from the rate of 56.5 percent it forecast in April.

In 2010, drops in all three metrics will continue, STR said. It forecasts that rates will drop 3.4 percent, occupancy will drop by 0.3 percent and RevPAR will be down 3.7 percent.

STR President Mark Lomanno predicts that it's not unrealistic to expect this bummer period to last longer than six years (or rather, it may take that long for rates get back up to the levels they were at in 2007).

Good morning.

Industry News / W Hotels / Starwood Hotels / Four Seasons / Ritz Carlton / Luxury / → All Tags

Starwood Sells W San Francisco

Where: 181 3rd Street [map], San Francisco, CA, United States, 94102

News outta W Hotels today (well, news besides the opening of W Washington DC): according to the San Francisco Chronicle, Starwood has agreed to sell the W San Francisco to Hong Kong investment company Keck Seng Investments Ltd for $90 million. Per a statement made by Starwood, the sale was made to reduce the 'wood's debt — but never fear, the place will still operate as a W.

But the sale sort of sheds light on the sad-ish state of affairs in the hotel industry:

The high-water mark for San Francisco hotel sales was set around April 2007, when Taj Hotels Resorts and Palaces based in Mumbai, India, bought Campton Place from Kor Hotel Group of Los Angeles for about $58 million. That amounted to more than $500,000 per room, nearly 60 percent more than the W's "per-key" price of less than $213,000.

Whew. That W had been for sale since the end of last year, though, so we guess it's good that someone bought the place.

Denizen Hotels / Hilton Hotels / Hotel Woes / Industry News / → All Tags

Denizen Update: Probably Gone But Not Forgotten

Oh Denizen. You seem to be gone — your website is dead, there's been nothing but quiet since development was suspended, which is probably the wise (and law-abiding!) thing to do — but we just like to do little updates now and then just to remind the world that, though you may be gone-ish, we haven't forgotten you.

And neither has Hilton, we suppose. While we assume legal proceedings and negotiations and possible out-of-court (and outta the press) settlements are underway, we noticed the brand is absent from the Hilton Family website — but not, it seems, absent from some of the press releases we've seen going around lately (like this one), listed among the rest of Hilton's babies ("The company owns, manages or franchises some of the best known and highly regarded hotel brands including Hilton, Conrad Hotels & Resorts, Denizen Hotels, Doubletree..." etc, etc.) Interesting, no? Well, no. Not really.

The truth is, we just don't really know what's going on and the Hilton peeps have done a damn good job of keeping the press away from what we assume is a whole lot of interesting action going on very quietly between Denizen and Starwood. We're sticking with our guess that the thing's totally dead in the water, but — like the sorta-mean frenemy who will always remind you of the time you wet your pants in 3rd grade — we are going to continue to bring it up from time to time so nobody forgets that we're watching and waiting for the outcome of this.

Or someone could just, like, tip us off.

Hotel News / Industry News / Hotel Booking Sites / → All Tags

Booking NYC Hotel Rooms Online Might Be Getting a Bit Pricier

Uh-oh. We're pretty sure lots of online hotel booking sites are going to have something to say about this: according to WNYC, New York City's Mayor Bloomberg "will sign a bill into law today that should bring in a lot of additional tax revenue for the city" — that is, travel sites will now have to pay taxes on the full retail prices of the NYC hotel rooms they sell.

Per WNYC:

The city believes it's currently collecting less hotel tax than it should. That's because some travel websites pay hotel taxes based on the wholesale rate of the rooms they buy. Then, the websites charge their customers the same hotel tax on retail room rates, and pocket the difference.

A trade group representing travel web sites says the change is, quote, "exactly the wrong approach", and will result in more vacant hotel rooms.

Uh, hmmm. Yikes. We'll keep you updated as we learn more about how much this is going to affect the price you're going to be paying (if it does) — in the meantime, we suspect the travel sites are not really going to be so down with this.

2009 Brand Expansion Report / Hotel Brands / Industry News / Aloft Hotels / Element Hotels / Hotel Indigo / Andaz Hotels / Edition Hotels / Barry Sternlicht / NYLO Hotels / → All Tags

Brands Born in the Recession: Where Are They Now?

It's no secret that the economy has had a massive impact on the hotel industry. Hotel openings have been delayed; construction has been halted on properties in development; jobs have been lost; room rates have been slashed — but the last several years also saw a boom in the introduction of new brands and a handful of entirely new, supposedly game-changing segments (the "budget chic" pack, for example).

Naturally, with the introduction of each new brand came a wave of hype and some big, big expansion plans — and then came the recession. Needless to say, those big plans changed.

Here's a look at the current state of some of those newer brands — a progress report, if you will — that outlines how many properties each brand had planned on when the concept was introduced, how many properties they've actually opened as of mid-2009, and, of course, how they're faring out there in the cold, brutal world.

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Industry News / Starwood Capital / → All Tags

Starwood Capital Picks Itself Some Golden Tulips

Golden Tulip Avegoor, Netherlands

Starwood Capital seems to be cultivating a garden of sorts. A garden full of tulips, if you will. Golden tulips, even.

According to Private Equity Real Estate:

Starwood Capital has entered into exclusive talks to buy the Swiss hospitality group Golden Tulip creating one of the world’s largest hotel companies.

The Greenwich, Connecticut-based private equity real estate firm said in a statement it was planning to merge its budget hotel company, Louvre Hotels, with Golden Tulip once the deal was closed on 26 June.

Whatchya gon' do with all them tulips, Starwood Cap? Apparently, the alliance with Louvre is going to "create a hospitality company with 1,070 hotels in more than 40 countries and comprising around 82,000 rooms" that will be better positioned to target corporate accounts.

Oh, if you're not familiar with the Golden Tulip brand: there's only one of 'em in the US, in Bethesda, MD.

Industry News / Hotel Woes / ExtendedStayHotels / → All Tags

Extended Stay Chain Files For Bankruptcy, But That Won't Affect You

Today in hotel industry bummer news: Extended Stay Hotels — they of the really funny and sometimes creepy-gross commercials — has filed for Chapter 11 bankruptcy protection.

There are over 650 Extended Stay properties in North America, but even though the bankruptcy has been splashed across headlines all morning, the company (operated by HVM) promises the proceedings will have no impact on operations of the hotel chain and its brands, including Extended Stay America, Extended Stay Deluxe, Homestead Studio Suites Hotels, StudioPLUS Deluxe Studios and Crossland Economy Studios.

So it's all good from the guest side: reps say "all hotels are open and welcoming guests as usual," and there are no plans to either close or sell any of the hotels. Everything is still open and available for you to lick.