Library Archives

 
Nelson Migdal

To employ or not to employ? That is the question. The answer can be fairly easy, provided, the employer has taken care to ensure that it is fully protected pursuant to the terms of the hotel management agreement. What tips the scale will vary based upon many factors, imputation of liability, collective bargaining agreements, union labor vs. non-union labor, and the applicable law of the jurisdiction in which the hotel is located. Sophisticated owners and managers carefully address each of the issues related to employment in the hotel management agreement so if an employment related issue arises, it is clear which party is responsible. Read on...

William A. Brewer III

Today's business is sophisticated, complicated, and dependent on the legal system. Gentlemen's agreements have given way to written contracts devised by law firms, and the hotel industry is a prime example. Business transactions are generally arm's-length affairs where each side bargains in their own self-interest. Agency relationships, however, are entirely different. Many hotel managers drive hard bargains to include a provision in their management contract that expressly disclaims the existence of an agency relationship. Read on...

Tara K. Gorman

It's simple. It's all about control! A retail management agreement typically provides a hotel owner with much greater control over the day-to-day operations of a retail facility than a retail lease does. The first question a hotel owner should ask is, "do I really want control over the day-to-day operations of the retail facility?" The answer may vary from facility to facility. For example, the hotel owner may not wish to delve into the day-to-day operations of the sundry shop, but the food and beverage operation, that may be quite a different matter because the food and beverage experience is closely tied to the overall guest experience. Read on...

Andrew Glincher

Developers are increasingly finding alternative uses for ports. Through the years, port development has been the focus of many big cities from San Francisco to Boston and most recently, in Washington, D.C. as the nation's capital develops its Southwest Waterfront. Ports can be an economic boom for cities. In some cities, ports have become a tourist attraction. As ports generate more higher-income uses, this is good news for the real estate industry as the property values rise resulting in many redeveloped high-end apartments, condos, offices, restaurants, and of course, hotels. What challenges do hotel developers face when building near ports or on waterfront property? Read on...

Dan Brown

Any discussion of the benefits of arbitration over litigation generally parrots the "well known" benefits. That is, arbitration is generally viewed, by both lay persons and even by most attorneys, as a more economical and efficient method of resolving disputes than traditional litigation. Attorneys and parties are often surprised when arbitration includes complex and burdensome discovery, motion practice, and expensive hearings. As explained below, the line between arbitration and litigation has, at least in some instances, disappeared. Read on...

Nelson Migdal

The credit world is considered by many to be in turmoil. Real estate values as measured through investment sales are below the lofty heights of just months ago. Residential absorption is dismal in many markets. Nevertheless, the possibilities for mixed-use development, anchored by an imagination catching array of amenities, remain strong, both domestically and internationally. In such a climate, the hospitality industry is attracting interest from experienced developers, owners and operators to be sure. However, there are new players in the game who see the allure, but are less familiar with the rules. This article provides a brief overview, both historic and current, of the law relating to hotel management agreements. Read on...

Theodore C. Max

The move by international fashion labels into the hospitality industry is a logical extension of the strong brand awareness accorded high profile designers and their fashion brands. Fashion designers can greatly enhance a property by lending the cachet and prestige of their brand name as well as through their design talents. Recently, a jury in Maryland in the United States District Court for the District of Maryland found for the owner and held that Ritz Carlton (and Marriot International) had breached in hotel management agreement and its fiduciary duty by building a new Bulgari-branded hotel only seven kilometers from the Ritz Carlton Bali Resort & Spa under which Ritz Carlton served as an agent. Read on...

Daniel Croley

Due in large part to Governor Davis' efforts to retain his job, none of his selected lobbyist and interest groups were "left behind" at the conclusion of the 2003 legislative session which resulted in passage of a whole raft of labor-related legislation. These new laws impose additional costs and obligations on California employers who opposed such obligations, because of the challenging economic environment-among other reasons. Prudent employers will want to consider reviewing and modifying their polices and practices to ensure compliance with these new laws and to deter and defeat any claims based thereon. These and other important changes and strategic actions for compliance are set out below. Read on...

