Hotel Online Press Releases
The Ritz-Carlton Hotel Company, L.L.C. Terminates Management Agreement at Hotels in Aspen, Houston, New York City and Washington, D.C.;
Chronic Breaches of Contract and Interference Cited
Atlanta, GA - (Aug. 2, 1997) - Effective immediately, The Ritz-Carlton Hotel Company, L.L.C. has terminated its management agreements at four hotels owned by Los Angeles-based partnerships controlled by Sheik Abdul Aziz Bin Ibrahim Al Ibrahim.
The affected hotels are: The Ritz-Carlton managed properties in Aspen, Colo., Houston, New York and Washington. "Ritz-Carlton took this unprecedented action due to chronic and prolonged breaches of contract by the hotel owners' representatives, including: non-payment of management fees and cost reimbursement amounts in excess of $4 million, refusal to make capital improvements and repeated attempts to interfere with operating decisions of Ritz-Carlton," said Horst Schulze, president and COO of The Ritz-Carlton Hotel Company, L.L.C.
"The action is intended to preserve the integrity and reputation of Ritz-Carlton, as well as the value of our image and name throughout the world for our owners and investors." The termination means that Ritz-Carlton will discontinue all affiliation with the four hotels, including the removal of the Ritz-Carlton name, its management and reservation systems and all marketing services. "We regret having to take this action, but it was clear to us that the impeccable services and products associated with Ritz-Carlton could no longer be guaranteed to our future guests," continued Schulze. "We will never compromise the standards for which we are renowned and that our guests, our owners and investors have come to expect. Despite our best efforts, the owners of these hotels have refused to abide by the terms of the operating agreements. We had no choice but to act on behalf of our guests, our employees, our investors and owners who should receive only the best from Ritz-Carlton." "It is a great tragedy since these hotels have won many fine dining and hospitality awards since their opening," said Schulze.
Ritz-Carlton has established an 800 number, available 9 a.m. to 6 p.m. EDT, to answer questions from the general public. That number is 800/326-4658.
As a management company, Ritz-Carlton does not own any of the properties in its worldwide hotel group. It expects to open several hotels throughout the world, including Dubai, Shanghai, Puerto Rico, Kuala Lumpur and Las Vegas within the next two to three years.
Since its incorporation in 1983, Ritz-Carlton has won every award the hospitality industry and consumer groups can bestow. It is the only company in the hospitality industry to win the coveted Malcolm Baldrige National Quality Award. Recent honors include: "Top Hotel Chain-United States," 1997, Gourmet Magazine; "Best Hotel Group," 1997, Tatler Magazine; "Top Luxury Hotel Group," 1997, Business Travel News.
The Ritz-Carlton, Aspen is owned by Savanah Limited Partnership; The Ritz-Carlton, Houston is owned by New Remington Partners; The Ritz-Carlton, New York is owned by N.Y. Overnight Partners, L.P.; and The Ritz-Carlton, Washington, D.C. is owned by D.C. Overnight Partners, L.P. All of the hotels are represented by Al Anwa USA Inc. of Los Angeles.
All statements and further inquiries from the media will be handled by The Ritz-Carlton Corporate Public Relations Department, Office of Karon Cullen, at 404/237-5500 ext. 382 or via fax 404/261-7116.