SANYA Huayu Tourism, a mainland Chinese conglomerate with hotel, retail and property assets, is suing InterContinental Hotels Group (IHG) for RMB 200 million (US$31.8 million) in damages, over claims that the hotel operator mismanaged its property on Hainan Island.
Huayu alleges that IHG's China subsidiary, InterContinental Holiday China, progressively racked up more than RMB 200 million in losses after assuming management of the Sanya Huayu Crowne Plaza Hotel in 2005, forcing the hotel owner to suspend the contract halfway into the 12-year term.
According to Li Tao, head of Hotel Business at Huayu, InterContinental Holiday China “failed to provide professional hotel management services in accordance with the contract”. “The (IHG) management team fell far below Huayu's expectations and its management of the hotel was a complete mess,” he added.
Huayu also accused InterContinental Holiday China of “a series of dishonest behaviors such as high-price procurements, intentionally concealing information, alteration of hotel RGI data, and deliberately causing damage and loss of large equipment” during its tenure.
In a report by the South China Morning Post, IHG was quoted as saying that it was unaware of any legal action by Huayu, and that the claims of mismanagement were unfounded.
"All accusations in Huayu's so-called statement are completely groundless,” IHG said in a statement. “During the years of co-operation, every decision relating to operation and procurement was discussed by both Huayu and IHG. IHG has always strictly abided by the law and has been completely honest."
Keith Barr, IHG's CEO for Greater China, did not respond to attempts by TTG Asia e-Daily for an official comment from the hotel chain.