Marriott Sued Over Management of Eden Roc Hotel
Apr 4, 2012, 11:04 am
#1
Original Poster
Join Date: Dec 2004
Programs: United 1K, MR Plat, SPG Plat
Posts: 804
Marriott Sued Over Management of Eden Roc Hotel
Searched and didn't see this posted. According to this article in USA Today:
http://travel.usatoday.com/hotels/po...8/1?csp=Travel
The group that owns the Eden Roc are suing MI for $75 million alleging gross mismanagement and argues that Marriott's discount bookings (bolding mine) resulted in the hotel failing to generate close to the $30 million in profit projected for 2011.
Interesting...
Regards,
RIP...
http://travel.usatoday.com/hotels/po...8/1?csp=Travel
The group that owns the Eden Roc are suing MI for $75 million alleging gross mismanagement and argues that Marriott's discount bookings (bolding mine) resulted in the hotel failing to generate close to the $30 million in profit projected for 2011.
Interesting...
Regards,
RIP...
Apr 4, 2012, 1:10 pm
#2
Join Date: Feb 2012
Programs: Marriott Rewards Platinum, SPG Gold, United 1K
Posts: 16
And thus explains why Marriott Rewards is having trouble getting the BOGO Certs reinstated.
Apr 4, 2012, 6:41 pm
#3
FlyerTalk Evangelist
Join Date: Jul 2001
Location: Some place in this wonderful world (usually at 39,000 ft in seat 1C)
Programs: CO Gold Elite / NW Gold Elite
Posts: 13,747
Searched and didn't see this posted. According to this article in USA Today:
http://travel.usatoday.com/hotels/po...8/1?csp=Travel
The group that owns the Eden Roc are suing MI for $75 million alleging gross mismanagement and argues that Marriott's discount bookings (bolding mine) resulted in the hotel failing to generate close to the $30 million in profit projected for 2011.
Interesting...
Regards,
RIP...
http://travel.usatoday.com/hotels/po...8/1?csp=Travel
The group that owns the Eden Roc are suing MI for $75 million alleging gross mismanagement and argues that Marriott's discount bookings (bolding mine) resulted in the hotel failing to generate close to the $30 million in profit projected for 2011.
Interesting...
Regards,
RIP...
Apr 5, 2012, 4:25 am
#4
Join Date: Dec 2004
Location: AUS
Posts: 690
You can find the complaint on the court's site by searching for index number 651027-2012.
It's interesting that the hotel owners (Eden Roc LLLP) are accusing (Marriott's) Renaissance Hotel Management Company LLC of, among other things, derogation of the standards for the Renaissance brand. But mostly they want more profits.
Interesting parts of the complaint (keep in mind these are allegations by Eden Roc LLLP):
Nowhere does the complaint specify exactly what the plaintiffs consider abuse of Marriott Rewards, but they imply in 120 that the rates were too low.
That implies an occupancy rate of 90.9%.
It's interesting that the hotel owners (Eden Roc LLLP) are accusing (Marriott's) Renaissance Hotel Management Company LLC of, among other things, derogation of the standards for the Renaissance brand. But mostly they want more profits.
Interesting parts of the complaint (keep in mind these are allegations by Eden Roc LLLP):
13. From the outset, the Renaissance brand of hotels was presented to Plaintiff as Marriott's boutique and lifestyle brand, capable of competing with Starwood's lucrative W Hotels.
63. In violation of the Management Agreement, Renaissance flooded the Hotel with discounted and below-market-rate room bookings, causing 80% of the transient room nights sold at the Hotel over the past three years to be sold at discount rates.
64. Renaissance did not achieve and could not achieve the maximization of Hotel profits by selling less than 20% of the Hotel's rooms at the retail rate.
65. Renaissance exacerbated the problem by implementing and abusing its associate, military and Marriott Rewards program incentives and discounts, through which Renaissance further reduced room rates and deprived the Hotel of revenue.
