Dispute over hotel management

A big Australian-headquartered hotel business is disputing action by New Zealand's largest hotel owner over the management of five hotels here - including one in Rotorua.

Simon Wan, chief executive and managing director of StayWell Hospitality Group, indicated there were issues between his organisation and the Auckland-headquartered CP Group run by the Pandey family.

Mr Wan has just issued a statement explaining the situation.

Issues are understood to concern management the five previously run by StayWell and branded Park Regis Auckland, Leisure Inn Rotorua, Leisure Inn Wellington, Park Regis Picton and Park Regis Dunedin. CP has taken over all those properties.

"Australian based international hotel management company StayWell Hospitality Group received notice on Friday 8 May 2015 from companies controlled by New Zealand based CP Group (CP Group) that CP Group has purported to terminate StayWell Hospitality Group's management agreements for CP Group's five trans-tasman properties," StayWell's statement said.

"StayWell Hospitality Group and CP Group established a relationship in October 2013 where StayWell took over the management of CP Group's five trans-tasman properties.

"Simon Wan, CEO and Managing Director of StayWell Hospitality Group says StayWell has elected not to seek an injunction stopping CP Group's purported termination of the management agreements but intends instead to commence legal proceedings to seek to recover damages from CP Group.

"We believe that CP Group has failed to meet its obligations under the management agreements and we are pursuing our claims through the legal system in New Zealand to protect our reputation and brand image," the statement said.

That follows a statement issued this month by CP Group's Terry Ngan, CP's new director of hotel operations, who told how five New Zealand hotels previously run by StayWell Hospitality Group were now under CP Group's management. CP Group owns hotels around the world.

Mr Ngan said it decided to take over management of all its smaller hotels and run them in-house effective immediately.

"Plans for the future, some of which have commenced implementation, include acquiring more hotels, refurbishment at the hotels, new hotel names, branding and a new website.

"All existing management and staff employed by CP Group will continue under their same employment terms and conditions," Mr Ngan said.

"CP Group has recently expanded its hotel operational management resources and expertise to operate the smaller hotels it owns and other smaller hotels it acquires.

"Its larger hotels including several new buildings currently under construction will continue to be managed by third party hotel chains," he said.

CP struck issues with the new Sofitel So in Auckland's CBD, opposite the Britomart, where scaffolding was removed when changes were being to the ex-Reserve Bank building on Customs St East.

The conversion of that block is only partly completed, well past the previously announced opening date.