September 27, 2011

Hotel Industry Alert: Some things to feel (very) good about!

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
27 September 2011

Hotel Lawyers with some (very) good news.

Of course there are plenty of macro economic issues and industry challenges to worry about. (See It's not just me. The market has changed.)

But there are also some things to feel good about. If you want to be gloomy, go read your newspaper. If you want to cheer up, keep reading.

Here are a few nuggets of information to brighten your day.

[The slides in this article are taken from presentations at The Lodging Conference in Phoenix by Mark Woodworth of PKF, and Vail Brown of Smith Travel research. We appreciate their permission to use their slides.]


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September 25, 2011

Hotel Lawyers in Phoenix: "It's not just me. The market has changed in just the last 60 days!"

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
25 September 2011

Hotel lawyers: Are we at a turning point in the industry?

Our hotel lawyers were at The Lodging Conference in Phoenix last week, taking the measure of the hotel industry. It was pretty interesting. Some said August was a "turning point" and they were not referring to a good thing.

At the Hotel Law Blog, what happens in Phoenix does not stay in Phoenix. Here's what we heard.

"It's not just me. The market has changed in just the last 60 days!"

While many people at the Lodging Conference said recent market volatility had no impact on them, their transactions or their deals, this was clearly not the case for all.

A widely-held view was that it seems like someone hit the "PAUSE" button on hotel finance and purchase-sale transactions. Some fear a "reset" button may also have been tripped. The global market turmoil of the past 30-60 days triggered by the inability of our politicians to resolve deep U.S. budget issues, along with questions about political resolve by European governments to deal with their own problems continue to raise major issues.

And there are all the usual specters of big increases in taxes, continued high unemployment, sagging consumer confidence, rising labor costs, rampant inflation to deal with $14 trillion of debt, operating costs rising faster than RevPAR as well as war, plague and pestilence.

So here are some insights from industry leaders and vignettes JMBM's hotel lawyers gathered at the Phoenix Lodging Conference. In many cases we have omitted the speaker's names because I was not certain that the comments were intended for attribution.

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September 20, 2011

Hospitality Lawyers in Phoenix for the 2011 Lodging Conference. What's happening to the hospitality industry?

by the JMBM Global Hospitality Group®

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
20 September 2011

Hotel Lawyer at the Phoenix Lodging Conference: Where are we going from here?

The Lodging Conference kicks off tonight at the Arizona Biltmore as roughly 1,500 hotel industry leaders gather for the next 3 days. This is one of my favorite hotel finance conferences of the year, and JMBM's Global Hospitality Group® will be well represented. Senior GHG members Guy Maisnik, Cathy Holmes, Bob Braun, David Sudeck and I will all be here.

Aside from the great connections and catching up, the one thing everyone at this conference will be looking for is some sense on what happens to the hospitality industry from here. The first part of the year was robust transactionally speaking, with lots of hotels changing hands and pretty good financing for established hotels with good cash flow. But it seems like everyone got spooked a little in late August about the time Congress was deadlocked on a budget. Then the U.S. credit rating was downgraded, and the European debt crisis has continued to foment trouble, initially focused on Greece, but now more on Italy with its credit rating decrease, with concerned looks toward Spain and elsewhere.

On the one hand, one can argue that all this should have no affect on the hotel industry, at least in the United States. But the markets are unsettled and everyone seems to be taking a second look before they continue with business as it was earlier this year. And of course, the lodging industry has a long-term direct correlation with the economy. So, if the increasing pessimism pointing to an impending recession wins the day, we are all in for a bumpy ride.

I will be very interested to measure the mood of The Lodging Conference this year, and see how everyone else is viewing the current situation. Do we catch our breath and continue from roughly where we were, or do we hold our breath and get ready for a roller coaster ride? I may have some more insights for you shortly.

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September 20, 2011

Hotel Labor and Employment Lawyer Update: Controversial Union Rights Notice Subject to Legal Challenge -- Employers Should Not Rush To Post It

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
20 September 2011


On September 10 2011 , we let you know that the National Labor Relations Board (NLRB) is making it harder to stay union free.

