General Management Opinion Articles

November 15, 2011

Hotel Revenues Not Subject to Absolute Assignment of Leases and Rents - A Silver Lining in the Dark Clouds of the Great Recession?

While it takes an accomplished clairvoyant to predict where RevPar 1, ADRs2 and Occupancy3 will be in the coming months, or for that matter the coming years, for those hospitality owners and operators trying to weather the economic storm there has been some positive news recently out of a place that few wish to spend "too many a night" – the United States Bankruptcy Court4. In the spring of 2011 an oceanfront hotel owner was successful in arguing that it is permitted to use the revenues generated from its guests' stay and use of amenities to assist in the reorganization of the company.

By Francis Gorman, III, Cayuga Hospitality Consultants

United States

Opinion Article

October 5, 2011

Ten Largest Hotel Brands' Average Sale Prices

Summary: Hotel & Leisure Advisors has accumulated a database of more than 6,000 hotel sales since 2000. This article analyzes the average hotel sale prices per room for the major brands in the hotel industry. Our comparison includes top 10 brands by room count. It includes nearly 3,000 transactions between January 2007 and August 2011. Our analysis indicates that the Hilton Hotels and Resorts brand achieved the highest mean and median sale price per room of the top brands by room count in the United States, while the Days Inn brand achieved the lowest mean and median sale prices per room.

By David Sangree, MAI, CPA, ISHC, is President of Hotel & Leisure Advisors, Hotel & Leisure Advisors (H&LA)

Opinion Article

October 4, 2011

Hotel Management Contracts in Russia and the CIS

Due to increased hotel development in Russia and the CIS, it is important for owners to better understand different types of relations with the hotel operators. In this article we address some of the main terms of a typical management contract.

By Alexey Korobkin, HVS

Russian Federation

Opinion Article

September 12, 2011

The Shifting Sands of Hotel Brand Standards

Hotels need brands, and brands need hotels. Like all relationships, the relationship between branded hotel operators or franchise companies (the brand) and hotel owners needs ground rules. As long as both parties agree to the rules and follow them, who can complain? Now, what happens if the ground rules change? In most relationships, both parties would agree to change the rules -- or they would separate and go their own ways.

By Robert Braun, Partner, Jeffer Mangels Butler & Mitchell, LLP, JMM

Opinion Article

August 30, 2011

Hotel lawyers on terminating hotel operators: Turnberry Resort drops Fairmont flag

Hotel Lawyer update on Hotel owners terminating hotel operators. Over the years we have spent a lot of time on the subject of getting a great hotel operator and terminating bad ones. Owner discontent seems to erupt when operators continue to deliver disappointing results and ignore owner's requests to drive the top line and manage costs. Then the operators wonder why owners are upset. See for example "Terminating hotel management agreements when things don't work" and "How to terminate a hotel management agreement when an operator really deserves it!".

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

August 29, 2011

Hotel lawyers on terminating hotel operators: M Edition lawsuit against Marriott has a new twist -- Marriott is replaced overnight

Hotel Lawyer update on Hotel owners terminating hotel operators.This weekend has been a busy one for owners tired of dealing with their branded managers. The Turnberry Group dropped Fairmont on Sunday. See Hotel lawyers on terminating hotel operators: Turnberry Resort drops Fairmont flag.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

August 23, 2011

Hotel Management Agreements: Incentive Fee – The Stuff of Negotiation

Hotel management agreements among the large branded management companies follow what by now has become the standard formulation for fees, at least before the negotiation commences. The base fee and incentive fee are now well known in the industry and expected as the starting points in most manager-owner negotiations.

By Albert Pucciarelli, Esq., Cayuga Hospitality Consultants

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Opinion Article

August 9, 2011

M Waikiki's Edition lawsuit against Marriott International and Ian Schrager - an owner's HMA dispute with Marriott

I was recently interviewed by Jason Freed of HotelNewsNow (a division of Smith Travel Research) about three high profile lawsuits in the hospitality industry. The first case we discussed was the recent lawsuit filed by the owner of the 353-room Edition Waikiki against Marriott and Ian Schrager. As the hotel's owner, M Waikiki LLC asked the New York Supreme Court to terminate its 50-year, no-cut hotel management agreement (HMA) with Marriott on its $250 million Honolulu hotel and to award damages for misrepresentation and breach of contract.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

June 22, 2011

Hotel Lawyer: Protect Your Hotel Business With Captive Insurance

Setting up your own captive insurance company can protect your business and save you money! Captive insurance companies can provide substantial economic savings and tax flexibility for hotel owners. My partner, Gordon Schaller, is one of the top experts in the country advising clients on when it makes sense to set up a captive insurance company and how to do it. To find out how this can work for you, read today's post on the Hotel Law Blog.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

April 15, 2011

A new federal court decision upholds condo hotel structure. No "securities" involved as structured. Disgruntled condo hotel unit purchaser lawsuit dismissed

Hotel Lawyer with good news for well-structured condo hotel deals. With the experience gained as legal and business advisors on more than 100 condo hotel and hotel condo projects, we have said for many years that this type of project has earned an enduring place in the landscape of hotel and real estate development. We still believe that.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

February 28, 2011

Hotel Lawyer on Hotel Management Agreements: Exculpation Clauses for Protecting the Owner's Assets

This article briefly reviews the need for hotel owners to include a provision in hotel management agreements limiting the liability of the owner to its interest in the hotel property. This kind of provision is commonly referred to as an "exculpation clause," because it exonerates someone from blame or liability. While this is, in many ways, basic "blocking and tackling," it is important to remember as acquisitions in the hotel sector increase and as owners renegotiate agreements with brands and independent managers.

