Dive Brief:
- LuxUrban Hotels named Michael James CFO and appointed hotel finance executive Alexander Lombardo to its board of directors in the latest leadership shakeups at the company.
- In March, LuxUrban paid a $1.2 million fine to New York City in a settlement over illegal short-term rental charges, Gothamist reported. In May, Wyndham Hotels & Resorts dropped several LuxUrban properties — which had been part of its Trademark Collection — from its platform.
- LuxUrban has since made moves to reassure shareholders that the company is in the right hands, including through the creation of a special committee to explore initiatives to increase shareholder value. Chairman of the Board Elan Blutinger said LuxUrban believes James is “the right person to advance the development of a stable and sustainable financial foundation.”
Dive Insight:
In 2023, LuxUrban rapidly expanded, particularly in New York City, where it operated hotels in Brooklyn and near Times Square. In August, the company added 16 hotels to Wyndham’s Trademark Collection.
In 2024, however, signs of trouble emerged. In January, New York City sued LuxUrban for operating “illegal transient occupancies” in “apartments that can only legally be advertised and used as permanent residences,” which resulted in a $1.2 million fine. This spring, class action lawsuits were opened on behalf of the company’s investors, according to reports. And earlier this month, a subsidiary of Apple Hospitality REIT sued the company for alleged squatting at its Hotel 57 in Manhattan, according to real estate news site The Real Deal.
Recent moves to reassure investors have had an impact, however, with shares in the company jumping 44% after market close on Monday, per MarketWatch.
The jump was in response to the appointment of a special committee charged with “evaluating potential strategic transactions, including, without limitation, equity and debt financings, a sale of the Company of some or all of its assets, a merger, strategic acquisitions, or other strategic initiatives and alternatives,” LuxUrban said in an announcement.
Despite recent woes, Blutinger said in a statement Monday that LuxUrban still believes “that we operate one of the most innovative models in the hospitality industry.”
James first joined LuxUrban in February as senior vice president and controller. He has advised and led financial strategy for companies “across industries and at various stages of growth,” LuxUrban said.
Previously, James co-founded and served as CFO for controlled environmental agriculture company Edible Garden AG. He was also CFO of cannabis company Blum Holdings, CEO and CFO of nutritional supplements company Inergetics Inc. and CEO of software developer Nestor Inc.
Lombardo, who joins the board of directors, is currently vice president of finance at hotel management firm Seaboard Hospitality. Blutinger called him “an accomplished hotel development and finance executive with a history of enhancing asset values and driving portfolio and revenue growth.”
LuxUrban did not respond to a request for comment.
