Owners of Marriott Edition Waikiki sue to terminate contract, seek damages

Discussion in 'Marriott | Rewards' started by NYBanker, May 27, 2011.  |  Print Topic

  1. NYBanker
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    NYBanker Gold Member

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    WSJ is reporting that the owners of the Marriott Edition Waikiki are sueing to terminate their long term management agreement and seeking damages.

    They claim Marriott's management incurred significant cost overruns during the development and that they have been running as low as 30% occupancy. They further claim that Marriott nor Ian have lived up to their end of the bargain in creating the Edition brand, and that the hotel has had NOI in the red by about $6mm since opening in q4-2010.

    This hotel isn't in an ideal location, being west of the big Hilton. Having a relatively unknown brand isn't helping...and their prices, right now offering "specials" of $379 for a not-so-well located hotel doesn't strike me as the right approach to maximize revenue.

    Who knows if this suit is a negotiating tactic, or if ownership have really just put their hands up and want to move on.
     
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  2. uggboy
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    uggboy Gold Member

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    Trouble ahead! Really surprising, the brand is new and the owner needs to show some patience and should fine tune the details first before showing off a threatening behavior.:confused:
     
  3. NYBanker
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    Ask reporting the the owner group forced Marriott out overnight "under cover of darkness," installing a different management company. The property is now known as the "Modern Honoulu."

    From wsj, "The owners say the hotel has lost $8.4 million since it opened in October 2010, with occupancy just around 30% in the fourth quarter of 2010, far below the 62% occupancy Marriott predicted in August 2009. The loss projections for the remainder of 2011 were recently increased to $1.9 million from $1.2 million, owner representative Damian McKinney alleged in a letter sent Sunday to Mr. Sorenson of Marriott. Marriott has demonstrated that it is unable to attract an adequate volume of customers and at the [rates] necessary to make the Hotel profitable," Mr. McKinney wrote. "Manager's failure to perform compelled Owner's actions."
     

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