Marriott Lawsuit against Franchisee for Shelter Use

Marriott International has initiated legal action against Pride Hotel LLC, alleging a breach of contract after the franchisee repurposed a New York City property into a shelter for migrants. The complaint, filed in federal court, asserts that Pride Hotel violated its franchise agreement by failing to operate the property in the Jamaica neighborhood of Queens as a dual-branded Aloft and Element hotel, as stipulated. Instead, the hotel operators entered into a lucrative contract with the City of New York to house migrants and asylum seekers. The lawsuit claims that Pride Hotel not only neglected to inform Marriott of its intentions but also failed to remove the hotel chain's trademarks and branding prior to converting the property into a shelter. Marriott is seeking over $2.6 million in damages, citing "significant harm" caused by the franchisee's actions. Pride Hotel has not yet responded to requests for comment regarding the lawsuit. The situation comes amid a broader context where New York City hotels have received substantial taxpayer funding for housing migrants. Reports indicate that the city has spent over $4.88 billion on the migrant crisis in recent years, with approximately $1.98 billion allocated for housing. The average cost for hotel rooms accommodating migrants is around $156 per night, with some exceeding $300, highlighting the financial implications of the city's response to the ongoing crisis. Internal documents reveal that while some funds have been directed to city shelters, about 80% of the accommodations utilized are motels or inns, underscoring the reliance on private establishments to address the influx of migrants.