Hyatt Denied Bid to Resume Control of Curaçao Resort; Property Continues to Operate Under New Name and Management Company
Continues to Operate Under New Name and Management Company
WILLEMSTAD – Santa Barbara Hospitality, N.V., a hotel investment group, today announced that a Curaçao court has denied a bid by Hyatt Corporation and Hyatt Curaçao, N.V. (“Hyatt”) to resume control of the former Hyatt Regency Curaçao Golf Resort, Spa and Marina.
Following a hearing on Friday, December 21, 2012, the Trial Court of Curaçao issued an order today stating that it would not grant Hyatt the injunctive relief it was seeking. The brand management company lost its bid to resume managerial control of the luxury resort from which it was removed on December 15, 2012.
On December 15, 2012, Santa Barbara Hospitality, N.V. removed Hyatt as manager of the resort, renamed the property as the Santa Barbara Beach & Golf Resort, Curaçao, and installed Benchmark Hospitality International (“Benchmark”) as the property manager. The owner had terminated its management agreement with Hyatt on November 21, 2012, but Hyatt had refused to leave the property.
“The owner is pleased that the court denied Hyatt’s extraordinary request to resume control of this property,” says William A. Brewer III, partner at Bickel & Brewer and counsel for Santa Barbara Hospitality, N.V., owner of the resort. “In our client’s view, Hyatt had proven that it was incapable of managing this property in accordance with the terms of the management agreement. The owner will now aggressively press forward in arbitration and all available forums to pursue damages for Hyatt’s alleged breaches of the management agreement.”
Benchmark now manages the 350-room luxury resort. Most employees are retaining their jobs and maintaining their current rate of pay, original start date and accrued vacation. All current reservations and event bookings are being honored without change.
“We are glad Hyatt’s bid to resume control of the resort was rejected,” says David Maxfield, a representative of Santa Barbara Hospitality, N.V. “In the owner’s view, for more than two-and-a-half years Hyatt piled up staggering financial losses and failed to manage this resort in accordance with the terms of the management contract, so we were stunned by Hyatt’s demand that it be permitted to resume control of the property.”
Today’s court decision was closely followed by the local and the international hospitality community. It follows a week of high-profile developments at the luxury resort and, according to the owner, validates the actions taken to remove Hyatt as manager of the property.
The owner claims that under Hyatt’s management, the resort has fallen short of budgeted revenue projections by tens of millions of dollars. For example, Hyatt missed revenue projections by almost $12 million in 2011, and occupancy rates that year were 44 percent – approximately 22 percent lower than expected, the owner claims. Both revenue and occupancy are also lower than projected in 2012, according to the owner.
The owner alleges that Hyatt failed in its duties and responsibilities with regard to the service, training and supervision of the resort’s personnel. Hyatt failed in the budgeting and forecasting for the resort, and also the sales and marketing of the property, the owner claims.
A recent report from Smith Travel Research (STR) indicates that over a 12-month period (from November 2011 to October 2012), occupancy at the resort was only 53 percent – compared to almost 80 percent for the properties against which it competes. The Average Daily Room Rate at the resort for 2012 is $182.65 – compared to $238.58 for its competitors, according to STR.
Bickel & Brewer was joined in representing Santa Barbara Hospitality, N.V. by Arnold Huizing of Huizing & Huizing.
About Santa Barbara Beach & Golf Resort, Curaçao:
The property is a luxurious beachfront resort located in the Santa Barbara Plantation area of Curaçao. The resort offers stunning views of the Caribbean Sea, three pools, a private spa, tennis courts, two marinas, and an 18-hole Pete Dye championship golf course. It is a unique luxury resort destination on Curaçao, an island in the southern Caribbean Sea situated off the Venezuelan Coast. The island is recognized as one of the “best kept secrets in the Caribbean,” featuring acclaimed diving, outdoor activities, fine dining, and many cultural attractions. Guests may call + 5999-8401234 from any international location, 1-855-590-2266 from the U.S., or 840-1234 locally regarding existing or new reservations. Visit santabarbararesortCuraçao.com.
About Benchmark Hospitality International:
Benchmark Hospitality International is a leader in the management and marketing of resorts, conference centers, hotels, and Personal Luxury Resorts & HotelsSM. The independent company, launched in 1980, is a worldwide organization operating properties in major metropolitan and resort destinations. Benchmark's international headquarters is located in The Woodlands, Texas, near Houston. Benchmark Hospitality is also a founding member of the International Association of Conference Centers. The company's eastern regional office is in New Jersey, western regional office is in Washington, with international offices in Tokyo, Japan, and Santiago, Chile. Visit benchmarkhospitality.com.
About Bickel & Brewer:
Founded in 1984, Bickel & Brewer has earned a reputation as one of the most successful law firms in the United States practicing exclusively in the field of complex commercial litigation and dispute resolution. With offices in New York and Dallas, Bickel & Brewer represents a wide spectrum of industry leaders – from entrepreneurs to Fortune 500 corporations – facing the most challenging of legal issues. Visit Bickel & Brewer at bickelbrewer.com.