Marriott Says It’s Given Back Control of Waikiki Edition Hotel in Hawaii

Marriott International Inc., the largest publicly traded U.S. hotel chain, said it was given back control of the Waikiki Edition hotel in Hawaii, which the property’s owner seized earlier this week.

A New York state judge ordered M Waikiki LLC, which took over the hotel on Aug. 28, to return control to Marriott by 8:30 p.m. East Coast time today, Bethesda, Maryland-based Marriott said in a statement.

M Waikiki LLC took over management of the property after filing a lawsuit on May 26 claiming the hotel “has been a failure due to gross mismanagement and Marriott’s inability to successfully launch the Edition brand,” according to a May 31 statement by Bickel & Brewer, the hotel owner’s law firm. M Waikiki LLC’s management agreement with Marriott has 29 years remaining, according to the operator.

“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,” Ed Ryan, Marriott’s general counsel, said in today’s statement.

Travis Carter, a spokesman for Bickel & Brewer, didn’t immediately return a call seeking comment on the order.

Disputes between hotel operators and property owners have increased during the last two years, according to James Butler, a partner at Los Angeles-based law firm Jeffer Mangels Butler & Mitchell LLP.

“The fundamental frustration of owners is that operators aren’t bringing in bottom-line results,” Butler said in an Aug. 29 telephone interview. “When brands expanded in the last years, many of them outstripped their resources and their talent pool. It really increased the divide between owners and operators.”

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net