Terminating hotel management agreements when things don't work? Not easy, but not impossible either.
By Jim Butler and the Global Hospitality Group®
Hospitality Lawyers | Authors of www.HotelLawBlog.com
27 May 2009
Hospitality Lawyer: Fixing hotel management agreements that don't work.
What is one of the nicest acknowledgements of professional accomplishment a hotel lawyer might receive? In my book, being recognized by the New York Times as an expert in a core aspect of my legal and advisory practice is pretty close, and that is what happened yesterday in a Times article by Jonathan D. Glater about the increased friction between hotel owners and operators now erupting into litigation in the case of the Four Seasons Aviara and the Fairmont Turnberry.
As I said in another New York Times quote last month by Martha C. White, we are facing the prospect of hotel bankruptcies and foreclosures reaching levels not seen since the last big downturn of the 1990s.
And indeed, it is in difficult times like these when hotels fail to meet debt service -- or even operating expenses -- that owners and lenders become very frustrated with operators that prefer their own interests to those of the hotel. And that is why Jonathan Glater's article was looking at two high profile emerging battles where owners are standing up to operators and saying, "I'm mad as hell, and I'm not going to take it anymore."
Here's how we see it.
