Local hotel regains franchise

SHEFFIELD - InterContinental Hotel Group, which owns the Holiday Inn brand, reinstated the license agreement of a Sheffield motel Thursday after the motel lost its franchise Monday.

The 202-room motel, purchased by Atlanta-based Kronos Hotels and Resorts LLC in June 2007, lost its franchise after a license payment wasn't made because of an accounting error, said Kronos officials.

Caroline Sanfilipo, spokeswoman for IHG, said as of Thursday morning, the license agreement had been reinstated.

"Payment that was made by Kronos last week was misapplied by IHG. It was an anomaly that lasted 48 hours," said Kronos spokesman Peter Mathon.

"It was an internal problem at IHG and it resulted in the hotel not being on the reservation system for 24 to 48 hours."

By Thursday afternoon, the Holiday Inn Web site still only listed the Decatur location as the closest Holiday Inn to the Shoals. It previously had listed both Sheffield and Decatur locations.

Kronos temporarily lost its franchise license Aug. 19 at its Crowne Plaza Hotel in Cedar Rapids, Iowa, according to a news report from KCRG News out of Cedar Rapids.

Sanfilipo confirmed that the license had been reinstated Thursday.

The Sheffield hotel, which employs about 70 people, has undergone several reported financial problems in the past few weeks, including bounced payroll checks, unpaid utilities and a lack of funds for food, according to internal e-mails obtained by the TimesDaily.

Mathon said, "At a time when the travel industry and the U.S. economy are struggling, this company continues to invest one million dollars in improvements and has made no layoffs.

"What is unusual about the fact that a company is running multiple locations with millions of dollars in a difficult economy and is shifting money from account to account? Every obligation has always been paid."

As of June 1, the hotel's employees' health coverage was terminated because the company had not paid the premiums. Employees were notified by mail in mid-August that their group insurance had been terminated.

"The reason for the cancellation was failure for payment," said Robert Williams, information officer for the United Group Programs, the administrator for the company's former insurance carrier.

One employee, who requested anonymity because of the company's policy to fire employees who talk to the media, had several medical visits since June but was unaware that the policy had been cancelled until mid-August.

The employee said several other employees were planning to request medical expenses be reimbursed by Kronos.

"I feel terrible for the poor people who had believed that they had insurance," Williams said.

Mathon said that he had not heard of the health care cancellation as of Thursday.

Kronos had used Optimed Health Plans, of Newtown, Pa., for less than a year and had problems paying their premiums, Williams said. "We have told them we are open to resurrecting the insurance."

More than 100 outstanding claims have been filed since the June cancellation.

Williams said the number of claims was "way north of that number" but did not give the actual number, saying that he was unsure of where the case was with their legal department.

Sheffield Mayor Billy Don Anderson said Thursday the Holiday Inn was still experiencing delinquency issues with utility payments and sales taxes.

"We're confident they will work them out," Anderson said. "I don't like dealing with them in this delinquency state. It's not a very professional way to do business. It's not the way we're used to doing business."

Anderson said the city owns the property where the building is located, which excludes the hotel from having to pay property taxes.

"These people could pay this ground lease off with a nominal amount of money, but it might not be economically in their interest," Anderson said.

If that happened, the company would also be responsible for paying annual property taxes, the mayor said.

Susann Hamlin, executive director of the Colbert County Tourism & Convention Bureau, said she was delighted to hear the Holiday Inn flag had been reinstated.

"We need that brand in our market," Hamlin said. "All kinds of travelers depend on that brand to satisfy their lodging needs."

While the hotel has been behind on its lodging taxes, Hamlin said they are currently up to date. "Every now and then a hotel will do that," she said.

Trevor Stokes can be reached at 740-5728 or trevor.stokes@TimesDaily.com.