St. Regis Monarch Beach, the hotel made famous by the notorious luxury retreat held by American International Group ( AIG) merely days after the company received a federal bailout, has been seized by Citigroup ( C). Citigroup took over the 400-room Dana Point, Cali. hotel and golf course after it failed to repay a $70 million loan that was in default. St. Regis, a unit of Starwood Hotels & Resorts Worldwide ( HOT), will continue to manage the resort and business will go on as usual, according to a statement released by the company. Starwood Hotels is set to report its second-quarter earnings results on Thursday -- and it doesn't look pretty. The company has had to contend with the swine-flu outbreak, which kept travelers home and forced Starwood to waive penalties for canceling or changing reservations at its Mexico locations. Analysts expect the company to earn 17 cents a share on revenue of $1.19 billion. Last year, Starwood earned 56 cents on $1.57 billion in revenue. St. Regis is the latest casualty in the luxury hotel market. Earlier this month Starwood said it is selling its W San Francisco hotel to an investment company for $90 million. Host Hotels ( HST), which partners with Marriott, Ritz-Carlton and Four Seasons, among others, annouced today that it swung to a loss in its second quarter and cut its full-year outlook, not expecting occupancy levels or room rates to level anytime soon.