Hotel won't resort to lower prices
The management at the Four Seasons Aviara in San Diego is in a dispute with the resort's owners over improving business. Owners don't want to lower prices at the risk of diluting the brand. Joel Rose reports.
The Four Seasons Aviara in San Diego, Calif. (http://www.fourseasons.com/aviara/)
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TEXT OF STORY
Bill Radke: OK, what do you do in this situation? You operate a luxury hotel. Business is way off. Do you drop your rates, or does that just make you look cheap? Today, that argument pits the owners of the Four Seasons Resort Aviara against its managers in a federal court near San Diego. Reporter Joel Rose tells the story.
Joel Rose: The group of investors that owns the Aviara resort accused the Four Seasons of mismanagement and tried to bring in a different operator to run the place. The Four Seasons responded by hiring more security and locking the owners out.
Extreme? Yes -- but not un-heard of:
Gary Vallen: This dispute is a classic argument.
Gary Vallen teaches hospitality at Northern Arizona University. He says luxury hotel chains like the Four Seasons hate to reduce their room rates for fear of damaging the brand, even if that means more empty rooms in the short run.
Vallen: You've got on the other side of the coin an owner of a property who is looking at his own personal needs, which is debt repayment, and he needs revenue everyday.
Vallen says rising vacancy rates just add more pressure to the situation. Still, he says owners and operators usually try to settle their disputes in private, because a prolonged court fight makes everyone look bad.
I'm Joel Rose for Marketplace.
Comments
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From Kingsville, ON, 05/27/2009
Something is missing here - Broadreach recently became majority partner ( Minority partner owns several other FS locations like Nevis & Toronto) -- Broadreach also recently bought majority control of Dolce Mgmt company ... hmmm .... am I the only one who sees a pattern here?
Seems obvious that Boradreach wants BOTH ENDS of the business - owner & manager ... just needs some excuse to break the contract.
I am an owner at the Condo's - watching helplessly.
Greg
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