Dispute Heats Up Between Banyan Tree Hotels and Al Areen Holding Company Over Bahrain's Most Exclusive Hotel, the Former Banyan Tree Resort at Al Areen; Banyan Tree Claims the Owner Took Over the Resort Resulting in Inconvenience and Confusion to Guests and Associates / April 2010

Hotel Online News for the Hospitality Executive

Dispute Heats Up Between Banyan Tree Hotels and Al Areen Holding Company
Over Bahrain's Most Exclusive Hotel, the Former Banyan Tree Resort at Al Areen

Banyan Tree Claims the Owner Took Over the Resort Resulting in Inconvenience
and Confusion to Guests and Associates

By Rebecca Torr, Gulf Daily News, Manama, BahrainMcClatchy-Tribune Regional News

April 19, 2010 --AN out-of-court settlement appears unlikely in a dispute at one of Bahrain's most exclusive hotels.

Banyan Tree Hotels and Resorts (BTHR) is taking Al Areen Holding Company, which owns the luxury property in Sakhir, to court for allegedly breaching its management contract.

Banyan Tree Holdings group managing director Ariel Vera revealed the dispute had even led to some staff being paid late.

"Several staff didn't get paid on time," he admitted to the GDN yesterday.

The dispute centres on payments that should have been made to BHTR by Al Areen in return for managing the property.

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Banyon Tree Announcement

Banyan Tree Hotels & Resorts announced that it has terminated with immediate effect, its management contract for the Banyan Tree Al Areen resort in Bahrain.

Banyan Tree issued on 8 April 2010 the notice of intention to terminate as a further step to its earlier petition in March to wind up Al Areen Holding Company, the owner of the resort, for continuing breaches of the management contract.

Termination of an agreement usually requires a notice with a transition period of two weeks, but Banyan Tree’s termination of the management contract is with immediate effect. This follows further breaches of the agreement by the owner, who also took over the resort on 9 April resulting in infringements on our brand rights, and inconvenience and confusion to our guests and associates, travel partners and suppliers. We therefore have no choice but to immediately cease our involvement with the resort.

Notices have been sent to all staff, suppliers, travel agents and wholesalers, and hotel guests, that Banyan Tree will not be responsible for anything happening at the resort, nor for any loss, damage, costs, expenses or other claims arising from any stays, transactions with, visits to or usage of the services and facilities of the resort.

Banyan Tree will be taking legal action against Al Areen for this further violation of the management contract. In the meantime, its current priority is to mitigate the negative effects of the immediate termination on its associates, guests, business partners, suppliers, and travel agents.

Banyan Tree Hotels & Resorts no longer takes reservations for the resort. If you wish to book accommodation here, please contact the hotel at +973 17 84 5000.

It claims that it has not received a settlement that should have been paid in instalments during December, January and February.

However, three BTHR employees -- one Indian, one Canadian and a Turk -- are now subject to a travel ban after a complaint was filed against them at the Public Prosecution.

"The Public Prosecution is making an investigation and depending on the outcome will or will not file charges," said Mr Vera.

"We are not aware why they are being held by the ban."

Neither Al Areen nor its lawyers have the power to impose a travel ban, which is imposed by relevant authorities with proper jurisdiction, Al Areen Holding Company CEO Tariq Al Jowder said.

He said Al Areen had nothing to hide and he would be happy to have the dispute decided by the courts.

The hotel has since been renamed the Al Areen Palace and Spa after BTHR pulled out of its Hotel Management Agreement (HMA).

Al Areen has since threatened to launch legal proceedings of its own against the luxury resort operator, claiming it had not fulfilled its obligations in its contract.

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