As of November 14, 2011, most private sector employers are required, by a controversial new National Labor Relations Board rule, to post a notice advising employees of their rights under the National Labor Relations Act.

Now, according to my partner, labor and employment lawyer Scott Brink, the NLRB's authority to issue the new rule is already the subject of legal challenge.

Because NLRB enforcement of the new rule may be delayed -- pending the resolution of a lawsuit challenging the validity of the rule -- employers should not rush to post the notice before the November 14, 2011 deadline.

Scott's brief article below explains what is going on and why you need to pay attention to this important development.

A link to the NLRB's Form of Notice, which was issued September 14, 2011, may be found at the end of the article.

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September 12, 2011

Hotel Franchise Lawyer: Hotel Franchise Agreements and the 5 biggest mistakes a hotel owner can make

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
12 September 2011

Hotel Lawyer with some tips on Hotel Franchise Agreements and the 5 biggest mistakes a hotel owner can make

Hotels need brands, and brands need hotels. For many years, hotel brands have been growing in importance for the success of hotels in the United States and abroad. The trend toward branding is quite a phenomenon. According to numbers we have seen, In the early 1990s, approximately 40% of the hotels in the U.S. were branded and the balance were independent. Now the number is probably closer to 80% or more of the hotels are branded or brand-affiliated.

The branding is often accomplished by a franchise or license agreement from a company owning the brand. Other times it is accomplished by a branded hotel management company entering into a management agreement with the owner of the hotel, providing both the brand and management for the property.

Although we have spent a lot of time on Hotel Law Blog discussing hotel management agreements, today we are going to focus on the franchise or license agreement arrangements. With more than 20 years' experience working with more than 1,000 hotel management and franchise agreements, we have some perspectives that may be worth considering.

Hotel owners keep falling into the same traps

One of these perspectives of our hotel lawyers is that many sophisticated hotel investors and owners seem to fall into a handful of traps that would be easy to avoid. And this same handful of traps catches the unwary time and again.

So this article focuses on hotel franchise agreements and outlines the 5 biggest mistakes an owner can make when seeking a hotel franchise arrangement. If this sounds all too familiar, you have probably learned these lessons the hard (and expensive) way. If you haven't stumbled on these yet, you won't want to miss the warning flags and the traps they portend.

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September 10, 2011

Hotel Labor and Employment Lawyer Alert: The NLRB is making it harder to stay union free.

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
10 September 2011

A highly controversial new law, which many employers believe will unfairly foster union organizing, requires that employers post notices of employee rights -- including the right to organize, join or discuss the activities of a union. The law goes into effect on November 14, 2011.

Employers must comply with the new rule whether they have a unionized work force or not.

My partner, labor and employment lawyer Scott Brink, has outlined in his article below the requirements the new rule imposes on employers.

Scott and the labor and employment lawyers of JMBM's Global Hospitality Group® have represented the hospitality industry in all aspects of labor and employment law including union prevention, collective bargaining negotiations, and defense of unfair labor practice charges before the NLRB. If you have questions about how this new rule will impact your hotel business, we can help.

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September 8, 2011

Tips from hotel franchise and management lawyers: Beware the trap of "changing brand standards"

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
8 September 2011

Hotel Lawyer on changing 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.

And what if one of the ground rules is that only one party can change the rules at any time? And the other party would have to follow them, no matter what? This is what can happen to hotel owners that agree, often for very good reasons, that a brand can change its standards for the hotel.

Sometimes the change in brand standards is not so good for the owner... one day you're turning a profit and the next day you're in the hole, paying for expensive changes required by the "new brand standards," with no return on investment in sight.

The management or franchise agreement sets the ground rules and allocates risk between the hotel operator and the hotel owner. Negotiating the agreement, which will include "brand standards", is one of the most important things hotel owners will ever do for their hotel investment.

Here is some advice from my partner, Robert Braun, co-author with me of the HMA Handbook.

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