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Merry Christmas to all! Your present from Santy Claus is never hearing about the Hilton-Starwood Lawsuit ever again!
That's because today Hilton has agreed to settle with Starwood over the failed Denizen brand plans which were, as Starwood alleges, "infected" with Starwood trade secrets. Hilton had hired several key employees from Starwood, including W Hotels' Ross Klein, who took with them proprietary Starwood information with which to create Denizen.
The total cost for Hilton to settle? $75 million which is reportedly the monetary payment they are now going to make to Starwood. Not only is Hilton $75 mil poorer but now Denizen is totally dead and never going to see the light of day (we say, Good! That hotel brand was dizzyingly confusing.)
Additionally, Hilton has agreed to "certain business restrictions" for two years. We take that to mean Hilton is not going to be rolling out any new boutique hotel brands until 2013.
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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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We reported earlier this week that Hilton had halted development of Denizen (per a Hilton press release), but now Starwood is speaking out (i.e. issuing their own press release) saying that a judge has actually entered a Preliminary Injunction with Hilton, Mr. Klein and Mr. Lalvani the Starwood-turned-Hilton employees who allegedly stole the Starwood documents and trade secrets to develop Denizen enjoining them from:
· Developing further the Denizen Hotels brand. This requires that all internal and external design, branding, development, promotion, programming, staffing and marketing of the Denizen Hotels brand cease.
· Engaging in any discussions or negotiations with prospective owners, developers and/or franchisees relating to the Denizen Hotels brand.
· Using, directly or indirectly, in any way the documents and electronic information obtained from Starwood (the "Starwood Information") or any information contained in or derived from the Starwood Information.
Ugh. Now, a question: if you were a prospective owner, developer, or franchisee, wouldn't you be inclined to, oh, we don't know...talk to the folks over at Edition about perhaps making a deal? We would.
We hadn't heard much from the Hilton or Starwood camps since the news broke last week that Starwood was suing Hilton for the alleged theft of "trade secrets" that Hilton used to develop their recently-announced Denizen Hotels brand.
But today, Hilton speaks: the corporation issued a press release acknowledging that they've received a federal grand jury subpoena "requesting documents relating to Hilton's employment of former employees of Starwood Hotels & Resorts Worldwide, Inc. and materials which Hilton returned to Starwood in February of 2009."
These "employees," of course, are Ross Klein and Amar Lalvani two ex-Starwood employees who migrated over to Hilton, allegedly taking sensitive information with them illegally. According to the press release, Klein, Lalvani and "their luxury and lifestyle team" have all been placed on paid administrative leave "pending Hilton's review of the situation."
And the biggie update: "At this time, further development of the Denizen Hotels brand has been temporarily suspended." Oh noes. Probably a good idea for Hilton to take a step back and clean up this mess but could this mean Denizen will end up dead in the water?
The hotel world is in a tizzy today about the lawsuit that Starwood Hotels has filed against Hilton Hotels, Ross Klein, Amar Lalvani and their just-announced new hotel brand Denizen Hotels. Already folks are dividing themselves into two camps: Team Starwood and Team Denizen. We expect t-shirts from Cafe Press to be ready within the hour.
In reading today's article from the Wall Street Journal, which broke the news online last night, we get the rundown of all Starwood's major complaints which allege that Klein and Lalvani stole trade secrets, brand profiles and even other Starwood employees.
The allegations are shocking and scandalous and while we do believe that everyone is innocent until proven guilty, we can't help but wonder what would have happened if Hilton Hotels had just used the rumored name The Quinn in the first place.
That's because Starwood is alleging that the name Denizen Hotels actually comes from a concept called "zen den" which was to be implemented in W Hotels. Zinger. Ouch.
Now, hearing that the brand Denizen may have come from "zen den", it makes the name seem less bizarre and a little more sensible than "denizen of the world" which is what Denizen Hotels have been touting since its announcement. But stolen goods are never cool. What about just using the name The Quinn instead? We liked that better!
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When Ross Klein left Starwood for Hilton, eyebrows were raised and when Hilton's new luxury brand, Denizen, was launched in March, we got a peek at what Klein had been cooking up at his new offices all that time: a sleek, chic boutique concept aimed at the "globally conscious modern traveler." You know, a new brand meant to compete with the Thompsons, Morgans and W's of the world.
