Last summer, the SunPost ran a story detailing the poor treatment of employees by the management company, General Hotel Management Ltd. (GHM) of the Setai Hotel on South Beach. The article (Setai Hotel Exposed! While Models and Celebs Luxuriate, Foreign Workers Suffer By John Zur) detailed the bad treatment that Indonesian employees, part of a GHM student exchange program, endured when they worked for the Setai for a year. These workers were brought over from Asia and were forced to sleep four to a room in bunk beds, were charged $300 to $600 per month. They were forced to work long hours, many double and triple shifts per week under the threat of termination and then deportation. And then there was the tip shortening, the verbal abuse and the high turnover of staff in management positions.
Once the story ran in the SunPost and online on the SunPost website, the emails and comments the SunPost received from ex and current Setai staff was unprecedented. Hundreds of former employess weighed in on their own personal experiences and on those of friends.
In fact this single story had the owners of the Setai, sit up and take notice. They hired a private investigator to see what was going on at the hotel.
This past weekend, almost a year later, the Setai Owners LLC took back their property in a hostile middle-of-the-night takeover. Blaming poor performance and bad occupancy rates, GHM was summarily fired and the Trevi Luxury Hospitality Group, based in Dallas, is now running both the hotel and the condo’s.
The Setai Owners LLC also filed a request for arbitration proceedings against GHM, claiming missapropriated payments in the millions. (this comes from Lehman’s request for arbitration to essentially end GHM’s management contract):
“In 2010-2011 alone, the Hotel’s Rooms Department incurred excessive expenses of over $2 million, its Administrative and General Department incurred excessive expenses of approximately $2.3 million, and its Marketing Department incurred excessive expense of approximately $3.3 million. Had GHM not negligently expended those amounts – and, instead, operated more efficiently – Owner would have realized an additional $7.6 million in incremental profit.”
The attorney for Setai Owners LLC, William A. Brewer III stated: “The owner believes that it was in the best interest of the project to exercise its rights, install new management at the resort and initiate the arbitration,”
Despite all of this, representatives of Setai Owners LLC remain optimistic.
“We will work with GHM to ensure an orderly and seamless transition to new management for the benefit of all interested parties,” says Richard Siu, the representative of Lehman Brothers Holdings Inc., responsible for the Setai Resort & Residences.
But the ousted President and Director of GHM, Hans R. Jenni states otherwise:
“Representatives from Lehman Brothers arrived at the hotel with armed guards and off duty sheriff officers in uniform in the early morning hours on March 31st. They informed us that they were taking over the property and that General Hotel Management (GHM) was no longer welcome on the property. These actions took us by surprise, as we had no prior indication they were intending to do this, nor were we under the impression that they were unhappy with our performance. We had just achieved the second best financial performance year since the inception of the hotel, not an easy accomplishment in the current economic environment.”
Trevi Luxury Hospitality Group and Lehman is trying to put the Setai condo owners concerns at rest. In the statement Trevi and Lehman put forth yesterday, Anthony Barsati, vice president of Lehman Brothers Holdings Inc. said, ” “Our goal is to improve the profitability, management and overall ‘Setai experience’ for hotel guests and condominium owners. We believe that under the right management, this property has limitless potential.”