Capella Fighting for Control of Prestigious Los Cabos Resort

It was announced on Tuesday that award-winning Los Cabos resort Capella Pedregal would become The Resort at Pedregal and that “the resort has ended its affiliation with the Capella brand.”

But Capella Hotel Group doesn’t appear to be going down without a fight.

The press release on Tuesday noted that Bob Holland—who most recently served as general manager at Wyndham Grand Chicago Riverfront—would become interim general manager of the resort, while the management change “will have little to no impact on the rest of the property's renowned staff.”

"Today marks a new chapter in the history of this iconic property," Holland said, via the release. "We extend heartfelt thanks to the resort team for their support working towards making The Resort at Pedregal a success. With many of our continuing team members in place, we will remain the leading destination in Los Cabos, providing the same levels of service and amenities for which we have always been known."

Capella Hotel Group (CHG) apparently isn’t in agreement with this new chapter, on the other hand. The brand released a statement shortly thereafter on Tuesday, decrying the actions of representatives of CarVal Investors (CarVal)—a co-owner of Capella Pedregal—“to seize management of the property as illegal and in breach of CHG’s long-term contract with Hoteles del Cabo, the owner of the property (Hoteles).”

According to CHG, representatives of CarVal arrived at the property at 6:30 p.m. on Monday, Nov. 3, and informed CHG management that it would be taking over the hotel without any prior notification.

“Without any official notification or show of cause letter from the representatives of CarVal Investors, we were informed that CHG management was being instructed to leave the property – this despite Capella Pedregal achieving record-breaking occupancy rates and revenue in the last two years,” said Horst Schulze, Chairman and CEO, Capella Hotel Group, via the statement. “We believe whatever allegations they have are baseless and we intend to promptly seek judicial recognition of our contractual rights.”

Schulze continued: “Capella Hotel Group has a valid and binding contract with Hoteles and CarVal has violated this agreement without reason in a highly unprofessional manner. Our performance for the property is unquestioned and we have no intention to accept a takeover of property operations. This action by CarVal is part of an ongoing dispute between the two owners of the asset and does not reflect on the operation/management of the property by CHG – which by all measures has been highly successful, despite this very difficult situation and a challenging economic environment. It is unfortunate that we have been caught in the middle.”

The Los Cabos resort, which has received the AAA Five-Diamond Award for three consecutive years, has been under extensive reconstruction since Hurricane Odile hit the property in September and is slated to reopen in January. Capella Hotel Group donated $10,000 to kick off fundraising for employees of the resort and their families after the hurricane struck.

Capella Pedregal’s social media accounts have already been deleted.

Source: Travel Pulse