Hotel Online 
News for the Hospitality Executive




 
Owners of the Carlsbad, California Four Seasons Resort Aviara
 Move to Oust Four Seasons as Management Company


Claims Four Seasons has Demonstrated Complete Lack of Concern for
 the Owner, Wasting Many Millions of Dollars Each Year
By Penni Crabtree, The San Diego Union-TribuneMcClatchy-Tribune Regional News

May 9, 2009 - Alleging financial mismanagement, the owners of the Carlsbad luxury resort Four Seasons Aviara said yesterday that they have fired the Four Seasons management company and switched to a new branded hotel company.

The group of San Francisco and St. Louis investors that has owned the property since 1998 allege in a lawsuit filed last month that Four Seasons failed to run the property in a "cost-effective and efficient manner."

The resort's owners have named Dolce Hotels and Resorts, a New Jersey company, to manage the Aviara. The property will be managed as an independent luxury resort beginning Monday, according to William Brewer, an attorney for the ownership group.

Four Seasons, a Toronto company, could not be reached for comment.

Brewer, who represents BRCP HEF Hotel Tenant, the limited liability investment group that owns the Aviara, said Four Seasons was notified March 29 that its contract was terminated but Four Seasons has refused to acknowledge the termination.

Meanwhile, the matter is also the subject of a pending arbitration.

Brewer said his clients moved to oust Four Seasons because the company failed to build occupancy and revenue rates, wasted money and awarded management "all manner of bonuses." He said the company has also refused to turn over financial records on the resort to the owners.

"Four Seasons demonstrated a complete lack of concern for the people who own the property and pay the bills," Brewer said. "There were many millions of dollars each year being wasted, and when the owner sought to take control of the finances and direct them in a manner consistent with their best interest, Four Seasons flatly refused."

Jerry Morrison, a San Diego hotel consultant, said such disputes between hotel management companies and property owners are common, particularly when an owner wants to switch to a brand that they think can improve profitability.

He said that while Four Seasons is a premium brand with stellar properties, that doesn't necessarily mean large profits.

"Those types of luxury hotels make far less money than a three or four diamond hotel as a percentage of gross income," Morrison said. "For some owners, its like starving to death with a lion.

"The lion -- the management company -- has all the rights and they get their fees regardless of how the property is doing," Morrison said. "Sometimes an owner won't have enough money left over to cover their debt service."

The Aviara, a Spanish-colonial style resort that is perched on a bluff overlooking the Batiquitos Lagoon and the ocean, is ranked as a four star and five diamond property.

------

Penni Crabtree: (619) 293-1237; penni.crabtree@uniontrib.com

Penni Crabtree: (619) 293-1237;

-----

To see more of the San Diego Union-Tribune or to subscribe to the newspaper, go to http://www.signonsandiego.com/.

Copyright (c) 2009, The San Diego Union-Tribune

Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.




To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.