Marriott International spent much of its time this summer putting out fires sparked by customers, meeting planners, and even the owners of some of the hotels it manages. First there was the lawsuit filed earlier this year against Marriott, Wyndham, and Starwood properties for not disclosing resort fees far enough in advance for guests to be able to factor them into their purchasing decisions. While only a dozen or so Marriott-affiliated hotels charged the resort fees, the chain decided to handle the issue by doing away with the add-on charges altogether. "We fazed them out over the course of the summer," says Roger Conner, vice president, communications, with Marriott International in Washington, D.C. "We want to address any area that guests take issue with; the lawsuit made us aware that this was one of them."
Then the company had to contend with a complaint filed with the Department of Justice alleging discrimination against the Midwest Federation of American Syrian-Lebanese Clubs, one of its long-standing customers. The Des Moines Marriott, which had faxed a signedto the Midwest Federation on September 5, 2001, to host the group’s annual conference in August this year, revoked its offer less than a week later--on Sept. 11--and refused to reconsider its decision throughout the following week.
On August 15 this year, the parties reached a settlement that requires Marriott to pay $100,000 to endow a scholarship that will be administered by the Midwest Federation; pay $15,000 to be a corporate sponsor for this summer’s convention; issue a formal written apology to the group for its actions; and provide nondiscrimination training to its employees, something the hotel chain has had in place for some time, according to Marriott spokesperson Lucy Slosser. The Assistant Attorney General for Civil Rights says, "Arab Americans who have, like all Americans, been victimized by September 11, should not be subjected to the added injury of unlawful discrimination. We are delighted that Marriott agreed to rectify what happened and make sure it does not happen again."
Slosser, who says it was simply an economic decision to pursue another piece of business, adds, "We sincerely regret that this misunderstanding occurred, and we want to stress that there was no intent to discriminate against this group." The Midwest Federation ended up holding its 2002 meeting, with 300 attendees, at the Detroit Marriott property in Troy, Mich.
But there are still a few sparks left to extinguish. Marriott is still contending with a lawsuit filed against it in April by CTF Hotel Holdings, Inc., a Hong Kong-based company that owns about 60 of the hotels Marriott manages. The suit alleges that Marriott overcharged for goods and services it received from third-party contractors and kept the difference; and that it accepted bribes from suppliers who wanted to provide goods and services to Marriott-managed hotels. According to a report in the Wall Street Journal earlier this summer, among CTF’s claims are that Marriott was "secretly soliciting, diverting and fraudulently concealing kickbacks from Molloy Corp.," a third-party audiovisual supplier used at Marriott-managed properties. A U.S. District Court judge in Delaware temporarily halted the suit in May, pending the outcome of a parallel case now in arbitration. Marriott denies the allegations.
Then in late August, yet another lawsuit was filed against Marriott International by Strategic Hotel Capital, which owns several Marriott-managed properties. Specifically, the suit charges that the company fraudulently concealed profits from three California hotels owned by Chicago-based SHC. The suit seeks unspecified damages and the right to terminate management agreements on the hotels. Marriott also denies these allegations. In a Hotel Business report on August 22, a Marriott spokesperson is quoted as saying the SHC suit may actually be "something of a ploy to better position its portfolio for sale." If true, this may mean that more lawsuits will be on the horizon, not just for Marriott, but for other hotel management firms as well.