Minor International battles Marriott over popular Phuket hotel property in court

Marriott International, the American international hotel company, has failed in its bid to secure an injunction in a Thai court to stop a legal claim filed by the Minor International group.

Minor International (MINT) says that its subsidiary MI Squared Ltd had filed a legal claim in a Thai court against Marriott International and the Thai subsidiary Luxury Hotels & Resorts (Thailand) for 570,605,134 baht. The claim is linked to the JW Marriott Phuket Resort & Spa in Mai Khao, which is owned by MINT. In the statement, MINT accuses Marriott of “acting in bad faith” alleging “serious and repeated breaches of Thai law”, according to ttrweekly.com.

The complaint from MINT alleges that Marriott was openly competing with the JW Marriott Phuket through its operation of competing Marriott-branded hotels in Phuket. Claims are made that the Mai Khao hotel uses its facilities to promote Marriott’s other competing Marriott hotels. Another of the complaints accuses Marriott of forcing the JW Marriott Phuket to accept high volumes of low-margin business through the Marriott’s loyalty program.

According to the ttrweekly.com article, the legal dispute includes allegations that Marriott “misappropriated MINT’s confidential and proprietary information” to promote Marriott’s competing hotels and unlawfully benefit Marriott’s own interests at the expense of MINT. The JW Marriott Phuket remains under Marriott’s management for now but “the operating performance has been poor”.

MINT told shareholders total hotel revenue decreased from 920 million in 2013 to 876 million baht last year. Over the same period, gross operating profit fell from 409 million to 379 million baht.

(It should be noted that many of Phuket’s high-end hotels have suffered a similar revenue fall due to increased competition, competitive pressures pushing room rates down and, especially over the past 12 months, a shift in tourist demographics.)

Marriott International issued a statement to ttrweekly.com following a request for comment.

“Marriott International acknowledges that a subsidiary of Minor International has initiated legal action in Thailand against Marriott and one of its Thai subsidiaries. Marriott reiterates that such claim is meritless and should be heard in confidential arbitration.

Our Thai subsidiary recently secured an interim injunction in arbitral proceedings restraining MINT’s subsidiary from pursuing the action in Thailand. We subsequently agreed with MINT to suspend the Thai proceedings pending the final outcome of our ongoing arbitration. As we intend to comply with our contractual confidentiality obligations, we are unable to provide more information at this time.

We consider JW Marriott Phuket Resort & Spa has performed well compared to the market. The dispute will have no impact on operations at the hotel, which continues to offer guests with world-class service and accommodations, a beachfront location and eleven culinary options.”

SOURCE: ttrweekly.com

PHOTO: marriott.com