Singapore-based management company, General Hotel Management (GHM), has been speaking out about the takeover by hotel owners at The Setai South Beach in Miami amid accusations of mismanagement and the loss of its management contact.
According to Mr Hans R Jenni, owner representatives of The Setai South Beach arrived at the hotel and informed GHM they were taking over the property, on Saturday, March 31, 2012.
Hans R. Jenni, president and director of GHM, is quoted as saying:
“Representatives from Lehman Brothers arrived at the hotel with armed guards and off-duty sheriff officers in uniform in the early morning hours on March 31st. They informed us that they were taking over the property and that General Hotel Management (GHM) was no longer welcome on the property. These actions took us by surprise, as we had no prior indication they were intending to do this, nor were we under the impression that they were unhappy with our performance. We had just achieved the second best financial performance year since the inception of the hotel, not an easy accomplishment in the current economic environment.”
Mr Jenni said that he was unable to comment on specific allegations and that he was indiscussions with lawyers to ensure that Lehman Brothers complies with the requirements of the management contract in place.
GHM has been replaced by the Dallas-based Trevi Luxury Hospitality Group, which is led by Atef Mankarios, a former CEO of St. Regis Hotels & Resorts .
A unit of Lehman Brothers Holdings, Setai Owners LLC, who owns the Setai, a property featuring a 40-story tower with three swimming pools, a spa and several restaurants and bars. Apparently Lehman Brothers Holdings also has begun an international arbitration against GHM, charging that the management company violated terms of a March 2000-dated management agreement.
A filing at the International Court of Arbitration of the International Chamber of Commerce in Paris apparently states –
“In 2010-2011 alone, the Hotel’s Rooms Department incurred excessive expenses of over $2 million, its Administrative and General Department incurred excessive expenses of approximately $2.3 million, and its Marketing Department incurred excessive expense of approximately $3.3 million. Had GHM not negligently expended those amounts – and, instead, operated more efficiently – Owner would have realized an additional $7.6 million in incremental profit.”
Since the opening of The Setai South Beach in August 2005, GHM said the hotel has been recognised as one of the top hotels in the world and the founder of Aman Resorts, Adrian Zecha, non-executive chairman and director of GHM, said: “GHM is an industry leader with tremendous brand recognition in our industry…. It was GHM that created the Setai concept and experience, leading the hotel to achieve numerous industry recognitions.”
GHM currently manages nine properties with a further eight under development.