http://www.latimes.com/business/la-fi-stregis-foreclose21-2009jul21,0,3851880.storyThe St. Regis Monarch Beach, the Orange County luxury resort where American International Group Inc. sponsored a luxury retreat just days after accepting a federal bailout, has been seized by Citigroup Inc.The hotel will continue to operate as a St. Regis.
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"The acquisition will have no impact on the hotel, golf club or beach club," Citigroup said today. "Starwood's St. Regis brand will continue to be responsible for the day-to-day management of the properties."
Citigroup's takeover is a sign of how deeply troubled the upscale lodging industry is now, said consultant Alan Reay of Atlas Hospitality Group. High-end hotels across the country have been hammered by a cutback in business and leisure travel.
Resorts such as the St. Regis, which cater to wealthy travelers and the high-end corporate retreat business, have seen some of the steepest declines in revenue.
"It's not good for anyone when a hotel goes back to the bank," Reay said.
He estimated that the hotel was carrying $300 million worth of debt but is probably not worth much more than $100 million now that property values have fallen in the recession.