The Carambola Beach Resort St. Croix is a sad tale. Marriott has 30 brands, but this hotel is an unbranded Marriott. You see, it used to be a Renaissance. It’s fallen into such disrepair that they don’t show that name any longer.
Marriott hasn’t given up on the property, though, and are dangling out hope that it will one day become
habitable up to brand standards and once again part of the Renaissance brand.
How this happened is fascinating because it’s a tale of incompetence and, in my opinion, likely corruption on the part of the government employee pension fund of the US Virgin Islands. This story is insane.
The public pension gave the resort $15 million during the Great Recession to cover the property’s mortgage and make renovations. According to the Virgin Islands Inspector General the loan was illegal but the pension did it anyway arguing that it fell under a “special situation” catch-all that allowed them to ignore legal guidance on stewarding pension funds.
- $8.2 million to cover existing bank loans as well as liens against the property and judgments
- $6.8 million for renovations to meet Renaissance conversion standards
The property went into default two years later, but instead of the pension fund taking possession of the hotel they “cut the interest rate from 10.5 percent to 6.3 percent” yet this didn’t prevent further defaults. The pension took over the property in mid-2012. It found itself on the hook for over $1 million in unpaid hotel taxes, and covering “extra disbursements [which] totaled $12 million.”
It was almost as though the hotel was a money laundering operation, considering:
• A $1.2 million payment in 2010 for a fire detection and sprinkler system that did not work.
• $83,626 in payments to the hotel owner’s three other business operations.
• Payments for goods that were not what the businesses supplied. Those included an electronics shop that was paid for supplying “towels.” In addition, a Florida landscaper who was paid $8,195 for a “custom waterfall” that had never shown up on the Carambola property.
The Inspector General also note that unfortunately his forensic audit had to be limited in scope because:
• There were no documents for 23 wire transfers totaling almost $7.6 million…
• There was no documentation in accounting journal entries relating to GERS’ wire transfers from Dec. 10, 2012, to Aug. 26, 2013.
The hotel was sold in 2019 and the pension fund claimed to have made a profit because they foreclosed on a $15 million loan, sold the asset for $10 million (a big loss, after 10 years!), but pocketed $17.1 million in insurance payments due to hurricanes. The resort didn’t do much to restore the property, and guest experiences went south.
The most recent review I found on Tripadvisor offered,
This could be a great property, but it is need of a serious renovation. I was surprised that they could maintain the “Marriott” brand given the issues that we encountered. It’s clear that they have never really recovered from the hurricanes of 2017/18 followed up by the challenges of COVID. The rooms look nothing like the pictures on the website, they are dark and not well lit. It’s hard to know where to start as everything is just plain “dated”, as in circa 2001 dated. EVERYTHING needs to be redone.
The General Manager (or someone writing on her behalf) acknowledged the issues and offered that they are “working on the renovation process” – as opposed to being in the process of renovating – and ideally that would finish next year so you know that it won’t.
The ‘deflagged’ Marriott situation is an odd one. It’s still part of Marriott but not part of Renaissance. And since many elite benefits are tied to – and vary by – brand I asked what this means. According to a Marriott spokesperson,
The hotel is undergoing renovations and will be branded under Renaissance again when it is completed. In the interim, Marriott Bonvoy members with elite status will receive benefits in accordance with the Renaissance brand.
Now, to be fair, the hotel is on St. Croix and that’s not where you go if you’re looking for an upscale hotel experience. And in theory new ownership will invest in the property and it will once again be ‘branded’. In the meantime, Bonvoy Platinums do have to be offered the omelette station as an elite benefit even though there’s no defined breakfast benefits for Marriott participating properties that aren’t a part of any Marriott brand.