What This Minor Vs. Marriott Lawsuit Reveals About the Hotel Biz
Skift Take
Minor is a step closer to getting its case against Marriott heard in a Thai court, probably a nightmarish scenario for hotel management companies if only because it bares open fault lines.
Marriott International has failed to halt a lawsuit against it in a Thai court filed by Minor International. The parent company of Minor Hotels Group advised investors of the outcome on Thursday.
Minor, however, is still unable to proceed with the legal case in Thailand, pending another outcome later this month of a temporary injunction to block it, which Marriott Thailand managed to obtain in Singapore.
Minor is suing the U.S. hotel giant for alleged non-performance of the JW Marriott Resort & Spa in Phuket, Thailand, which it fully owns. The hotel has been managed by Marriott since its opening in December 2001.
The case is riveting for the Asian hotel industry and beyond.
It's not because of the amount being claimed by Minor, which at $19 million (571 million baht) is a pittance, but because it opens a can of worms in the public arena on issues that have surfaced as a result of global chains' consolidation.
Chief among these issues is whether the asset-light model of these companies is sustainable. As the behemoths, with their rain-shower of brands, fiercely compete for management fees and guest loyalty, a question on conflicts-of-interest, and of the real costs to hotel owners of being in the system, arises.
An example of this can be seen through a Minor complaint, which it outlined to investors, that Marriott is forcing the JW Marriott Phuket
