Road Warrior

Hotel boycott against Sharia law expands, losses hit $1.5 million

The Beverly Hills Hotel.
Source: The Dorchester Collection

The introduction of Sharia law in the Brunei continued to ripple to the shores of California on Wednesday as the oil-rich nation's ownership of the iconic Beverly Hills Hotel resulted in business cancellations amounting to at least $1.5 million.

"The impact has been predominately in the local events business where those have been canceled and we're up to probably about $1.5 million so far, but we can weather the storm. We're very, very much larger than that," Dorchester Collection CEO Christopher Cowdray told CNBC.

"If you take the global perspective of this city, we're not the only hotel or establishment or business that is owned by a country which has Sharia laws," he said. "There's so many hotels, banks and other organizations that have connections to countries which have this type of law."

Boycotts by celebrities including Ellen DeGeneres, Jay Leno, Stephen Fry, Sharon Osbourne, Virgin CEO Richard Branson and Dreamworks CEO Jeffrey Katzenberg were elevated as Los Angeles' mayor and city attorney joined in. Several organizations said they were canceling major events scheduled at the hotels owned by a branch of the Brunei government.

Hollywood stars boycott famed Beverly Hills hotel

The Brunei Investment Agency owns the Dorchester Collection of 10 luxury hotels: the Beverly Hills Hotel; the Hotel Bel-Air in Los Angeles; The Dorchester and 45 Park Lane in London; Coworth Park in Ascot, England; Le Meurice and Hotel Plaza Athenee in Paris; Hotel Eden in Rome; Le Richemond in Geneva; and Hotel Principe di Savoia in Milan.

Read MoreAs hotel boycott grows, help Dorchester staff: Exec

The City Council of Beverly Hills on Tuesday voted to urge the hotel to untangle itself from its connection to Sharia law.

"These laws are shocking, inhumane and must be met with a strong statement of support for human rights of the people of Brunei," said Beverly Hills Mayor Lili Bosse. "It is extremely important that we separate the hotel from the ownership. This hotel is 102 years old. Beverly Hills is 100 years old this year. The city and the hotel have grown up together and always had a strong and supportive relationship. This is why I'm not calling for a city sanctioned boycott of the hotel. I feel that each individual and group should make their own decision.

"Personally and sadly, I will not be attending any events at the hotel until this is resolved," Bosse continued. "Ideally the Brunei government will repeal these horrific laws. However if this doesn't happen we want the hotel under different ownership so that it's long and rich history in Beverly Hills will not be tarnished by the Brunei government's actions."

The hotel as she noted, is 102 years old, slightly older than the city itself, which is celebrating its centennial this year.

The UNITE HERE Local 11 hospitality workers union had stronger words for the ownership.

"The Sultan of Brunei is anti-worker, anti-gay and anti-woman," Tom Walsh, president of union said in a statement Tuesday. "We want him out of Beverly Hills and out of the United States. These historic hotels deserve ownership that will respect human rights and the rights of their own workers."

The union raised another issue with the hotel ownership: "In 2009, Dorchester closed the Hotel Bel-Air for renovations. It's customary ... for hotel owners to bring back the housekeepers, cooks and gardeners when the property reopens. Instead, the owners of the Hotel Bel-Air fired all the workers and refused to rehire the majority of longtime workers. Workers lost houses, cars and filed bankruptcy as they struggled to find good jobs."

A spokesperson for the hotel did not reply to CNBC's request for comment on the union's statements.

Earlier in the week, Dorchester CEO Cowdray said the boycott was misdirected. "Today's global economy needs to be placed in a broader perspective," he said. "Most of us are not aware of the investors behind the brands that have become an integral part of our everyday life, from the gas we put in our cars, to the clothes we wear, to the way we use social media and to the hotels we frequent. American companies across the board are funded by foreign investment, including sovereign wealth funds."

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The criticism has been mounting for several weeks.

In April, the U.N. Office for the High Commissioner for Human Rights condemned Brunei's proposed revision of its penal code to apply the death penalty for crimes including rape, adultery, sodomy, extramarital sexual relations for Muslims, insult or defamation of the Prophet Muhammad, blasphemy, robbery and murder.

"The criminalization and application of the death penalty for consensual relations between adults in private also violates a whole host of rights, including the rights to privacy, to equality before the law, the right to health and freedom from arbitrary arrest and detention. The provisions of the revised penal code may encourage further violence and discrimination against women and also against people on the basis of sexual orientation," U.N. spokesman Rupert Colville said in April.

In England, the cruise travel agency said it would no longer book its clients at Dorchester Collection hotels. "Any guests asking to book one of these hotels will be politely told why we are unable to fulfill their request and offered a suitable alternative," the company said.

Several organizations contacted by CNBC said they planned to cancel events at the Dorchester hotels.

The Independent School Alliance said Wednesday it moved its Impact Awards Dinner to the Beverly Wilshire Hotel. "When we learned of the Sultan of Brunei's adoption of Sharia Law, we could not in good conscious host an event at his establishment given that his regressive views are completely antithetical to our mission and our message of diversity," the group said.

"Aviva Family & Children's Services has decided to move its annual gala scheduled for May 31, 2014 at the Beverly Hills Hotel to a different venue," reads a statement from the nonprofit sent to CNBC on Tuesday. "Our decision reflects the agency's core values of diversity, equity and respect in serving at-risk, abused and neglected children, teens and their families throughout Los Angeles County. Aviva's decision was taken in light of recent reports concerning the decision to adopt Sharia Law by the property's owner, the Sultan of Brunei."

Even Emile Welman, the former lead vocalist for the a cappella band Overtone, joined the boycott. Welman has performed at the hotel and is featured on the hotel's social media pages. "As much as I love the Beverly Hills Hotel and how well I've been treated there, it's important to take a stand for gays and women's rights across the globe," Welman said in a statement to CNBC. "Coming from South Africa, a place where we continually fight for human rights, I simply can not support such ignorance."

The Dorchester group no longer owns a hotel in property in New York City, but news that it may be looking to acquire one drew the ire of one City Council member.

"The Dorchester Hotel Group is seeing first hand from the outcry in Los Angeles and nationally that anti-gay actions have financial repercussions," Council Member Corey Johnson said in a statement to CNBC. "Any business is able to do business in New York, but they would be wise to realize they should expect similar pushback in New York. People will no longer support organizations or governments that impose laws to execute LGBT people. Brunei should change it laws, and in the meantime, the Dorchester Hotel Group should separate itself from a discriminatory government."‎

Meanwhile the Dorchester group's Twitter account replied to Branson's tweet, with a snarky screenshot showing that Virgin customers can fly to Brunei. "@richardbranson @Virgin are you going to reassess your business interests?" it states. The tweet.

A spokesperson for Branson told CNBC that Virgin doesn't fly to Brunei, however it could be a codeshare flight with another airline.

Read MoreDorchester hotel boycott grows over ties to Sharia law

—By CNBC's Amy Langfield and Ryan Ruggiero. CNBC's Morgan Brennan contributed to this report.

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