Hilton's Woes

Hilton Worldwide found itself in a sticky situation yet again this week as Venezuelan President Hugo Chavez ordered the Hilton Margarita and Suites be seized and nationalized because the property attempted to place conditions of its use for an event hosted by the Venezuelan government, according to AFP.

This is the second hotel managed by Hilton that would become nationalized by Chavez. In 2007, the government seized the Hilton in Caracas (also a venue for political events) and rebranded it Hotel Alba. The Hilton Margarita most recently hosted the South America and Africa summit featuring more than 30 leaders including Moammar Gadhafi of Libya and Zimbabwe president Robert Mugabe and Chavez frequently hosts guests at the Hotel Alba.

Last week, it was reported in the Wall Street Journal that the Federal Grand Jury here in New York is investigating allegations made by Starwood Hotels & Resorts that Hilton stole “truckloads” of information to create a new luxury hotel brand named Denizen by mimicking Starwood’s successful W brand.

The spicy lawsuit accused many former Starwood employees, including Ross Klein and Amar Lalvani, the leaders of Hilton’s Luxury & Lifestyle division, of stealing “more than 100,000 electronic files.” The two are also accused of shipping boxes from Starwood’s headquarters to Hilton’s that included confidential W development plans.

The employees, Klein and Lalvani, are currently on paid administrative leave and Hilton has returned the boxes and the electronic files to Starwood and discontinued the brand Denizen, but Starwood could and probably will follow through with the lawsuit unless they settle out of court.