by Marriott International Inc. is suing one of its franchised hotels in Jamaica, Queens, for $2.6 million, alleging it breached its contract with the hotel giant by turning itself into an urban shelter for migrants.
The Pride Hotel was supposed to open to the public last November under Marriott’s Aloft and Element budget hotel brands, according to the complaint filed in federal court. Instead, the hotel and its managers abandoned the agreement with Marriott and began operating as a shelter for migrants, without Marriott’s permission and in violation of their franchise agreement, the complaint says.
The complaint says the Pride Hotel owners also failed to remove Marriott signs and marks or pay franchise fees, further breaching their agreement. Heath Olnowich, an attorney for the Pride Hotel, said the owners declined to comment. The owners include New York City residents Jai Patel, Krishna Mehta, Chandra Mehta, Jagruti Patel and Vipul Patel, according to the complaint. Spokespeople for Mayor Eric Adams, who has overseen the city’s response to the influx of migrants that began in spring 2022, did not respond to a request for comment.
The lawsuit, first reported by the legal news site Law360, comes as dozens of New York hotels have closed their doors to tourists entirely and instead struck deals with the city to become migrant shelters, particularly in the area around the Pride Hotel.
According to The New York Times, more than one in five hotels in New York City are now shelters, driving room rates to record highs. Nearly half of the hotels around JFK Airport in Queens have become shelters, according to an analysis by CoStar, a leading provider of commercial real estate data.
The hotels are among more than 200 emergency shelter sites the city has used to house more than 210,000 migrants since 2022, though most of the new arrivals have left the city’s care system, officials said. Other migrant shelters include former office buildings, sprawling tent camps and houses of worship.
The city’s accommodation contracts have also been a financial boon for some hotels struggling to recover from the pandemic-induced decline in tourism.
New York City now pays up to $185 per night per room for hotels converted into shelters, The New York Times reported in late May. But the city’s payments have sometimes exceeded market rates, which range from $55 to $385 per night, according to a Bloomberg analysis in June 2023.
Other Marriott hotels have also become shelters for migrants, including at least one other site in Jamaica. Lawyers for Marriott International did not respond to a request for comment.
The Pride Hotel is an 18-story building with 283 rooms, according to its most recent certificate of occupancy available to the public from the city’s Department of Buildings.
In a letter received by Marriott last August, attorneys for the Pride Hotel proposed an alternative arrangement that would have allowed the property to be used to house migrants, according to the complaint. The letter said it was not “economically viable” for the hotel to operate, given “the poor state of the economy and the ongoing downturn in the hospitality industry.”
“New York City is pressuring hotels in the metropolitan area to participate in its housing programs for migrants,” the letter said.
The Pride Hotel did not respond to Marriott’s follow-up requests, including notices of defect, the complaint states.
