Advantage Marriott in Waikiki Edition battle

A New York state judge on Wednesday ordered the owners of the Waikiki Edition to return the hotel to Marriott International’s control as of 2:30 p.m. Honolulu time.

M Waikiki LLC, a subsidiary of the San Diego real estate fund eRealty Fund, had grabbed control of the property on Sunday, quickly rebranded the hotel as The Modern Honolulu and installed its own management as it claimed Marriott grossly mismanaged the property and violated its contractual and fiduciary obligations.

Arne Sorenson, Marriott’s president and chief operating officer, said today, “The past few days have been trying, frustrating and confusing for our guests and employees. We’re glad the judge returned the Waikiki Edition to our hands. We are in the process of resuming operations, quickly returning the hotel and its service to Edition standards.

“We take great pride in providing the gracious, sophisticated, and personalized service that has won Edition accolades from media and guests as a dramatic and dynamic new brand, and we look forward to serving our guests again very soon.”

Ed Ryan, Marriott International executive vice president and general counsel, said, “We took swift legal action following this event and are gratified that a New York court ordered operational control and management of the Waikiki Edition returned to us pursuant to our contract.”

M Waikiki has stated the property has lost a total of US$8.4 million since opening with little signs of change, as during the three-month period of May-July 2011, the hotel sustained operating losses of US$1.9 million. Approximately a week ago, an updated 2011 forecast by the owners projected operating losses for the year of almost US$6.4 million. Meanwhile, occupancy in the fourth quarter of 2010 was only 30%, below a Marriott projection of 62% made a year earlier.