In the continuing battle between the owner of the Eden Roc Hotel in Miami Beach and Marriott International Inc., the Appellate Division, First Department, recently held that Marriott's management contracts with hotel owners are personal services contracts which Marriott cannot impose on hotel owners.1 In a subsequent ruling issued by the trial court in response to Marriott's refusal to vacate the property, the court cleared up any confusion as to the continuing rights and obligations of the parties by declaring that the hotel's owner "has the authority to remove and eject Marriott Renaissance as manager of the Eden Roc hotel forthwith or on whatever timetable it chooses…"2 Marriott recently announced that it intends to cease managing the property, effective July 11.
These rulings have great significance to hotel owners, especially those operating in the luxury segment, because they confirm that New York law is in line with other jurisdictions that permit a hotel owner to protect his asset by terminating an underperforming hotel manager at any time, notwithstanding the stated term of the management agreement.
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