And guess who wasn't so happy about that? W.
And guess what Starwood's doing about it? Suing.
According to a Bloomberg report, Starwood filed a complaint in federal court in New York claiming two former Starwood executives hired by Hilton Ross Klein and Amar Lalvani stole information about the W hotel brand to develop the Denizen concept.
It's official. Last night in Berlin, Hilton Hotels unveiled their new luxury boutique lifestyle brand (otherwise known as Project Global21) spearheaded by former W Hotels godfather Ross Klein: Denizen Hotels.
After much speculation, many rumors, and a fairly serious amount of hot gossip about the name of the new chain, our money was on "The Quinn". After all, when we visited TheQuinn.com last night (prior to the announcement), we were redirected to the ProjectGlobal21.com.
But! Denizen it is, and the brand was introduced to attendees of the International Hotel Investment Forum in a less-than-standard way that emphasizes the new chain's apparent focus on sustainability: "a reconstructed vision of the brand experience" was presented in a shipping container for visitors to walk through.
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The Cosmopolitan resort development in Las Vegas: the future home of Hilton's Project Global21?
The tip line has been on fire this week as the excitement mounts for Hilton's unveiling of their new boutique brand, which has been referred to only as Project Global21 up to this point. We know the big announcement is coming sometime tomorrow (March 10th), with the news hitting the International Hotel Investment Forum in Berlin first.
We've been going back and forth on the upcoming brand's name for a while: we'd heard Quinn initially, then a few commenters brought a couple more possibilities to the table ("Vox" among them) but we'd never really agreed on anything. And as we wait for the official word, some anonymous tipsters have swooped in to give us the inside scoop.
In a city full of pretty young things, the older ladies and gentlemen of the NYC hotel scene have, one by one, been succumbing to the pressures of keeping up with the younger, newer, hipper kids like the Thompsons and the AB Hotels.
The Plaza had a facelift; The Pierre is having a bit of work done but the Waldorf-Astoria seemed to be the one holdout, determined to age gracefully without renovations and updates. But as it turns out, not taking the Joan Rivers route was hurtin' old lady Waldorf; she wasn't lookin' so hot.
We have done lots of speculating about the name which, by the way, we still have not agreed on but now we have a date on which we can expect our questions about Hilton's rumored new boutique brand to finally be answered.
Hotels Mag reports that Hilton plans to unveil what they're still calling "Project Global21," a "global lifestyle brand to complement its existing luxury brands," on March 10 at the International Hotel Investment Forum in Berlin.
Ross Klein, formerly of W Hotels, had only this to say about the new brand:
"Project Global21 is a junction where business meets pleasure forever redefining how guests stay and play. Our hotels will be born modern through smart design, cultural character and sensitive service delivery-- ever enhancing how guests live now and how guest will live in the future."
Which, really, is some standard PR speak that tells us not so much. Here's everything we do know about the brand so far: it's supposed to target "local influencers." It's aimed at well-traveled, tech-savvy guests with high disposable incomes (does anyone have a high disposable income right now?) and it will be all about design and innovation. Whatever Klein's been cooking up over there could be something along the lines of W or a Morgans property or it could be something totally new and different that the hotel scene hasn't had a taste of yet.
We'll keep you posted if we hear any more rumors (names included!) Speaking of which, if you've got any gossip, send it our way.
Today, Hilton Hotels announced the launch of a new brand, an extended stay chain called Home2 Suites. Before we continue, we'd just like to take a moment to address the name: we all get it, right? Cause an extended stay hotel is supposed to feel like your second home it's home two. Creative.
Not to hate on it, but had we been in on some of those concept development meetings, we would have thrown Home: The Remix out there. Just saying.
[UPDATE: For the record--According to Hotels Mag Hilton PR people say they have "no information" on this name. But they didn't deny it either.]
There's been a ton of speculation surrounding Hilton Hotel's new boutique brand, headed by former W Hotels man, Ross Klein. So far, the project has been going by the code name Global21. While we thought that brand's unveiling would happen in January, we found out last week that March is probably the more likely time.
Still, we're gonna keep the speculating, gossiping and general rumor mongering alive until then. Starting with this interesting tidbit we received from a very anonymous tipster:
It's going by the code name Global 21, and will probably end up being named The Quinn.
Hmmm...The Quinn. That's interesting. We have no idea what it refers to though.