In Marriott International's second high-profile legal scuffle with the owner of a high-profile beach-resort hotel in a little over a year, the owner of the Eden Roc Renaissance Miami Beach unsuccessfully attempted to boot Marriott's management team from the property early last week.
Marriott said on Oct. 16 that it obtained a temporary restraining order from a New York State Supreme Court judge against hotel owner Key International that will allow Marriott to maintain control of the 631-room hotel. Marriott added that there would be a hearing on the case in mid-November.
Marriott, which has managed the hotel since 2000, is under contract to oversee the property until at least 2030, and in 2006 it was granted options to extend its contract until 2055, said company spokesman Jeff Flaherty.
Key International, which also owns the 234-room South Beach Marriott, did not respond to repeated requests for comment.
"It's inexplicable why ownership and its advisers would have engaged in this outrageous and reckless act that endangered our employees, the hotel and its economic prospects," Marriott International General Counsel Ed Ryan said in the Oct. 16 statement. "It is business as usual at the hotel."
Flaherty declined to comment on whether Key International gave Marriott any specific reasons for the attempted ouster, citing pending litigation.
The management fees at stake are substantial, given the Eden Roc's size, reputation and desirable location in one of the most lucrative hotel markets in the U.S. With the hotel's room rates starting at about $300 a night and topping out at almost $900, its annual gross revenue is estimated to be anywhere from $75 million to $90 million, putting annual management and branding fees in the range of $4 million to $6 million.
The scuffle marks at least the second instance in a little over a year in which the owner of a high-profile beach resort attempted to remove Marriott's management team by force. Last August, the owners of what was then the Waikiki Edition attempted to terminate Marriott's management contract without prior notice and took possession of the 353-room Honolulu property.
The owners at the time alleged that the 11-month-old hotel, the first of a lifestyle brand launched by Marriott and boutique hotelier Ian Schrager, suffered from low occupancy because of bad management and a lack of promotion.
Marriott temporarily took back the hotel before the owner, M Waikiki, filed for bankruptcy, renamed the hotel the Modern Honolulu and brought in Honolulu-based Aqua Hotels & Resorts as its new management firm. Flaherty confirmed that M Waikiki earlier this year paid Marriott to settle the breach-of-contract lawsuit, though he declined to say how much Marriott was paid.
As for the Eden Roc, that hotel has long enjoyed iconic status on Miami Beach's Golden Mile. Built in 1956, the hotel was designed by Morris Lapidus, who was also the architect of the equally iconic Fontainebleau next door. In 2008, Key International, which owns seven hotels in Spain in addition to its two Florida hotels, spent $240 million renovating and expanding the Eden Roc, according to the Miami Herald.
In the early hours of Oct. 14 Key International sent uniformed security guards to storm the hotel but were rebuffed when hotel employees called the police.
Marriott is seeking an undisclosed amount in damages.
As for the South Beach Marriott, the hotelier has managed that property since it opened in 2000.
"We are not aware of any issues with Key International pertaining to the South Beach Marriott," said Marriott's Flaherty. "From Marriott's standpoint, the relationship has gone very well."