Quail Lodge closure will cost 199 jobs

Update: A Quail Lodge executive said that a bleak economic outlook combined with eight unprofitable years is what led the resort's parent company to close the Carmel Valley luxury hotel.

"We decided that continuing to fund losses just doesn't make any economic sense," said Neil Galloway, director and chief financial officer of The Hongkong & Shanghai Hotel, Limited and director of Quail Lodge, Inc. "We recognize it’s a difficult decision for the employees and their families. It has not been an easy decision to make but the economic realities are what they are."

Nearly 200 workers, including 146 union members will lose their jobs when Quail Lodge closes Nov. 16.

"This is shattering news for these workers and their families," UNITE HERE Local 483 said in a statement. "We are extremely disappointed that Quail Lodge has chosen to close, and will encourage the company to sell the property to another company that might return it to profitability, as it had achieved under the previous owner, the late Ed Haber."

Galloway said the company invested "tens of millions of dollars" worth of capital improvements but Quail Lodge remained unprofitable, even in 2007, which was a good year for the hotel industry.

Quail Lodge plans to keep the golf course and club house, including Edgar's restaurant open, Galloway said, adding that special events, like during Harvest Carmel and Car Week, will continue.

The company said it doesn't have plans for selling, redeveloping or reopening the hotel. 

The news comes amid stalled contract negotiations with UNITE HERE. The hotel was pressing for freezing salary and benefits and the union said "employees had accepted a company contract with concessions amounting to more than $1 million dollars over the next two years, in order to keep their jobs."

Galloway said the decision to close the hotel had nothing to do with the union.

The union said it is holding out hope that the company’s chairman and majority shareholder, Sir Michael Kadoorie, who Forbes lists as the 124th richest man in the world, with a net worth of $4.2 billion, will change his mind about closing Quail. "He has the reputation of being a great philanthropist, helping low-income people in other parts of the world, so we hope he will take such a humane approach at Quail, as well," the union said. 

Galloway said the decision was made by the hotel group's board. " [Kadoorie] is not involved with executive decisions," he said.