Castillo Grand LLC won a US$44-million award against Starwood Hotels & Resorts Worldwide’s subsidiary Sheraton Operating Corporation Friday when New York State Supreme Court Justice Alan Scheinkman found Sheraton committed multiple breaches of its management contract with the owners in regards to the former St. Regis Hotel and Resorts in Fort Lauderdale.
According to a news release, the crux of the dispute hinged on the absence of “St. Regis-style” brand standards in the design and construction of the hotel, “caused in large part by the revolving door of senior leadership within the Starwood organization.” By the time the hotel opened in 2007, it was millions of dollars over budget, two years behind schedule and the Florida real-estate market was at historic lows, the release said.
The court also found that, in an attempt to coerce Castillo into paying a US$3-million license fee, Sheraton plotted “a surprise attack” by sending a notice terminating the management contract unless the fee was paid within five days. Sheraton walked off the property, Castillo brought in Ritz-Carlton as the new flag, and the court found Sheraton’s termination to be wrongful and held them liable as such.
Weekly performance results were released today by HotelNewsNow.com’s parent company STR for the Canada and U.S. regions.
Canada: The Canadian hotel industry reported positive results in the three key performance metrics for the week of 13-19 November. In year-over-year measurements, the Canadian hotel industry’s occupancy ended the week with a 0.1% increase to 62.9%, its average daily rate rose 1.2% to CAD$124.47 (US$120.52), and its revenue per available room increased 1.3% to CAD$78.25 (US$75.76).
U.S.: The U.S. hotel industry also experienced increases in all three key performance metrics during the week of 13-19 November. In year-over-year comparisons, occupancy rose 4.1% to 59.4%, ADR increased 3.7% to US$102.11, and RevPAR finished the week with an increase of 7.9% to US$60.63. Among the top 25 markets, Seattle reported the largest occupancy increase, (+18.8% to 74%); Miami-Hialeah, Florida, ended the week with the largest ADR increases (+15.3% to US$157.04); and Seattle saw the biggest boost in RevPAR (+33% to US$89.82).
Louvre Hotels Group has formed a partnership with Jin Jiang Inn Company in which Jin Jiang Inn customers will be able to make reservations for Campanile hotels in France, and Campanile customers will be able to reserve rooms in Jing Jiang Inn hotels in China. This reservations process will be facilitated by an alliance of the websites of the two trade names and the sharing of reservation channels, according to a news release.
The partnership covers 15 Campanile hotels in the five French cities most frequently visited by Chinese tourists (Paris, Bordeaux, Lyon, Marseille and Nice) and 15 Jin Jiang Inn hotels in the three Chinese cities most popular with French tourists (Shanghai, Xi’an and Beijing).
Each hotel will display both trade names at its entrance; the hotels will be equipped with Chinese-language brochures and signs; the telephone assistance for guests will be available in Chinese; and the Campanile breakfast buffet will include Chinese foods and dishes.
This partnership also will enable Louvre and Jin Jiang Inn to share management experience and expertise between the alliance’s key representatives.
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Pillar Hotels & Resorts and its affiliate W2001 EHR Management will terminate its management contracts at seven hotels in Pennsylvania at the end of the year, according to The Pittsburgh Business Times. As many as 420 employees have been told they'll be out of a job by the end of the year, although many could stay on with a new management company.
The hotels are the Four Points in Greensburg, Pennsylvania; Holiday Inns in Uniontown, Clarion, Indiana, Beaver Falls and York, Pennsylvania; and a Courtyard Bensalem near Philadelphia. The hotels will remain open, the newspaper said.
"A new management company has not been named yet. However, it is anticipated that the new management company will solicit employment applications from the existing active employee base," Jolynda Ward, senior VP of Pillar Hotels, told the newspaper.
“The hotels remain under an existing franchise agreement and will retain the Holiday Inn flag," Sherry Telford, a spokeswoman for InterContinental Hotels Group, told the newspaper.
Irving, Texas-based Pillar Hotels manages 233 hotels in 37 states.
Some industry analysts are predicting that Interstate Hotels & Resorts is preparing to go public, according to a story in The Washington Post.
The company has made six major acquisitions in the past 11 months and brought in new blood, including Jim Abrahamson, who officially assumes the role of CEO on 1 December 2011, and CFO Julie Pangelinan.
Interstate is owned by a joint venture of Thayer Lodging Group and China-owned Jin Jiang International Hotels.
“There’s no doubt there will be a liquidity event down the road, whether it’s an (initial public offering) or new investor,” Chairman Thomas Hewitt told the newspaper.
Taking Interstate public is not on Abrahamson’s to-do list, but he said the company will “always look at opportunities. We’ve been public in the past and it remains one of our options in the future,” the newspaper reported.
Compiled by Jason Q. Freed.