Capella Pedregal in Cabo San Lucas is No More, And We're Not Sure What to Think


It’s no secret that Capella Pedregal in Cabo San Lucas is on my list of favorite hotels visited (to date), so this morning’s announcement that the resort would no longer be affiliated with the Capella brand definitely came as a surprise. Going forward it will be called The Resort at Pedregal.

The Capella Hotel Group manages an elite set of award-winning properties around the world. Under its brand, the Cabo San Lucas resort has garnered many awards and such titles as 2014’s #1 Resort in Mexico and #15 in the world by Travel + Leisure, #6 Best Spa in the World by Condé Nast Traveler and was awarded a AAA Five Diamond Award in 2013 and 2014.

Not many details were noted in the press release, but according to the Los Angeles Times, “The trade publications quoted [Capella Hotel Group’s CEO, Richard Schulze] saying the sudden move in Cabo was ‘part of an ongoing dispute between the two owners of the asset…We have been caught in the middle.’” Why can't we all just get along?

Bob Holland, an established hotelier, has been named interim General Manager, and it has been said that this new direction and management will have little to no impact on the rest of the property's staff. Most recently, Holland served as General Manager at Wyndham Grand Chicago Riverfront (which if is definitely a far cry from the iconic five-diamond property in Cabo).

But what is Capella Pedregal without Capella? Will the landmark destination resort remain the pinnacle of luxury and service that it garnered under the brand? So many questions, so little answers. Frequent guests of the resort will no doubt be wondering what will happen to their precious Mexican gem. Most importantly, can we still expect fresh chips, guacamole and salsa brought to our suites at 4 p.m. daily along with our little Coronitas? 

News of the management changes comes just weeks after Hurricane Odile ravaged the city and damaged many of the area’s hotels and resorts. Since then, the property has been working hard to get things cleaned up and repaired in order to re-open. In an effort to help out employees whose homes were also affected, the resort setup an Employee Hurricane Odile Recovery Fund which has raised $82,946 as of publication. The hotel is hoping to re-open in early 2015.

Reached only through the private Dos Mares tunnel, The Resort at Pedregal has 66 rooms (all with plunge pools), 21 villas, a 10,000-square-meter spa and two dining venues. Currently, rates begin at around $600 per night. Here’s to hoping the resort that is well-loved doesn’t go through too many changes and continues to be pinnacle of luxury in Mexico. In the meantime, can someone get me a margarita? I'm in mourning.

***Update: The Resort at Pedregal issued a statement today, November 7, saying, "Capella's termination resulted from improper financial reporting and diversion of revenues through improper fee calculations. Hoteles has instituted legal action to recover the misappropriated funds and will pursue its remedies for other defaults under the management agreement." It seems like there's a lot more going on under the surface here, and if what is stated is true, Capella will have some explaining to do. You can read the full release here.

***Update 2: The latest release from Capella Hotel Group shows the fight is not over yet for the management company. This is getting sticky, but makes for some good daytime TV drama at least. "Atlanta based Capella Hotel Group (CHG) has advised that a New York Supreme Court Judge has ordered that Capella Hotels and Resorts be reinstated as the management company of Capella Pedregal, Cabo San Lucas, effective immediately. Despite this ruling, CarVal Investors (CarVal), a co-owner of the Capella Pedregal, Cabo San Lucas has persisted in making baseless allegations against CHG with the intention of damaging the company's reputation and its standing in the hospitality industry." Read the full release here