Road Warrior

As hotel boycott grows, help Dorchester staff: Exec

Beverly Hills hotel boycott
Beverly Hills hotel boycott

As pressure against the Dorchester Collection hotel chain continued to grow on Tuesday over its owner's ties to harsh new laws in Brunei, one business executive suggested other hotels should band together to help the local hotel staff.

The employees of those hotels are "innocent observers. They're caught in the crossfire," Miles Nadal, chairman and CEO of the media holding company MDC Partners, told CNBC's "Street Signs."

Other hotels could help out by financially supporting the staff, he added. "These are not huge organizations. A little money would go a long way."

Jay Leno, Ellen DeGeneres, Dreamworks CEO Jeffrey Katzenberg and Virgin CEO Richard Branson are among a growing list of celebrities, business moguls and dignitaries boycotting the Dorchester properties, which include the Beverly Hills Hotel and the Bel Air.

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Last week, the Sultan of Brunei announced a three-phase implementation of an extreme form of Islamic law that includes stoning to death those who commit acts of adultery or homosexuality. The Dorchester Collection is owned by the Brunei Investment Agency, a branch of the Ministry of Finance of Brunei.

Demonstrators protest draconian punishment of women and gay people announced by the Sultan of Brunei near the Beverly Hills Hotel, which is owned by the Sultan, on May 5, 2014 in Beverly Hills, Calif.
Getty Images

On Tuesday night, the Beverly Hills city council is expected to discuss whether to ask the government of Brunei to divest itself of the Beverly Hills Hotel.

Events such as The Night Before the Oscars party and the Global Women's Rights Awards, co-chaired by Jay and Mavis Leno, have pulled business from the hotel. Over the weekend, Richard Branson tweeted that no Virgin employees will stay at any of the chain's properties until the Sultan of Brunei "abides by basic human rights."

Read MoreBusiness, luxury travelers turning to Airbnb-type options

Nadal said that while governments like the oil-rich Brunei look to invest their money in havens, there is an expectation that they will conduct themselves with the laws and morality of the country they are operating in.

"At the end of the day the only way to hurt [the owners] is in their pocketbook … and the only way to do that is for all residents and as well as all visitors to boycott the properties," Nadal said.

However, Christopher Cowdray, the CEO of the Dorchester Collection, said the boycott was misdirected.

"The economic impact of this not only affects our loyal team members but extends to the local community, our valued partners and suppliers," Cowdray said Monday in an email to CNBC. "During this challenging time, we have been deeply touched by the tremendous support received from our loyal guests and long standing business partners who recognise that Dorchester Collection hotels are part of the fabric of their local communities. We will continue to honour their iconic heritage and remain committed to our core values of integrity, equality and diversity."

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—By CNBC's Michelle Fox with reporting from CNBC's Morgan Brennan. CNBC's Amy Langfield contributed to this report.

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