Articles Posted in Ask the Hotel Lawyer™

Published on:

27 April 2009

Hotel Lawyer with more information about the World Health Organization upgrade to “Phase 4” (on a 6 phase system) of the threat of a flu pandemic.

Today I received more reader comments on swine flu blog than I have for a long time. Clearly, blog readers are concerned about the swine flu catching the headlines. And after concern about health and safety issues, the potential implications of a “flu pandemic” are severe for the economy, and particularly, the travel and lodging industry. This was discussed in the article earlier today entitled Swine flu or SARS 2?

One of the bullet points in the cited article noted that the World Health Organization or WHO had increased its rating for the seriousness of this threat by a full notch to “phase 4.” In answer to your questions, here’s what that means.

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Published on:

27 April 2009

Hotel Lawyer with breaking concerns over a flu pandemic. International fears of a flu pandemic rose today as the death toll from swine flu in Mexico rose to 149. Cases have also been reported in the United States, Canada, Spain and New Zealand. What does this mean for the lodging industry and the economy?

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Published on:

22 April 2009

Hotel Lawyer with the latest PKF Consulting and JMBM survey results.

As I was getting ready to publish JMBM’s latest survey, I received an email from our friends at PKF Consulting with their 2009 Hospitality Investment Survey. The results of both surveys are interesting for different reasons. Here they are.

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Published on:

27 July 2008

Hospitality Lawyer — Why we need to maintain the discipline to keep ADRs up! As hotel occupancy rates are tending to soften nationally, the data from Smith Travel Research (STR) tells us that the industry has continued to do well because average daily rates (ADRs) have continued to rise, particularly in the Top 25 markets, and in the market segments that STR calls Luxury, Upper Upscale, Upscale and Midscale without Food & Beverage.

But there is a new threat to industry profits looming on the horizon — something beyond pestilence, war, recession, and falling airline seat capacity, and this is within our own control if we will just behave rationally. Here’s the scoop from www.HotelLawBlog.com.

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Published on:

Author of www.HotelLawBlog.com
21 June 2008
Hospitality Attorney’s top insights to hotel industry. As we approach the half-way mark in 2008, the hospitality lawyers in JMBM’s Global Hospitality Group® thought it would be interesting to determine our readers’ “top picks” of all the articles we have posted this year. We could almost say that the top three picks are hotel financing, hotel financing and hotel financing. But here are the top three picks by “Topics” at www.HotelLawBlog.com:

(1) Hotel financing and hotel values in buy-sell transactions
(2) Hotel management agreements
(3) LEED and GREEN hotel development

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Published on:

Author of www.HotelLawBlog.com
1 February 2008
Keywords:

Hotel Operating Agreement, HOA, Hotel Management Agreement, HMA, Hotel Management Contract, Management Contract. Hotel Operator, Hotel Manager, Hotel Owner. RFP for Hotel Manager. RFP for Hotel Operator, How to get a great hotel operator.

Terminology

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.” However all these terms can be used interchangeably and mean the same thing, just as with hotel operator or hotel manager.

Whatever they are called, Hotel Management Agreements allocate risk between the hotel manager and the hotel owner. They are critical in determining the profitability and value of a hotel.

Hotel Lawyer on hotel management agreements and operator breach of duty. It may be an exaggeration to say that “JMBM wrote the book on hotel management agreements,” but we certainly know the area and have at least written a few chapters in that book. We have been helping owners, developers and lenders with many hundreds of hotel management agreements over the past 20 years. We have negotiated, re-negotiated, terminated and litigated almost every aspect of them, so the only thing surprising about the latest jury verdict handed down on January 25, 2008 against Marriott International and Ritz-Carlton is that it shows a continuing disconnect of operators who choose to ignore their contractual and fiduciary duties. (Search “Management Agreements” at www.HotelLawBlog.com)

In this case, one of our clients owned the Ritz-Carlton Bali which was managed under a typical long-term, no-cut management contract. A few days ago, after a 3 week trial, a jury sitting less than 10 miles from Ritz-Carlton’s home office ruled that the management contract was breached by Marriott International and Ritz-Carlton, giving the owner the right to terminate the contract, awarding $382,304 in compensatory damages, $10 million in punitive damages, plus attorneys fees and costs to the owner. The Wall Street Journal published an article today by Tamara Audi on the case. How does this happen?

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Published on:

Author of www.HotelLawBlog.com
29 January 2008
Hotel Lawyer Los Angeles Hotel Investment Conference. A year ago today, we predicted that the hotel industry might be acquired through equity-fund driven acquisitions. (Size no longer matters, and Two deals that may change the lodging world forever). Since that time, many REITs and Hilton were gobbled up (Hilton acquisition) before the capital markets all but seized up in August 2007.

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Published on:

by Jim Butler and Robert Braun
19 March 2007
Keywords:

Hotel Operating Agreement, HOA, Hotel Management Agreement, HMA, Hotel Management Contract, Management Contract. Hotel Operator, Hotel Manager, Hotel Owner. RFP for Hotel Manager. RFP for Hotel Operator, How to get a great hotel operator.

Terminology

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.” However all these terms can be used interchangeably and mean the same thing, just as with hotel operator or hotel manager.

Whatever they are called, Hotel Management Agreements allocate risk between the hotel manager and the hotel owner. They are critical in determining the profitability and value of a hotel.

In order to consummate any substantial business transaction, there are inevitably some “challenges” to overcome. Hotel management agreements are no exception: in part because of their complexity, and in part because hotel management agreements typically transfer effective control over valuable assets for several decades, and their terms can easily enhance — or diminish — the value of hotel by a staggering amount.

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