Recession Pits Luxe Hotels' Owners Vs. Operators

By Kevin Spak,  Newser Staff
Posted May 26, 2009 2:13 PM CDT
A hotel is seen in Honolulu in this file photo.   (AP Photo)
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(Newser) – The recession is igniting new hotel wars: not battles for customers, but between owners of luxury hotels and the properties’ operators, the New York Times reports. The owners are often struggling to keep up with big debt payments, hindered by a more than 16% average drop in hotel bookings across the sector. But operators are loathe to cut rates or amenities, saying that doing so will diminish a property’s brand.

In the case of one California Four Seasons, the operators have hired security to keep the owners out. The hotel’s owners want to replace the operator on the grounds that it’s mismanaged the property. “There are things that brand managers do that really annoy owners,” explains one professor of hospitality management—and, one lawyers notes, recent rulings in their favor have emboldened the owners to take action.