Update on Starwood Vs. Le Parker Meridien & Parker Palm Springs Law Suit

by John Ollila on January 9, 2013

Yesterday, I wrote about an article on NY Post regarding alleged fabrication of records by both Le Parker Meridien New York and Parker Palm Spring in order to get greater reimbursements from Starwood’s loyalty arm for award nights consumed at these two properties.

spg-vs-parker

Friend gave me a hint to download the actual suit, which I did. It is a nice read about the ins and outs of the alleged misrepresentation that had been going on.

Here’s what had been going on according to Starwood:

The reimbursement rate from Starwood for award nights is dependent of the occupancy rate of the night. When the occupancy rate is below 95%, the hotel gets a set monetary reimbursement that is relatively low.

When the occupancy rate is 95% or higher, the property receives the ADR (average daily rate) for the consumed award rooms. In case of Le Parker Meridien, the reimbursement under the ADR is $200 or more higher than the base reimbursement.

The hotel had falsified records, when it was close to the 95% occupancy rate, in order to get the higher ADR reimbursement rate from SPG.

The suit alleges that both properties had made reservations under fictitious names and faked their check ins to the hotel to get the higher occupancy rate.

The New York property had done this mainly by booking FAM (free travel agent familiarization trips) trips. According to the law suit, they had booked hundreds of of these trips to manipulate the occupancy rate. They had also checked in guests, who had reservations for the night, but never showed up.

It seems that when hotel hits the 95% occupancy rate, they need to produce a ADR document for the Starwood and fax it to the SPG’s office in Ontario (Canada) for processing purposes.

Apparently, there was quite a few employees aware of this falsifications as they had to carry it through by producing these documents. According to the law suit, they were instructed not to discuss it over the email.

Why going public?

It is rather interesting that Starwood didn’t just quietly purge these properties out of their portfolio, but rather launched a law suit that is public.

Maybe they are doing it this way to signal possible other properties, what might happen, if they get caught in similar practices.

Conclusion

Dirty laundry in public? What could be better? I am just waiting for these Parker properties to launch a counter suite.

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  • Jiabao

    Very interesting. Keep us updated.

  • anonymous

    A counter suit will be tough. I was employed at PPS during the entire scam and everybit of it is true. this is just the tip of the iceberg. I feel bad for Adam Glick. He seems like a stand up guy. I don’t think he was aware of any of this but his VP and PPS executive team sure were…such a shame.

  • anonymous

    I worked for LPM for a time and their business practices were extremely suspect. I am not surprised about this development. I hope Steven Pipes gets what he deserves…

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  • Time to Pay

    Former GM PPS transferred to SLS Beverly Hills August 2011, Starwood Investigation begins Feb/Mar 2012 at PPS…. Former PPS GM and other computers are taken apart. Former PPS GM no longer works at SLS June 2012.. thats was a short ride!!!! I guess other prosperous endeavors were on the horizon…uh huh!!!

    • charlatan, niggard, clown

      TM was hired as the GM for the SLS Beverly Hills, he was then promoted to Director of Operations – Hotel at SBE the owner of the SLS Beverly Hills and a few other luxury hotels. Surely, that promotion was based on performance, not the fact that he would or did befuddle his former employer which in fact is a direct competitor with his current employer. One can only imagine, in those earlier days, that the skullduggerous Pipes would chafe at TM’s swagger and even now the later’s star is on the rise while the former stews in hot water. The questions surrounding TM’s departure are relevant, but that is not the most interesting angle of this story…

  • Time not to Pay the PIPEr

    Pipes and all of the rest of those dirty managers still at the Parker PS needs to be dealt with. Message to Glick: Clean house!!!! There is still so much more other than this situation.

  • Former Employer

    For a hotel that grosses easily over $80 million in room revenue alone, $1 million seems stupid for Pipes to defraud. But then again, this is a guy that refuses to provide calculators & post it notes to employees and always pays vendors late so he can accumulate more interest.

    • Another former employee

      When I interviewed there, Pipes told me that he kept tabs on the how much they would spend (for example) on a stapler at the Holiday Inn they own, and that if it was $4.95 instead of $2.95, he’d raise hell.

  • Another Former PPS Employee

    Let’s be honest here. Anyone who worked with “TM” knows that he quaked in his loafers, and just about s*^# his pants every single time that S. Pipes called and/ or came to PS to visit.To try to glorify TM’s position is laughable at best. I can’t wait to see how things roll when all the info about TM’s “PLAYING WITH THE RATES” is divulged to Starwood…and trust me, it will be. They both owe Glick a huge apology for all of this. It is such an embarrassment to the Parker family, and to his Grandfather’s name.

    My guess is that SBE was happy to have another money hungry executive, and with that, they moved him out of their Starwood affiliated property. SBE will be ready to wash their hands of TM soon enough if they have any integrity at all. Hopefully there IS such a thing as too dirty, and hopefully SBE will be the ones to draw the line and toss him.

    Oh, and yes, the comments about their “frugality” with office supplies, etc. it absolutely true too. The management staff had to buy their own supplies if they wanted them…completely ridiculous for a property that was completely debt free.

    • charlatan, niggard, clown

      Quaked and shite? What reasonable person would quake and shite in the presence of the diminuitive Pipes? I suppose if the presence of Pipes meant incessant threats of termination if one did not carry through his criminal machinations, then most any reasonable person would quake and shite in the presence of this toxic, short-sighted malefactor.

      • Yet Another Parker PS Employee

        On the contrary. A reasonable person would never have given in to Pipes in the first place. And funny enough, I would use almost the same description for TM as the words you choose to describe Pipes. There is not, nor has there been one single manager to work under TM that ever felt their position was secure. Most of the line level staff felt unsafe as well. One of the Parker’s ethos is “speak your mind”. Unfortunately that wasn’t applicable when dealing with either of them…

        • charlatan, niggard, clown

          So who was the administrator or executive in charge of the Pipes Project for ill-Gotten Revenue in Palm Springs after TM’s departure? And where are they now?

          • Yet Another Parker PS Employee

            Everyone knows that Dibley ran the puppet show after TM’s departure. By no means am I saying that Pipes is not guilty. He clearly is but TM and LD are equally as guilty. The real tell about the Parker vs. LPM and who is responsible is in the rate per night that was charged to the guest. Not the ADR…

          • charlatan, niggard, clown

            What about SC? I remember him from that horrible reality TV show on Bravo a few years back where the Jack Parker Corporation introduced the world to their version of The Three Stooges (TM, SC and LD). What happened to SC?

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