Marriott sues franchisee for converting hotel into shelter for illegal aliens — lawsuit claims willful breach of contract

Marriott International Inc. filed a lawsuit against a franchisee hotel in New York City after it allegedly converted the property into a shelter for illegal aliens without the brand’s permission.

According to the complaint, Pride Hotel in Jamaica, New York, “willfully breached” the franchise agreement by entering into a contract with the city in 2023 to house illegal immigrants. The New York Times reported that more than one in five New York City hotels is being used to house illegal aliens.

'Even if it were possible, it would likely take many years.'

“Marriott and Pride Hotel entered into the Franchise Agreements such that Pride Hotel would operate a dual-branded Aloft and Element hotel property,” the lawsuit, filed Aug. 5, states. “But instead of fulfilling its obligations under the Franchise Agreements, Pride Hotel and the other defendants never opened the Hotels as Marriott properties and, instead, entered a lucrative agreement with the City of New York to use the Hotels to house migrants and asylum seekers without Marriott’s permission and in violation of the Franchise Agreements.”

Marriott also accused Pride Hotel of failing to remove the company’s trademarks and branding from its building before converting it into a shelter. The hotel brand claimed that “even if it were possible, it would likely take many years” for it to re-enter the market where Pride Hotel is located.

According to Marriott, it was not notified by Pride Hotel when the building’s construction was completed. However, a Marriott employee noticed that individuals “appeared to be moving into” the property in August 2023. Pride Hotel then sent a letter to Marriott requesting that they re-evaluate their existing agreement and instead partner with the city to provide housing to illegal immigrants, the lawsuit read.

Marriott stated that it confirmed that Pride Hotel had already started housing individuals on behalf of the city before it reached out to the company about modifying the agreement. Marriott provided Pride Hotel with a list of requirements to continue forward with housing illegal aliens, but the hotel “failed to respond for over two months,” the lawsuit said.

“During this two-month period, Marriott received photographs from its opening managers showing that people were still living in the Hotels in late October 2023. Though the Hotels were occupied, Pride Hotel did not remit any fees to Marriott as required by the Franchise Agreements,” the complaint stated.

Marriott terminated the franchise agreement in March and noted that Pride Hotel allegedly never paid any of its dues. It is seeking $2.6 million.

New York City signed a $980 million contract with a hotel trade group in 2022 to provide housing to illegal immigrants. The hotels that participate in the program are guaranteed between $139 and $185 per night, regardless of whether the rooms are fully occupied or not, according to a report from the Times.

The city's arrangement has significantly driven up hotel costs in the area. Converting the hotels back to traditional use would require significant and costly renovations that hotel brands may push for the city — taxpayers — to cover.

Additionally, a recent audit released by the New York City comptroller's office found that the city performed poor oversight of its $432 million contract with Rapid Reliable Testing NY LLC, also referred to as DocGo, Blaze News previously reported. In part, the company was tasked with finding shelter for illegal aliens. However, the audit revealed that over just the first two months of the contract, DocGo received $1.7 million in taxpayer funds for nearly 10,000 hotel rooms that sat vacant.

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