The Wall Street Journal: Marriott Loses Trendy Waikiki Hotel

August 29, 2011 — The Wall Street Journal reports that, in a "dramatic move," the owners of the Waikiki Edition in Hawaii installed new management and changed the signs and locks on their property overnight to reflect a new name, the Modern Honolulu. The report states that the "changes were made in spite of a contract that allows Marriott [International Inc.] to run the hotel as an Edition for 30 years." 

William A. Brewer III, counsel for M Waikiki LLC, the hotel owner, told the Journal that his clients have the legal right to terminate the contract, alleging that Marriott is mismanaging the property. 

The Journal reports that, in a legal filing in May in New York Supreme Court, M Waikiki claimed Marriott "had failed to make the flashy new Edition hotel brand a success, resulting in the Waikiki location underperforming relative to its market." The owners said further that occupancy for the fourth quarter of 2010 had been 30% — well below the 62% rate predicted by Marriott. 

To read the full report, click here. 

Reuters: Marriott, Schrager Sued by Hawaii Hotel Owner

May 30, 2011 — Reuters reports that owners of the Waikiki Edition have filed suit against Marriott International Inc. and hotelier Ian Schrager, Marriott's partner in creating the Edition brand. The lawsuit, filed by Bickel & Brewer on behalf of M Waikiki LLC, "seeks to end a 30-year management agreement and recover losses and overruns tied to the 353-room beachside hotel." 

"We believe empty promises were made in connection with the launch of Edition — and the damage done to our clients has been further compounded by Marriott's inability to effectively manage this property," said William A. Brewer III, partner at Bickel & Brewer and lead counsel for M. Waikiki LLC. "Based on the breaches of its contractual obligations to our client, we are seeking to remove Marriott from the management of the Hotel." 

To read the full report, click here.