Marriott ousted as managers of Waikiki Edition Hotel

Benjamin Rafter
Benjamin Rafter

By Tim Sakahara - bio | email

HONOLULU (HawaiiNewsNow) - The owners of the Waikiki Edition Hotel have changed its name to The Modern Honolulu.  So what's in a name? In this case a pretty big fight.

The Marriott calls it a hostile takeover saying its managers were ousted in the middle of the night, the locks changed and employees were forced to agree to new management or be dismissed.  All despite the fact the Marriott had 29 years left on its contract.

"This is a deeply unfortunate, regrettable and illegal event. The owner and its partners raided the hotel literally under cover of night, forcibly taking over the property and threatening our employees with dismissal unless they immediately agreed to a change of management. We will aggressively and vigorously pursue all remedies against the owner and its partners in this illegal act," said Arne Sorenson, Marriott's President and Chief Operating Officer.

The Marriott is demanding control of the property back. It also plans to seek "substantial damages" from the hotel's owner and its partners for "their conduct in damaging the operation and reputation of the hotel, Marriott and the Edition brand."

The owners, M Waikiki LLC, claim the Marriott has mismanaged the hotel, failed to get name recognition and lost millions of dollars.

"The owner believes that Marriott has failed in its management of this resort as well as the delivery of the Edition brand concept," said William A. Brewer III, Bickel & Brewer and lead counsel for the owner.  "As a result, our clients brought in new management in the belief that doing so would better protect their investment."

In response to the Marriott's demands and threat of lawsuit, the owner's attorney says the transition occurred at the least disruptive time for employees and guests.

"Despite having lost on a similar issue in a federal lawsuit involving another owner, what Marriott fails to appreciate is that it is nothing but an agent for owners, whose interests they are supposed to represent," Brewer says. "As such, they can be terminated at any time when, in the owner's opinion, they fail to protect the owner's interests. We believe Marriott has a distorted view of the law and the power owners possess to protect their rights, property and interests."

Aqua Hotels and Resorts have already taken over management duties.  About 300 employees, except senior level management, have been offered a job with the new management with the same wages and benefits.

"The owner of the hotel terminated the agreement with the former operator and asked us to come in and manage the hotel," said Benjamin Rafter, President and CEO Aqua Resorts.  "We have to get the hotel out there. We have really deep Hawaii ties so we need to get it out there a little bit more in the community. Get it out there is some of the traditional Hawaii channels."

The managers at Aqua are confident they can succeed where the Marriott did not, which primarily is keeping the owners happy.

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