Daniel Croley

Under a recent Harvard study, 6 percent of U. S. traffic accidents are caused by drivers talking on cell phones, producing 2,600 deaths and 330,000 injuries each year. Prudent Employer's would be well-advised to consider what risks are posed when their employees make business calls while driving. Some recent lawsuits vividly drive this point home: In a pending lawsuit in Virginia, a Palo Alto based law firm was sued for $30 million when an attorney, making business phone calls while driving, veered off the road killing a child. Read on...

Tara K. Gorman

In the traditional hotel owner/operator relationship the lines are drawn in the sand and the roles are clear. Just as the titles imply - the hotel owner owns the hotel and the hotel operator operates the hotel. The hotel management agreement governs the relationship and that's that. When a joint venture enters into the equation, these lines are not so clear and which party is taking on which role at which time gets to be an interesting, and often complicated question. Before a joint venture can be formed, several basic questions must be asked and answered. Read on...

Dan Brown

During the past couple of years, it's been hard to miss articles in the press concerning one or more aspects of the proliferation of the "condo hotel." Those articles have generally dealt with potential issues that might arise from the new mixed property uses, the soundness and reasons for investments in condo hotels, and legal issues relating to the purchase, sale, and management of the condo hotel. One potential issue that was the subject of many articles concerning the condo hotel boom - - including an article by this author - - was whether dissatisfied condo-hotel unit owners would seek to assert claims against developers alleging that the sale of a condo hotel unit constitutes the sale of a security, thus giving rise to the right to rescind a condo unit purchase contract and seek damages, under federal and state securities laws. Read on...

William A. Brewer III

The wave of mergers and acquisitions activity, fueled by record hotel profits, globalization and an influx of private equity money, is increasing the market power of the big industry players. Hotel giants have been accumulating multiple brands - either in multiple market sectors or in a single sector - and that trend is expected to continue. As a result, fewer competitors hold larger market shares with more control over the nature of competition in various market segments. These industry trends can draw unwelcome attention from more than just the trustbusters. Competitors and business partners alike have significant incentives to engage in private antitrust litigation, and this only adds to the antitrust concerns that keep your lawyer up at night. Read on...

Nelson Migdal

The economic indicators that track occupancy, room revenue and average daily rates appear to be going from worse to still worse. The dollar value of commercial mortgage-backed securities issued in connection with hotels during the past few years is reportedly a very intimidating $30 billion. One of the key concerns on everyone's mind is what happens next? In these times the underlying mechanism may begin with a deed in lieu of foreclosure, or the court appointment of a receiver to assert dominion and control over the hotel. Some of these matters will go right to litigation with no intervening process to attempt to negotiate a resolution. Some of these matters, and perhaps it will be a majority of these matters, will be resolved through negotiation to try to achieve a workable result and preserve any capital that might remain for the preservation of the asset rather than the payment of professional fees. This compelling article will assist owners and operators, alike as they navigate these treacherous waters. Read on...

Nelson Migdal

From the looks of it, boutique hotels are popping up everywhere you look. This article addresses the pros and cons of the aftermath of the boutique boom and what lessons might be learned as we move through the current paralysis of the credit markets and the daily operational struggle to both preserve rate and maintain occupancy. This compelling article will assist owners and operators, alike as they carefully analyze this niche of the hotel industry, as well as give you a sense of what to look out for if you are considering owing, operating or investing in a boutique hotel. Read on...

William A. Brewer III

As we know from experience, the economic pressures affecting the hospitality industry can create contract-related pressures for hotel owners and operators. As an example, disputes frequently arise during economic downturns between hotel owners and operators concerning their rights and duties under their management agreements. The industry's key players need to understand how hotel management agreements are likely to be interpreted and what they can do to protect their rights. Read on...

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Coming up in April 2019...

Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.