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Guests and Employees Stunned by Waikiki Edition conversion to The Modern Honolulu takeover

Waikiki Aqua hotel war with Marriott Hawaii has Mafia-style element

eTN Staff Writer  Aug 31, 2011

HONOLULU, Hawaii (eTN) - “I’d like to hold onto my job for now, so no comment,” said a hotel employee of the new "The Modern Honolulu" when eTurboNews called the hotel, that just two days ago was known as the Waikiki Edition hotel. On Sunday morning - 2:30 am - the association of owners of the privately-owned 353-room hotel property, Waikiki Edition hotel, performed essentially what felt like a hostile takeover to its employees, demanding that the workers immediately agree to new management or face dismissal. M Waikiki LLC, owner of the Edition, changed all the locks on Sunday and took down the property sign, replacing it with the new name of “The Modern Honolulu.” Until that moment, Marriott International was the assigned management company to the property, with an agreement that has 29 years remaining on the contract. Now, apparently, Aqua is the new management company to take over.

As to why Aqua chose 2:30 in the morning to make the change over, Aqua Hotels and Resorts President Ben Rafter told told a Honolulu news station "ownership chose to do it at 2:30 in the morning" adding "it's sort of a low period for the hotel, so it was the easiest time to do a transition."

In May of this year, M Waikiki LLC filed a lawsuit against Marriott in the New York Supreme Court, stating that Marriott failed to successfully manage the property resulting in an US$8.4 million loss since opening in October 2010. In the fourth quarter of last year, the hotel occupancy was approximately 30%, although Marriott had projected 62% occupancy in a 2009 report. Marriott is demanding that management control be returned to them, citing breach of contract, and is also seeking substantial damages. The Edition hotel brand was conceived by Ian Schrager in partnership with Marriott International as a lifestyle hotel. Ian Schrager's company, rightfully named the Ian Schrager Company, owns, develops, manages, and brands hotels, as well as residential and mixed-use projects.

According to the Hawaii Report, M Waikiki LLC stated that it selected Modern Management Services LLC, an affiliate of Aqua Hotels & Resorts, as the new management company for the Waikiki Edition hotel. M Waikiki LLC has already set up a new hotel website at . Modern Management Services says it plans to offer employment to current hotel staff members, who will maintain their current rate of pay, original start date, and accrued vacation. A handful of hotel management employees were, however, let go.

Benjamin Rafter, president and CEO of Aqua, said: “Our primary focus is ensuring a smooth transition for employees and guests. Based on our experience in the local hospitality community, we believe The Modern Honolulu will become the lifestyle hotel in the islands.”

In a statement released to WSJ, Marriott's COO Arne Sorenson said this is an "illegal event" and confirmed that the owners of the hotel did indeed threaten employees with dismissal unless they agreed to the new management. Marriott said it will "aggressively and vigorously pursue all remedies against the owner and its partners."

In a report by, an hourly employee, wishing to remain anonymous, shared the following:

I work for Edition. The employees here are more than that, we are a tight-knit family. We built that place, we are the face of Edition. We are proud to be part of the Marriott family. We are loyal to Marriott. We said no to the union coming in. It takes quite a bit for employees to trust a company, and turn away union representation. So this situation has really brought us that much closer.

Every day we are meeting up, and talking, waiting to see what is going to happen. This group, Aqua, can't come in and try to ride out what we worked so hard for. We won't just move on, and work our hotel job like nothing happened. WE are Edition. We were trained by the best of the best, and the reviews reflect that.

The rooms aren't the biggest, the beach isn't at your toes, but you will not find more gracious, sophisticated or personalized service anywhere on this island.

We will be back, and we will be ready for business. Don't unpack your bags, Modern, and don't you dare touch that ukulele on the shelf...

In (Mike) Rock we trust.” [Michael Rock is the hotel's General Manager]

Another Waikiki Edition hotel executive, who wanted to remain anonymous – anonymity being key to most comments in this story - told eTN that the hotel guests were stunned. While he/she was waiting to be allowed onto the property today (Tuesday) so he/she could collect his/her personal belongings, a Russian guest came up to him/her and said: "I thought something like this would only happen in Russia.” The now former hotel executive went on to say such methods are unethical and illegal, and bad for the reputation of Waikiki as a civilized tourism destination.

Marriott in Hawaii referred all comments to Marriott headquarters, and Aqua hotels had no further comments.

Waikiki Aqua hotel war with Marriott Hawaii has Mafia-style element
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