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Starwood walks from Westin Auckland

Westin Auckland Lighter Quay

 BY JAMES WILKINSON

Starwood Hotels and Resorts has decided to terminate the management agreement for The Westin Auckland Lighter Quay from Friday July 29.

In a statement released on Monday (Jul 25), Starwood said it had been “working closely with the Receivers, Tim Downes and Richard Simpson of Grant Thornton New Zealand Ltd, in regard to the on-going dispute with the owners of certain rooms at the hotel”.

“However, that dispute has not been able to be resolved and Starwood Hotels and Resorts has accordingly been unable to continue its operations as normal.

“This is an unfortunate situation for all involved and its associates and guests remain the priority for The Westin Auckland,” the statement said.

Recently, hotel owner and investor Graham Wilkinson had won the support of the owners of 116 of the 172 units in the hotel and had begun selling rooms for NZD$99 per night through his own reception desk in the foyer of the hotel.

Wilkinson said his operation, named Hotel Viaduct Harbour, was charging NZD$99 because not all facilities – including porter services and charge-backs from the restaurant and bar – were available to guests staying the 116 rooms under his management.

The Westin Auckland Lighter Quay was originally developed by Nigel McKenna, with the units sold off to individual investors while retaining management rights. McKenna’s companies, including Melview and Lighter Quay Hotel Management Limited, went into receivership last year with Korda Mentha appointed as the receiver.

Last week, ownership of the units managed by Starwood changed hands to a Singaporean fund and as such, a new receiver was appointed, being Grant Thornton.

Wilkinson told HM he was confident of working with the new receivers to establish some new room rates and before long, appoint a new management company to run the upper-upscale hotel.

He said the new receiver appointment “may provide the chance of a breakthrough for a sensible commercial solution based on values determined through arbitration”.

“We have written to the new owners and the new receiver and offered to immediately engage in an arbitration process,” he said. “This will determine the true market value of the assets so that all stakeholders can be treated fairly and the hotel can be re-integrated and open again as one of Auckland’s best 5-star properties.

“We are optimistic that the receivers will be prepared to engage in a market based process so that the whole sorry saga can be resolved in a manner that at last enables those who invested in room ownership in good faith to receive a fair return on their investment.

“If not, I know that they are resolved to continue with their robust and growing hotel operation, which will provide them with a better return on their rooms than they have ever had since the hotel was built.”

Wilkinson said he didn’t hold any grudges against Starwood while two hotels were operating under the same roof.

 “Certainly we undercut the Westin’s rates, but it’s a competitive world out there,” he said. “It was a somewhat unique situation to have two competing hotels operating under one roof, but we never had any animosity to the Westin brand and did our best to work harmoniously with them so that guests of either hotel operation could enjoy their stay.

“It is regrettable that Westin has decided to leave,” he said.

Starwood said it “will continue to explore opportunities to introduce The Westin and its other brands back into the Auckland and New Zealand markets.”

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