Sheraton Hua Hin: Landlord Sues Tenant as Lease Ends
The trust that owns the Sheraton Hua Hin Resort & Spa has gone to court to recover the hotel from its tenant, whose lease ran out on 11 October. Here is what has been filed, what the tenant says and what nobody has said yet.
The owner of the Sheraton Hua Hin Resort & Spa is suing the company that runs it. The 240-room resort on Petchkasem Road, just over the Cha-am border from Hua Hin town, saw its lease run out on 11 October, and the trust that owns the buildings wants possession back.
None of the reports say whether guests or bookings are affected. What they do show is a landlord and a tenant who could not agree terms, in a month when another Sheraton-branded hotel tied to GRAND has also ended up in court.
What has been filed
Grand Hospitality Real Estate Investment Trust (GAHREIT) filed at the Bangkok South Civil Court on 15 October, Thailand Hotel News reports. The defendants are the tenant, Honor Business Co., Ltd., and Grande Asset Hotels and Property (GRAND), named as income guarantor under the lease.
The trust is asking the court to order the resort handed back, with the hotel operating licence and permits transferred. It claims breach of contract, tort, eviction and damages. It also wants an injunction requiring both defendants to deposit ฿11,916,115.08 a month as security while the case runs.
That figure is the average monthly equivalent of the rent set for the tenth year of a possible lease renewal. It is a request, not an order, and the court has not ruled on it. The allegations are unproven.
How it got here
The first public sign of trouble came in August. According to an earlier report, the tenant missed the 14 August deadline for the June rent instalment of about ฿5.4 million including VAT. The trust manager sent notice to the tenant and GRAND on 17 August.
On 11 September the trustee, Bualuang Asset Management, served a formal notice demanding the hotel assets, the operating licence and unpaid rent with interest by 10:00 on 12 October. The trust says the tenant did not comply. GRAND’s own project page dates the lease from 12 October 2017, which fits a nine-year term ending this month.
What GRAND says
GRAND responded on 20 October, according to InfoQuest. It says COVID-19 caused years of losses for the tenant, which it says kept paying rent through the pandemic. It says both companies repeatedly asked the trust to renegotiate the rent to a level the hotel could sustain, without agreement.
On 9 October, three days before the trust’s deadline, the tenant sent a proposal on keeping the hotel running, protecting the assets and handing over in an orderly way. GRAND says that also failed to produce a deal, and it maintains that it and the tenant acted in good faith. Both claims rest on GRAND’s word alone.
The wider pattern
This is a separate case from the Royal Orchid Sheraton in Bangkok, where a separate trust sued the hotel’s owner-operator on 21 October after a missed buy-back deadline, as Thailand Hotel News notes. It adds that neither suit establishes wrongdoing before a court rules.
The context is a hotel sector still carrying pandemic-era debt. Thai Examiner cites the Thai Hotels Association warning in June that more than half of operators faced liquidity strain. It also reports that GRAND missed about ฿19.3 million in bond interest on 12 October.
What it means if you have a booking
A lease dispute is not a closure notice. Nothing in the filings or GRAND’s statement says the resort has stopped taking guests. If you hold a stay, a wedding or an event booking, ask the hotel directly how it is being handled, and keep your confirmation in writing.
The next step is the court’s decision on the injunction request. Until then, the practical question for guests and staff is who runs the hotel on the day the tenant’s right to occupy it is judged to have ended. Nobody has answered that publicly yet.
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