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. 

The Wall Street Journal: Hawaii Hotel Sues Marriott

May 26, 2011 — The Wall Street Journal reports that the owners of the "stylish but unsuccessful" Waikiki Edition in Honolulu have filed a lawsuit seeking to end their management agreement with Marriott International Inc. In the lawsuit, filed by Bickel & Brewer on behalf of client M Waikiki LLC, the owners claim Marriott has "failed to make a flashy new hotel brand a success." 

The lawsuit also named Ian Schrager, Marriott's partner on the Edition brand, as a defendant in the suit, "alleging that the famed hotelier has been uninvolved in the project."

The report states, "The owners now allege Marriott was responsible for construction overruns, as well as cost overruns after the hotel began operating. The owners say the hotel has lost $6 million since it opened in October 2010, with occupancy just around 30% in the fourth quarter of 2010, far below the 62% occupancy Marriott predicted in August 2009."

To read the full report, click here.