Normally, we’re all about bringing you news of exciting new hotel openings, updates, expansions – but what of the hotels that haven’t made it through the economic storm? Despite the influx of good news on the travel front – destinations bouncing back (hello, Mexico), beaches seemingly unscathed along the Gulf, spurts of hotel openings in cities across the globe (New York’s 2010 hotel boom alone brings over a dozen newbies) – there is also the sad reality that some great properties are on the fast road to ruin. Herewith, the ugly truth . .
The Elbow Beach Hotel, Bermuda, a Mandarin Oriental property, partially closed (it shuttered its original main building) in November 2010 but will continue to operate with 98 luxury rooms. Some 160 employees were laid off as a result of the downsize.
The Ritz-Carlton Lake Las Vegas closed in May 2010. "It's nothing the hotel did. It's a simple lack of business and a decline in the tourism industry," said Ritz-Carlton spokeswoman Vivian Deuschl.
W Boston Hotel and Residences only opened in November 2009 but is already in the hole an estimated $100-$500 million and filed for bankruptcy protection in April. They claim the debt is due to slow sales of their high-priced condos.
Riviera Hotel, Las Vegas, went Chapter 11 in July and will be taken over by Starwood Capital. Reasons include inability to compete with newer Las Vegas resorts. Riviera Hotel is slightly secluded on the north end of the Strip.
Sea Island Resort, Georgia (operated by Sea Island Co.), filed for bankruptcy in April. The company, owned by the same family for decades, plans to sell its assets to Oaktree Capital Management LP and Avenue Capital Group. Business for now will go on as usual at the resort. Financial troubles arose after the resort spent hundreds of millions on renovations and real estate development then couldn’t sell the residential properties.
Four Seasons Great Exuma, Bahamas, was put into receivership over three years ago and finally closed its doors last May. The resort was the largest employer in Exuma so its demise led to the loss of over 500 jobs.
Fontainbleau Las Vegas filed for bankruptcy in June 2009 even before it officially opened. Investor Carl Icahn purchased the property in 2010 and is looking into plans to complete the resort in hopes of an economic turnaround.
Sawgrass Marriott, Florida, the venue of Tiger Woods’ public apology, filed for bankruptcy in March 2010 stating the economic conditions as the source of financial woes.
Wyndham Drake Oak Brook, Chicago, closed in October 2009. The suburban hotel suffered from a lull in bookings, mismanagement by its former owner, and supposedly couldn’t afford to pay off its mortgage.