Having represented management companies and owner/developers in projects ranging from five-star mixed-use luxury branded resorts to limited-service highway franchised hotels, I have had the opportunity to work on many branded management agreements, third-party management agreements (non-branded) and franchise agreements. From my years of experience, I've compiled a list of key terms and tips for you to live by.
On August 18, 2015, the FCC announced a $750,000 civil penalty and formal Consent Decree with Smart City Holdings for blocking consumers' personal Wi-Fi access at various convention centers, meeting centers and hotels around the United States. Smart City is an internet and telecommunications provider for such facilities, and had been blocking personal mobile "hotspots" being used by convention and meeting attendees.
Nota bene: After opening the month by discussing the imaginary situation where SEO is no longer a significant factor in web search as well as alluding to the potential drawbacks that negative reviews on third-party sites like TripAdvisor in another article, it seems appropriate to end the month by talking about another hypothetical situation. Again, it may be true or it may be false, but what's really important is that it gets you thinking!
The recent Uber lawsuit | On September 9, 2014, Uber Technologies was sued in Federal Court in San Francisco for violating the Americans with Disabilities Act (ADA) and California's Unruh Act. The suit arose from the claim that UberX drivers refused to allow blind riders to bring their guide dogs. For a copy of the complaint, click here to see Natl Federation of the Blind v. Uber Technologies. This is just the latest in a long history of complaints or enforcement actions involving the legal requirements concerning "service animals" under the ADA and corresponding state laws such as California's Unruh Act.
When a hotel management agreement is terminated without the consent of the manager, the law clearly allows the manager to recover damages (from the owner) as a result of the termination. In most cases, the owners and managers resolve their issues without litigation. For the substantial number that cannot agree and thus must be adjudicated, the courts have supported solid estimates of forgone fees for determining damage awards, based on careful, defensible calculations of the hotel's performance during the prospective contractual period.
Hotel financing takes different forms based on the capital requirements of the developer and the availability of alternative financing sources. These factors vary with the economic climate. Typically, hotel developers attempt to finance new hotel construction projects with a combination of debt and equity. Within these two general categories of capital, various sources may be required to fund the project. This article investigates the benefits and risks of seeking equity participation from hotel management companies.
After accounting for differences in branding, location, property age and condition, market size, and property type, do different management companies still produce significantly different results? This article shows that the answer is: YES.
In recent years, the topic of "brand versus independent" has become increasingly popular. Every industry conference has a panel titled the same, numerous articles - and blogs - are being written on the topic by every publication, HotelNewsNow recently launched a newsletter dedicated to independent hotels, the inaugural Independent Lodging Congress took place in Philadelphia in late 2013 focused on gathering the owners and operators of independent hotels, and if that were not enough, numerous high profile "de-flagging" lawsuits have certainly highlighted the topic. While it is hard to attribute the peaking interest on this topic to only a few things, clearly owners are questioning the cost/benefit of a chain affiliation, internet distribution and marketing have dramatically leveled the playing field over the past 10 years, customer loyalty is not what it used to be and consumer preferences are certainly evolving.
These are getting to be pretty exciting times to be in the hotel business. Hotel industry fundamentals have continued to improve since the Great Recession and none of the experts see a particular event or reason that fundamentals will stall. Although occupancy growth rate is slowing in some sectors, ADR growth generally continues to drive greater profits to the bottom line.
One of the first decisions in the hotel development or acquisition process can have a lasting impact on the success of the project: whether the property should be branded, and whether that brand should manage the property. The hotel's brand will be a defining part of the profitability, image and value of the hotel, and there may be no other decision which has a greater effect on the future of the property. Similarly, the management of a hotel can enhance the value of the brand, protect the owner, or detract from the value of the hotel -- by as much as a 50% swing.
Is an LOI legally binding? The general rule: look to the language of the LOI to determine if the parties intend to be bound to all or some portions of the LOI. Most litigation regarding the enforceability of LOIs arises because the parties did not clearly reflect their intention concerning enforceability. This is particularly so if the LOI contains the material provisions of a contemplated transaction and there is no unequivocal expression of the intent of the parties to the contrary.
For the parents of young children and hotel-resort owners, 2012 was a good year, not a great year, but a good one for hotel waterpark resorts. Twenty-one (21) waterparks opened in the USA during 2012 compared to 27 in 2011, 20 in 2010 and the record high of 40 in 2007. While money is just beginning to loosen up for families and hotel developers, new hotel construction is still rather flat, but resort acquisitions and expansions are rising.
The ULI program held on February 20, 2013 in JMBM's Los Angeles offices was a great success. The program title says it all -- "Back to the Future: The Renaissance of Hotel-Retail Mixed-Use." As one might expect for a ULI event on a timely topic like this, there was a capacity crowd, sharing of the latest "technology" in adding hotels to shopping centers, and a veteran team of presenters.
ADA litigation claims have skyrocketed. Since January 2005, 16,530 ADA lawsuits -- lawsuits alleging violations of the Americans with Disabilities Act ("ADA") -- have been filed in federal courts across the country. Even more have been filed in state courts. In this article, two senior members of our Global Hospitality Group® talk about a new law passed in California with the goal of reducing abusive ADA litigation.
California adopted a new TEA policy as of April 30, 2012 which my partners Catherine Holmes and Victor Shum have been on top of from the outset. On June 19, 2012, the California Governor's Office held an open conference call to discuss further changes in California's procedures for designating Targeted Employment Areas or TEAs. There is some good news and some bad news. Here is an update on what transpired.
This morning, the DOJ formally published an "Amendment of the Americans with Disabilities Act Title II and III Regulations to Extend Compliance Date for Certain Requirements Related to Existing Pools and Spas Provided by State and Local Governments and by Public Accommodations" (ADAAG Sections 242 and 1009 Standards for Accessible Design). The new pool lift Compliance Date is January 31, 2013. The Amendment acknowledges that the DOJ's January 31, 2012 technical advisory caused "significant concerns and misunderstandings among a substantial number of pool owners and operators" with respect to the new technical requirements pool lift must .
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.
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.
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.
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.