Marriott’s Worst Resort May Finally Close — A $50 Million Subsidized Redevelopment in the U.S. Virgin Islands Is Taking Shape

After financial shenanigans it looks like Marriott’s ‘regret resort’ – likely the worst property in the chain, by a lot – will see government-subsidized redevelopment. Until then, stay away from Carambola Beach Resort on St. Croix.

Carambola Beach Resort

Carambola Beach Resort in St. Croix wound up as an “unbranded Marriott” after deteriorating so badly that the Renaissance flag was pulled. This all started back when U.S. Virgin Islands government employee pension fund put $15 million into the resort during the Great Recession. (The Virgin Islands Inspector General concluded the arrangement was illegal, by the way.) $6.8 million was supposed to go to renovations to meet Renaissance standards.

The hotel defaulted. The pension fund cut the interest rate, later took over the property, then absorbed additional liabilities (including $12 million in “extra disbursements”). The Inspector General audit found transactions that were most generously described as gross incompetence, but probably weren’t – payments for non-existent work and missing documentation for 23 wire transfers totaling $7.6 million.

Four years ago Marriott claimed renovations were “underway,” the hotel would be Renaissance again once complete, and Bonvoy elite members would still receive Renaissance benefits in the interim.

In fact, Carambola may be the worst Marriott in North America. The property has collected large insurance proceeds while not reinvesting in the property itself. Guests reported a lime-green, neglected pool, pests, dirty common areas, broken and closed amenities, limited food, and maintenance issues in rooms.

Fortunately, the property is expected to close by summer to enable an “expedited” $50 million redevelopment. This is funded in part by Bill 36-0259, an amendment to the Hotel Development Act that lets developers keep hotel taxes to recoup investments of at least $25 million that expand room capacity by at least 25%. This has advanced out of committee but hasn’t yet passed.

The hotel, though, is still bookable at Marriott.com throughout the period. They’re still selling rooms, and the ink on the deal doesn’t actually appear final, so the status of the refresh while appearing more likely than when Marriott promised it four years ago is not yet confirmed.

The money for redevelopment comes from “a major international hotel chain with operations in Europe and Canada” though – Accor? – so it may not ever get reflagged as a Renaissance after all.