Owner Removes Hyatt from Curacao Resort; Hyatt Vows to “Protect Its Rights”

By: Caribbean Journal Staff - December 15, 2012

Above: the Hyatt Regency Curacao property

By the Caribbean Journal staff

Hotel investment group Santa Barbara Hospitality says it has removed Hyatt as the manager of its Curacao resort property, renaming it as the Santa Barbara Beach & Golf Resort.

The company said it had terminated its management agreement with Hyatt and Hyatt Curacao, installing Benchmark Hospitality International to operate the resort.

Hyatt said that Santa Barbara came to the resort “late Friday evening” and informed the manager on duty that it was taking immediate action to remove Hyatt as the hotel’s manager.

“This is an exciting development for the resort, its employees and the thousands of international guests we soon expect to welcome,” said David Maxfield, a representative of Santa Barbara Hospitality. “We believe this property is now poised to become one of the world’s premier luxury destinations.”

William Brewer III, a partner at Bickel & Brewer, an attorney for Santa Barbara, said the property’s owner “believes that Hyatt failed in discharging its responsibilities to the owner of this resort.”

“The owner, therefore, exercised its right to terminate Hyatt and install new management,” he said. “This has been an orderly and peaceable management transition — designed to ease any disruption to employees or guests.”

Santa Barbara claimed that the resort had missed revenue projections by almost $12 million in 2011, with occupancy rates last year “approximately 22 percent lower than expected.”

“The owner alleges that Hyatt failed in its duties and responsibilities with regard to the service, training and supervision of the resort’s personnel, budgeting and forecasting, and sales and marketing of the resort,” Brewer said.

Hyatt disputed the owner’s legal ability to remove it as manager, saying it had begun arbitration with Santa Barbara last month.

In a statement issued Saturday, Chicago-based Hyatt, which had been managing the resort since 2010, said it denied “that the owner had the legal right to remove it as manager of the property in this manner.”

Hyatt said it had commenced an arbitration last month which was still underway, seeking a declaration of the parties’ rights under the management agreement.

“The owner, however, as elected to take this precipitous action rather [than] acting as set forth in the management agreement to resolve matters in the arbitration,” Hyatt said. “Hyatt Curacao NV will be taking action to protect its rights under the agreement and expects to have control of the resort restored.”

The company said it was “concerned about the impact of the owner’s disruptive action on the resort, its guests and employees.”

It also said that while it “does not believe that Owner has acted properly, until Hyatt has an opportunity to obtain appropriate relief from legal authorities, Hyatt is not in a position to take reservations for the property or to respond to questions about existing reservations.”

Benchmark said it would offer employment to “most current hotel staff members, who will maintain their current rate of pay, original start date and accrued vacation,” according to a release.

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