Diamond Resorts will convert the Modern Honolulu from a hotel to a timeshare apartment building and has notified 30% of the staff, 78 workers, that their jobs will be eliminated in the next 30 days. This is just the latest development for a property that began its life as the first Edition hotel and has been in the headlines almost from the start.
The news was announced by the workers' union, Unite Here Local 5, and later confirmed by the Associated Press.
Las Vegas-based Diamond Resorts bought the Modern in April 2018 for a reported $225 million.
Following the union announcement, Diamond Resorts issued a statement saying the company did not take the decision "lightly" and the terminated employees would receive severance packages.
"We want to make sure they have support as they transition to new careers, and we will be here for them through that process as we convert the property into a vacation ownership resort," the statement read.
The layoffs affect multiple departments, including housekeeping, banquets, pool, in-room dining, reservations, and food and beverage. The union filed federal unfair labor practice charges with the National Labor Relations Board after notification of the pending job cuts.
Diamond Resorts' portfolio of managed or affiliated properties includes 21 timeshares and hotels.
The 353-room Modern Honolulu opened in 2010 as the Waikiki Edition, but owner M Waikiki soon became embroiled in a legal battle with Ian Schrager and Marriott, the developers of the new hotel brand. M Waikiki claimed that the partners had failed to provide promised design and marketing services, leading to cost overruns and delays that caused the hotel to open 15 months after its July 2009 target date. Then in the early-morning hours of Aug. 28, 2011, M Waikiki unilaterally terminated its management contract with Marriott, renamed the hotel the Modern Honolulu and appointed Honolulu-based Aqua Hotels & Resorts as the new operator. Marriott eventually sued and was awarded an undisclosed sum for breach of contract.