66. This wildly flawed approach has emasculated the reputation of the Hotel.
64. Renaissance did not achieve and could not achieve the maximization of Hotel profits by selling less than 20% of the Hotel's rooms at the retail rate.
65. Renaissance exacerbated the problem by implementing and abusing its associate, military and Marriott Rewards program incentives and discounts, through which Renaissance further reduced room rates and deprived the Hotel of revenue.
66. This wildly flawed approach has emasculated the reputation of the Hotel.
86. A Renaissance employee stole nearly $285,000 from the Hotel's accounts by issuing checks to phony vendors.
90. During the first quarter of 2011, Renaissance inexplicably extended to a guest a credit of $350,000 that it has never collected on.
97. in 2011 the spa only generated $780,000 in total revenue, amounting to $3.75 per occupied room.
120. The Notice of Default required Renaissance to cure the defaults by: (ii) increasing the wholesale rates for the Hotel to rates that are at least 80% of the Hotel's retail rates; (iv) increasing the government/military and associate rates for the hotel to at least $200 per room night on average or cancelling those programs in their entirety; (v) increasing the reimbursement for the Marriott Rewards program to at least $200 per room night on average; (vi) revamping its cleaning and maintenance programs to ensure the cleanliness of the hotel;
132. Plaintiff was left to suffer the stigma associated with the dilapidated Renaissance hotel brand, and monetary damages cannot compensate for that reputational injury.
Apr 5, 2012, 7:18 am
#5
Join Date: Jan 2002
Location: Washington, DC, USA
Programs: UA MM, MB LifeTit
Posts: 1,831
So, a bunch of people invested in Florida real estate with visions of great success and fabulous wealth, but it didn't turn out that way. This has to be one of the oldest stories around.
Apr 5, 2012, 8:02 am
#6
Join Date: Jun 2004
Location: DCA
Posts: 888
Dupe post - sorry - on a train with crappy internet
Apr 5, 2012, 8:04 am
#7
Join Date: Jun 2004
Location: DCA
Posts: 888
Boy, nothing says "it was once hip but ain't anymore" more strongly than the article citing Elizabeth Taylor as a past guest.
Hard to imagine that MI unilaterally implemented a revenue management strategy without the ownership group having a seat at the table. I know nothing about management contracts with hotels, but it seems very unlikely that they created a rate structure on their own.
Hard to imagine that MI unilaterally implemented a revenue management strategy without the ownership group having a seat at the table. I know nothing about management contracts with hotels, but it seems very unlikely that they created a rate structure on their own.
Apr 5, 2012, 8:11 am
#8
Join Date: Aug 2006
Location: DCA / WAS
Programs: DL 2+ million/PM, YX, Marriott Plt, *wood gold, HHonors, CO Plt, UA, AA EXP, WN, AGR
Posts: 9,388
120. The Notice of Default required Renaissance to cure the defaults by: (ii) increasing the wholesale rates for the Hotel to rates that are at least 80% of the Hotel's retail rates; (iv) increasing the government/military and associate rates for the hotel to at least $200 per room night on average or cancelling those programs in their entirety; (v) increasing the reimbursement for the Marriott Rewards program to at least $200 per room night on average; (vi) revamping its cleaning and maintenance programs to ensure the cleanliness of the hotel;
USG per-deim hotel max for Miami Beach is between 105 and 152 a night depending on time of year.
Apr 5, 2012, 8:47 am
#9
A FlyerTalk Posting Legend
Join Date: Aug 2002
Programs: UALifetimePremierGold, Marriott LifetimeTitanium
Posts: 71,136
"13. From the outset, the Renaissance brand of hotels was presented to Plaintiff as Marriott's boutique and lifestyle brand, capable of competing with Starwood's lucrative W Hotels. "
2 things:
* I thought Marriott had another brand it was starting/touting as equivalent to W hotels.
* The people suing obviously didn't do their homework if they thought Renaissance was trendy.
Cheers.
2 things:
* I thought Marriott had another brand it was starting/touting as equivalent to W hotels.
* The people suing obviously didn't do their homework if they thought Renaissance was trendy.
Cheers.
