Business as usual at the Claremont Hotel, despite declaring bankruptcy
on February 4, 2011
Despite speculation that its days were numbered after the Claremont Hotel Club and Spa filed for bankruptcy Tuesday, the luxury hotel’s owners said that hotel staff, management and operations were not going to change. In a statement, the owners said the hotel “will continue to provide the same uninterrupted level of luxury service and experience to guests, resort members and other customers.”
The immense hotel has been a symbol of luxury in the Bay Area for nearly a century. From hosting concerts by Count Basie and Louis Armstrong decades ago to having Brad Pitt and Angelina Jolie use its 20,000-square-foot spa this past summer, this hotel has been more than just a place for guests to spend the night.
In 2007, shortly before the economic recession hit, Morgan Stanley acquired the Claremont along with seven other luxury hotels for $6.6 billion, according to the San Francisco Chronicle. But now, with a flagging economy and ebbing tourism, the 279-room hotel has been difficult to keep out of debt.
By this year Morgan Stanley owed more than $1.5 billion on its eight hotels, and it foreclosed on them in January. A group of affiliated real estate investment firms called CNL-AB purchased the hotels at an auction last week.
Shortly after CNL-AB’s acquisition, the group filed for bankruptcy for the Claremont and four other hotels. According to the statement by CNL-AB, the goal is for them to be able to restructure the hotels’ debt and “improve operations.”
“It’s debt restructuring,” said Adrian Larick, director of sales and marketing for the Claremont. “We’re not ‘bankrupt.’”
On Thursday, it was business as usual at the hotel and spa. The parking lot was filled and the tennis courts were bustling. “Hotels are bought and sold all the time,” Larick said. “As far as those of us that work here, nothing changes.”
Pyramid Hotel Group took over management of the Claremont in 2007, and Larick said that as long as Pyramid stays, which it plans to do, the Claremont will run as usual. As far as staff, clients and guests are concerned, Larick says the transfer from Morgan Stanley to CNL-AB will feel seamless.
According to CNL-AB, the future looks positive. Michael Barr, the portfolio manager at Paulson and Co., one of the affiliates of CNL-AB said in the statement, “We and our partners are excited to be owners of some of the world’s most desirable resorts and look forward to providing new sponsorship to maximize the value of these irreplaceable assets.”
In addition to the Claremont, CNL-AB also filed for bankruptcy for the La Quinta Resort & Club in the Southern California desert, the Grand Wailea Resorts Hotel & Spa on Maui, the Doral Golf Resort & Spa in Miami, and the Arizona Biltmore.
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