Library Archives

 
William A. Brewer III

Fractional ownerships have emerged as the hot new trend in the hospitality industry. Fractional ownerships enable multiple individuals to own a specific piece of real estate in common, with each holding a deed for an undivided share in the property that may be bought, sold, traded, or bequeathed like any other real estate asset. In addition, much like a timeshare, each interest entitles its owner to possession of real estate for a certain amount of time each year. However, in timeshares, the "owner" typically purchases only a contractual right to occupancy, not an interest in real property. Thus, the critical difference between the two concepts is in the nature of the investment. Read on...

Al DeNapoli

While minor earth tremors are not unusual for California, in 1991, the California Appellate Court sent shockwaves across the fault line upon which Hotel management agreements rest when it issued its decision in Woolley v. Embassy Suites. The Woolley decision set the tenor for the way the courts, and consequently the industry, would view the legal relationship between hotel owners and management companies for the coming years. Essentially, Woolley stated that the relationship between an owner and its management company would be governed by principles of agency, where the owner is the principal and the manager is its agent. Over and above the contract relationship between them, the Court held the management company, like all agents, owes its principal fiduciary duties. Read on...

Nelson Migdal

A sophisticated real estate investor may know all the ins and outs of purchasing office buildings, retail venues, residential complexes, and mixed-use properties, but may fall short when it comes to identifying and avoiding potential landmines in hotel acquisitions. While purchase agreements used in hotel acquisitions may appear familiar at first glance, there are several key differences purchasers and sellers should be aware of before jumping into a hotel acquisition. Since every acquisition by a purchaser requires a sale by a seller, this article will provide some insight about things to look for during the entire hotel sale and acquisition process. Read on...

Andrew Glincher

As the economy continues to rebound, so too will the hospitality industry, and properties that have suffered through the recent slump will now have a new opportunity to compete for clients. Whether in the leisure or business travel market, hotels that haven't already done so need to take this opportunity to evaluate the condition of their facilities and determine whether renovations are possible, necessary, or desirable and whether the economics of these investments make sense. In some cases, such as most properties with franchise agreements, there are likely continuous requirements for maintenance and renovations during the term of the agreement, with funds set aside in replacement reserves to keep the hotel up to the brand's standards. Read on...

Andrew Glincher

The retail and commercial space within a hotel is one of its most important components. In some ways, it helps define the image of the property; a chic spa or hot new restaurant can generate publicity and excitement that brands the hotel in a very positive way. It also provides important services to hotel guests and having the right mix of retailers, restaurants, and other amenities contributes to the experience people have when they stay there. And of course, it provides a significant revenue stream. Most managers are very conscious of maintaining the correct balance for their property. But what are the best techniques for achieving that? Read on...

Andrew Glincher

Unfortunately, the advent of online reservation services and their increased accessibility to a traveling public with widespread access and greater comfort with Internet purchasing, has come at a time when the hospitality industry has gone through a major slump. Initially, faced with steep declines, many properties were happy to sell blocks of rooms at deep discounts to online resellers, who would then market and sell them to the public. But as travel industry began to recover, and these third party services began aggressively advertising and selling rooms at deeply discounted prices, the hotel industry quickly realized that they were, in effect, competing against themselves. How can properties adapt to this new reality? What issues should concern them and how should they deal with them? Read on...

Andrew Glincher

New rules governing eligibility for overtime pay for various types of employees have significant implications for the hotel industry. Designed to clarify and update what were perceived to be ambiguous and sometimes confusing regulations, the U.S. Department of Labor has redefined what constitutes exempt and non-exempt employees. Although the new regulations do not alter the fundamental rationale behind the Fair Labor Standards Act's overtime rules - that employees who work over 40 hours per week must receive overtime pay unless they are otherwise exempt - these new developments are extremely important for hotels, especially those whose workforces are not governed by collective bargaining agreements. Read on...

Andrew Glincher

Under most circumstances, hotel owners want to maximize the value of their properties. However, doing what appears to be the opposite - arguing that your property is worth less - can actually have a positive impact on your bottom line. Having a lower valuation is desirable for the purposes of real estate tax assessment. The lower the valuation, the lower the property taxes. At a time when the economy is weak and the hospitality industry is suffering, any cost-saving can be helpful and a reduction in property taxes can sometimes provide a good financial cushion. Read on...

Andrew Glincher

The economy has caused serious problems for numerous hotel properties across the country, as it has for every segment of the travel and hospitality industries. But challenges for some can mean opportunities for others. With so many properties in distressed financial condition, there are buyers in the marketplace, actively seeking to identify opportunities. There are individuals and companies with the resources to buy and hold onto a promising hotel, and ride out the tough economy. Read on...