Apr 5, 2012, 8:59 am
#10
Join Date: Mar 2005
Location: St. Petersburg, FL
Programs: Bonvoy Lifetime Titanium Elite
Posts: 453
Apr 5, 2012, 9:17 am
#11
Join Date: Sep 2010
Location: San Francisco Bay Area
Posts: 5,825
Eden Roc must have had much lower occupancy than expected if they have to accept USG rates to fill up rooms...
I think I am actually the problem... I had a reservation at the Waikiki Edition, look what happened. (Marriott resolved this issue to my complete satisfaction, and we will be staying at the Waikiki Beach Resort instead.)
I have a reservation in May at this property, and look what happens...
I was eyeing these two properties (tell me they are trendy Sharon!), so probably just switch to one of them: Winter Haven or Blue Moon
Apr 6, 2012, 8:23 am
#12
Join Date: Mar 2011
Location: FL
Programs: MR PLT, HH Blue, DL, CO, Avis Preferred, Hertz President Circle, National Emerald, IHG, Omni GLD
Posts: 23
I stayed there a couple of years ago; they did a good job on the renovation. I did stay under the government rate of $107 per night but although infrequent is not outside the norm for Miami Hotels. I have stayed at the JW Marriott, JW Marriott Marquis, South Beach Marriott, Conrad Miami, Doubletree Surfcomber (When it was a doubletree) and a bunch more for the same price. I see it as a way to fill up rooms without having to dicount the rates for the general public. Being that aside from my government job I am also a consultant for a management company - that is exactly what I suggest to be done in order to maximize occupancy and revenue. What I think happened was that whenever the last renovation occurred the numbers that were presented to the group were different, they invested a lot of money renovating the resort, real estate market went belly up and their investment considerably depreciated in value, people had less money to spend therefore that $400 per night customer was very elusive and the rates had to be reduced to attain occupancy to a little over 200. Have in mind this hotel was also closed over a year fro renovations so I understand that this people has lost a ton of money Marriott's fault? not necessarly. In regards to the employee theft, I am sure that was replaced by the insurance as that is something my company has experienced.
Apr 6, 2012, 7:24 pm
#13
Join Date: Jul 2003
Location: CT/ Germany - Ich spreche deutsch
Programs: UA 1K, Bonvoy LTTE, HH Dia, HY Expl
Posts: 4,657
I just recently stayed at the Eden Roc for the second time and would hate to see it loose it's association with Marriott. The rates I've seen haven't exactly been cheap but they are in no way near what the W South Beach is getting. (the rates at the W are mind boggling IMHO but then again it has a better location and is closer to the action) Would be interesting to compare the rates of the Eden Roc to those of the Fontainebleau next door.
Apr 7, 2012, 10:17 am
#14
Join Date: Oct 2009
Posts: 236
Not surprising given that the best deal of my life was at this hotel. Priceline (the regular site, not the name your own price) had regular rooms there the week before Christmas two years ago for $62/night. Cheapest rate was like $229 on Marriott.com. Called Marriott so they had to match the $62 less 25%.
Apr 8, 2012, 9:32 pm
#15
Join Date: Dec 2010
Programs: Hilton Diamond, Marriott Titanium, Radisson Gold, Hyatt Globalist, M life Gold, IHG Spire
Posts: 918
Not surprising given that the best deal of my life was at this hotel. Priceline (the regular site, not the name your own price) had regular rooms there the week before Christmas two years ago for $62/night. Cheapest rate was like $229 on Marriott.com. Called Marriott so they had to match the $62 less 25%.
The part about the spa I disagree with. They should go look at Las Vegas, where some of the strip hotels convert less than 10% of stays into casino gambling.
The general complaint is interesting, though. Every manager faces the choice of cutting rates to fill the rooms, or holding the line and leaving rooms empty. 20/20 hindsight is easy.
I wonder, does anyone know what Marriott reimburses for award stays? Is it really low? The Eden Roc is a Cat 7.
(I suspect the lawsuit is posturing to get out of a contract early.)