By Robert Braun, Partner, Jeffer Mangels Butler & Mitchell, LLP, JMM

Opinion Article

February 17, 2011

Hilton Management Services looks to add depth

The strategy for Hilton Management Services is easy to describe when it comes to hotels bouncing back from the depths of a recession: maximizing an asset to meet an owner’s objectives. It comes down to nothing more than keeping the message simple and to the point, said Tim Benolken, senior VP of hotel operations in Western North America, during an interview at last month’s Americas Lodging Investment Summit.

HotelNewsNow

Opinion Article

November 2, 2010

Hotel Lawyer: Checklist for negotiating Hotel Management Agreements/Hotel Operating Agreements - The HMA PRO™ Checklist

FREE Comprehensive Checklist for Negotiating a Hotel Management Agreement. Negotiating a Hotel Management Agreement or HMA is one of the most important things hotel owners will ever do for their hotel investment. And getting terms that work well for the owner can be very problematic. That is why JMBM's Global Hospitality Group® developed a solution for getting the best hotel brand and operator . . . and HMA terms that protect the owner.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

United States

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Opinion Article

October 7, 2010

Hotel Lawyer with insights on How to get a great hotel operator

Hotel Lawyer with a big tip on how to get a great hotel operator and a fair hotel management agreement. With experience gained in negotiating, re-negotiating, litigating, arbitrating and advising on more than 1,000 hotel management agreements and more than $60 billion of hotel transactions, the members of JMBM's Global Hospitality Group® wanted to share some lessons learned on the subject. They are all available at www.HotelLawBlog.com.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

July 14, 2010

Hotel Labor Lawyer Alert: U.S. Department of Labor targets the hospitality industry

The U.S. Department of Labor (DOL) is taking historic action. With a huge increase in funding and staffing, the DOL is specifically targeting audits and enforcement actions for every hotel, motel, and resort in the U.S. The program will search for violations of overtime rules, minimum wage, and classification of exempt and non-exempt positions. In addition, one of the primary focal points of these audits will be employers with workers holding H-2B visas.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

United States

Opinion Article

June 30, 2010

ADA enforcement "sweeps" hit the West Coast - Exactly what does this mean to the lodging industry?

As discussed below, the new sweeps are a "warning shot" - something that all lodging operators should take very seriously, and they should start working NOW to be prepared for these investigations. But this is only the tip of the iceberg in terms of what lodging professionals should be thinking of in terms of accessibility compliance.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

May 3, 2010

Hotel Management Agreement Terminations | Is There a Better Way?

Hotel management agreements are a key factor in the success and value of a hotel -- getting the right operator and a fair hotel management contract. Please note: Contracts between hotel owners and managers (or operators) controlling the management of a hotel go by various names. They are called "hotel management agreements", "HMAs", "hotel management contracts" or "hotel operating agreements." For convenient reference, this article will generally use the term "Hotel Management Agreement" or "HMA", but all these terms mean exactly the same thing. There is no difference. Similarly, for variety we will use the terms "hotel manager" or "hotel operator" interchangeably.

By Jim Butler, Partner & Co-Chair Hospitality Practice, Blank Rome LLP, Blank Rome

Opinion Article

April 9, 2010

Managing Risks Part of Managing Hotels

One of the most important aspects of owning and operating a hotel is minimizing the various physical and liability risks associated with this type of business. Risk management is the process of evaluating a hotel's risk exposure and developing strategies for mitigating those. It incorporates a program for reducing exposure supplemented by insurance protection should an incident occur. A hotel owner and operator would be far better off if they could eliminate all the possibilities of an incident on their property.

By Stephen Rushmore, Hotel Valuation Expert and Founder of HVS, Hotel Valuation Software

United States

Opinion Article

November 5, 2009

Hotel Brand Management Agreements* and the Economic Downturn: Lessons Learned or Lessons Forgotten?

If the global recession of 2008 was an earthquake, its aftershocks are still being felt throughout the hotel industry. The recession has caused occupancy and rates to plummet, sending hotel values into a downward spiral. HVS recently reported that the average value of hotels across the United States is expected to drop to $50,000 per key in 2010, down 50% from the high water mark of $100,000 per key in 2006.

Haas & Najarian

United States

Opinion Article

July 15, 2009

Be proactive about foiling pranks at your hotel

When is a prank not a prank? When there’s thousands of dollars of damage to someone else’s property. That’s when a prank becomes a criminal offense. Dictionary.com defines a prank this way: a trick of an amusing, playful or sometimes malicious nature. The malicious nature reference is where hotel owners and operators are paying a hefty price as a result of a wave of so-called pranks against U.S. hotels. Here’s one such report from the Orlando Sentinel last week. The summary: A prankster claiming to be a front-desk clerk awoke guests with a call at 7 a.m., told them there was a gas leak and they needed to smash the window of the guestroom with a toilet tank. The guests, including a county sheriff’s deputy, complied. They were also told to:

HotelNewsNow

United States