Andrew Glincher

What should a hotel manager do, for example, if an individual wearing an objectionable anti-war tee shirt appears in the lobby of the hotel? What if it's a group of people with tee shirts? What if they are carrying signs? What if they are legitimate hotel guests, who have reserved and paid for rooms? Can you ask them to leave the lobby, or the restaurant, or other "public" areas of the hotel? Does it make a difference if the person is simply wearing a tee shirt, but doing so quietly, as opposed to handing out flyers or circulating a petition? With the international political climate being what it is, this incident has some interesting implications for hotels as well, particularly since by their nature, they play host to diverse visitors from every country in the world. Read on...

Andrew Glincher

One of the most difficult decisions a hotel owner can face is whether or not to put a property up for sale - especially during a down economy. Values are less than they would be in a boom time, and there are fewer investors and fewer dollars available for acquisitions. Nevertheless, property owners aren't always lucky enough to be selling in a strong economy; many times, it's necessary to sell under less them optimal circumstances. Lower interest rates and financing costs can sometimes contribute to a greater price or at least help to offset declining revenues. Read on...

Andrew Glincher

How do you explain gender discrimination to someone from a country where women are prohibited from walking in the streets unescorted by a man? How do you explain racial discrimination to someone from a country that is still ruled by a caste system? How do you resolve disputes among supervisors and subordinates when the employees are from countries that have been at war for centuries? There is no industry in which these questions create more of a real-world challenge than the hospitality industry. With many layers of employees - ranging from management to entertainers to housekeeping and maintenance staff, whose formal education may differ and who may be relatively new to this country - the hotel industry has a very diverse personnel structure. Read on...

Andrew Glincher

Not since the building boom of the late 1980s was followed by the recession of the early 1990s has the hotel industry faced as trying a time as it does today. As then, the period of prosperity in the late 1990s and the seemingly ever-increasing demand for hotel rooms caused significant new construction in markets around the country. Similarly, an economic slide has caused a sharp decrease in business and leisure travel. Today, we have the added factor of the fear of terrorism causing many would-be travelers in the United States and around the world to feel more secure staying closer to home - placing the entire travel and hospitality industry in a precarious position. Read on...

Andrew Glincher

Many businesses in every industry go through periods in which they have to implement layoffs. The hotel industry is no exception. Since many of a hotel's costs are fixed - the property needs to be maintained, the restaurant needs to stay open - often the only way of reducing costs in the face of revenue shortfalls in through layoffs. Layoffs are always painful, but experienced managers have learned that they are sometimes necessary to protect the long-term viability of the business. Making these situations even more difficult is the possibility that laid off employees - who may be hurt and angry - will argue that they have been victims of discrimination. How do you prevent this type of difficult situation from leading to litigation? Read on...

Andrew Glincher

The economy is improving, hotel rooms are filling up again, and the marketplace is more competitive than ever. New projects are being planned, investors are looking for opportunities, and hotel owners need to take a hard look at their operations to make sure they are positioned to capture as much market share as possible. Is it time to add onto the property, constructing new guest rooms, or a conference center, or recreational facilities, or a spa? Are there relatively minor expenditures, short of new construction, that can add significant value? As with other aspects of hotel development and management, knowledge of the marketplace, knowledge of your clientele and insight into your own positioning are crucial. For example, upscale isn't always the way to go. What if there is a new convention center? In a large city, with an abundance of luxury hotels within a short distance, perhaps a three-star hotel, offering convenience, accessibility and relatively low cost for business travelers and convention-goers, would be far better. You need to identify your customer and the demands of your location. Read on...

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Coming up in September 2019...

Hotel Group Meetings: Uncommon Destinations

The last few years have been good to the Hotel Group Meetings industry and that trend is expected to continue into 2019. Planners are brimming with confidence due to an expanding economy and increased job creation, which typically results in a boost in corporate meetings. Given this promising outlook, planners are trying to outdo themselves to satisfy the high expectations of their clients. One notable trend is to integrate unusual settings into the meeting experience, hosting groups at local zoos, aquariums, museums, event centers, or other outdoor facilities. The goal is to embrace uncommon destinations, rather than a typical hotel conference room, so that meetings can be memorable, unique and stimulating. This is also part of another trend which is to support all things local - from hosting events at landmark city venues; to catering through local restaurants, food trucks and microbreweries; to hosting off-site excursions like agri-tours, athletic events or scenic 5k routes. However, though the setting might be spectacular, there are still some bedrock components that must be provided to ensure a successful meeting. Free, high-speed Wi-Fi is still one of the most requested services. Planners have to make sure that a comprehensive communication infrastructure is in place so clients can easily connect - and stay connected - to the network throughout the entire meeting experience. Also, technology tools can be used to streamline the booking, registration, and check-in process, and Radio Frequency Identification (RFID) materials can be utilized to ensure seamless access to conference events. There are also numerous software tools that encourage audience participation, as well as integrating polls, Q&A, surveys and games into speakers' presentations. The September Hotel Business Review will examine issues relevant to group meetings and will report on what some hotels are doing to promote this sector of their operations.