Inspired by the new Netflix show Inventing Anna, about a woman who scams a series of luxury hotels in New York and Marrakesh, I reached out to the hertelier community to understand more about how often this kind of blatant fraud happens and how to deal with it.
Here’s a story from a former GM of a luxury hotel on Manhattan’s Upper East Side that offered plush suites for long-term rentals, which accounted for up to 20% of the hotel's annual business. Demand for this type of accommodation was usually from businesses with executives from abroad on assignment, people renovating apartments nearby or couples going through divorce…this time it was a couple from abroad.
The hotel I ran had luxury apartments available, accommodations that would suit the wealthy looking for a second or third residence with all the amenities and no concerns. The hotel benefited from the low maintenance and continued occupancy. In certain years this type of business might represent as much as twenty percent of our overall occupancy and add considerably to the average rate. The Front Desk called to announce him and his interest in our largest, most elegant suite of rooms. Tall, with long black hair, combed back, and intensely blue/violet eyes, I welcomed him into my tiny office and offered him coffee. He and his wife would be staying a month.
He would like to surprise her upon her joining him from London, with several bottles of Roederer Cristal. Would I have the items he had just purchased for her from Henri Bendel, pressed and arranged in the master bedroom prior to her arrival in two days. “Of course” he stated, “please run the entire expense on my Am Ex" as he presented it to me and paid for a month upfront, which cleared no problem.
For the next many days, I was happy to greet them both upon seeing them in the breakfast room and usually having evening cocktails in the bar before they ventured out. Beautiful people, always getting admiring glances from both male and female guests. The staff loved this couple as they bestowed generous tips lavishly and frequently. When he once again appeared in my office to say they would like to extend their stay for another month, I was certainly more than pleased and sent three dozen blush roses up to their apartment with a note of appreciation for their business. When our controller stopped by to inform me that they had run up a considerable amount of charges, ordering call brands of liquor and vintage wines, I was not shocked as they clearly lived the good life. But the Am Ex, he explained, had rejected payment.
Certain that there was an easy explanation, I called him to chat. Flowing with apologies, he said he had canceled that card due to misplacing it and in fact had money being wired to him his London office that should arrive by the end of the week. Then, by the end of the next week. The charges continued to mount, health club, spa, meals, and the second-month apartment rental, still left unpaid. Calling to meet again, the phone went unanswered. A letter was slipped under their door, asking for a consultation as soon as possible. The housekeeper reported that their "Do Not Disturb" sign was now always on their doorknob and the rooms had not been attended to for three days. Security was sent to investigate but no one answered the knocking and the deadbolt was securely in place when a passkey was tried.
Late into the night, they would avail themselves of room service as it was offered on a 24-hour basis at our hotel. At what point do we refuse food? All other services had been then cut off, we were even considering the electricity to that suite of rooms which definitely was not in keeping with our class of service and image. After nearly two and a half months, they were into us by over $65,000. A major worry was the possibility of them qualifying for residency at the 90-day mark and thus a legal proceeding that could take many more months would ensue before they could be evicted! Security was posted outside the apartment doors all day and late into each night. Room Service was stopped. Nothing was delivered to the room, not bottled water or toilet paper for fresh towels. After three or four days and just a week before the 90 day period would be in effect, the apartment was vacated sometime after three a.m and before six a.m. They slipped out in the moments when guards were not around. They left the apartment in fairly reasonably shape, nothing of consequence was missing or damaged.
I spent the next day phoning all of our competitors in the area to warn them, one of which told me they knew the couple and had experienced them much the same for over two months, earlier in the year. Surprised that this had happed just recently, I reached out to the hotel association and learned that three other hotels in our city had all been taken by this attractive couple in the past year and a half! Thus began a new line of communication and cooperation amongst us all.
We did pursue legal channels in the hopes of recovering what was owed us but we found the line too long and ended up having to write it off as a loss.