Articles Posted in Lifestyle Hotels

Published on:

24 September 2019

Click here for other cannabis-related articles.

The column below was first published in the October 2019 issue of Hotel Management and is reprinted with permission.

Why are so many hoteliers talking about cannabis hotels?
by
Jim Butler, Hotel Lawyer

Legal cannabis sales exceeded $10 billion in 2018, and are expected to exceed $20 billion by 2025. 33 states plus the District of Columbia have legalized marijuana for recreational  or medical purposes (or both). With all this activity, many sense an opportunity to generate more guests and profits by developing “cannabis hotels”.

Are you recommending your hotel clients dive into this?

No, except as a limited opportunity to explore carefully. Our law firm is extremely active in the hospitality industry and is one of few full-service firms in the country with a dedicated cannabis group, so we would certainly present a cannabis opportunity to the hotel industry if we thought it was viable. But we think cannabis is a “false flag” opportunity for hotels, presenting more problems than opportunities.

You say more problems than opportunities. Why?

Cannabis is still a Schedule 1 substance prohibited by Federal law. Federal agents can seize product and arrest people trafficking in cannabis products, even in states where it is legal.

The Federal illegality spooks banks with FDIC insurance. Does any hotel want to risk its banking relationships and lines of credit to dabble with cannabis?

The IRS can deny ordinary and necessary business deductions to taxpayers who traffic in Schedule 1 substances.

The regulatory situation is very complex with widely divergent state and local regulations, making it difficult or impossible to formulate uniform procedures and business approaches.

In many jurisdictions, it is likely that the property would lose all liquor licenses if it distributes cannabis products. CONTINUE READING →

Published on:

02 June 2019

Important data on Boutique, Lifestyle, and Soft Brands

Each year since 2016, The Highland Group has published the Boutique Hotel Report, an annual compilation of data describing the boutique hotel segment. Kim Bardoul, a partner with the group, specializes in boutique hotels and produces the report each year.

A resource for developers, consultants, appraisers, operators, lenders and brands, the report defines lifestyle, soft brand collections and independent boutique hotels; details room distribution; describes current market share and recent trends; and compares boutiques with traditional hotel types for RevPAR, F&B revenue, Trev PAR and EBITDA.

With boutique hotels one of the fastest-growing segments in the U.S. hospitality industry, and $20 billion in revenue in 2018, The Highland Group’s report is a valuable tool for anyone interested in how they might take advantage of their strong performance. Following are a couple of charts I found interesting, and that illustrate the data available in the full report.

Lifestyle and Soft Brand Collection supply increased dramatically from 2000 to 2018 – Lifestyle boutique rooms increased by 13% from 2017 to 2018, and Soft Brand Collection rooms increased by 32%. The charts below, provided in the report, illustrate this trend. CONTINUE READING →

Published on:

15 August 2013

Hotel Lawyer on the reported sale by Marriott of 3 Edition hotels.

Craig Karmin and Alexandra Berzon of the Wall Street Journal broke a big story yesterday evening which appeared in the August 15, 2013 US edition of the paper at page C3. The headline is “Marriott Close to Deal to Sell Three Hotels to Abu Dhabi Fund.
The story, in which I am quoted, describes reports from people close to the deal, that Marriott International is about to close a sale of 3 Edition hotels in London, New York and Miami Beach. The reported buyer is Abu Dhabi Investment Authority, or ADIA.

Other highlights of the article:

  • Marriott has said that it planned to invest up to $800 million in the 3 hotels
  • David Loeb of RW Baird estimates that Marriott has already spent about $575 million to buy, convert and upgrade the 3 properties
  • Marriott is expected to make a profit on the sale

So what does this transaction mean?

Here is what I think this transaction means:

CONTINUE READING →

Published on:

20 October 2012

The hotel lawyers of JMBM’s Global Hospitality Group® frequently attend hospitality industry conferences to stay current on critical issues affecting hotel owners, investors and lenders. My colleagues, Guy Maisnik, Bob Braun and David Sudeck will attend the Boutique Lifestyle Leadership Symposium in Los Angeles next week.

EXTENDED BODY:

BoutiqueConf2012Announce.jpg

Published on:

Author of www.HotelLawBlog.com
9 July 2007
Hotel Lawyer on eco-friendly hotel financing in Hollywood California. Today, JMBM issued a press release announcing that its Global Hospitality Group® closed the senior debt portion of the capital stack on one of the largest single hotel mixed-use projects in the country — and one bound to be a “Green” project at that! The complex construction loan transaction was for JMBM client, HSH Nordbank AG, a leading credit institution headquartered in Hamburg, Germany, and particularly renowned for very large construction loans on luxury hotel projects.

This is a significant transaction for several reasons.

CONTINUE READING →

Published on:

Author of www.HotelLawBlog.com
18 June 2007
Hotel Lawyer in Florida. While Gloria Estefan’s fans are anticipating the September 2007 release of her new Spanish-language album, 90 Millas, featuring original music inspired by her native Cuba — the hotel industry is eagerly awaiting the opening of her new luxury resort, Costa d’Este in Vero Beach, Florida. Gloria and Emilio Estefan are not new to the hospitality industry — they currently own 5 Cuban restaurants in Florida and Mexico, and the Cardozo Hotel in Miami. Their new mixed-use resort will include 94 hotel rooms, meeting space, a restaurant and spa. The resort is scheduled to open in January 2008, according to Benchmark Hospitality International, which will manage the property.

CONTINUE READING →

Published on:

Author of www.HotelLawBlog.com
14 June 2007
Hotel Lawyer on the Schrager-Marriott marriage and its impact on lifestyle hotels. One of my steady themes here at www.HotelLawBlog.com, is that lifestyle hotels are the hottest thing going in new hotel development, particularly hotel mixed-use. (See, for example, “The new “LIFESTYLE” hotel brands are changing the hotel industry and hotel mixed-use.“) But at a press conference held on the roof of Schrager’s Gramercy Park Hotel in Manhattan at 10:00 am on June 14, 2007, Bill Marriott (chairman and CEO of Marriott International) and Ian Schrager (the founder of Ian Schrager Hotels, now known as “Morgans Hotels”) surprised most of the hotel industry with their news. Marriott (age 75) and Schrager (now 60) announced formal plans to partner in the creation of a new lifestyle boutique hotel brand. The as-yet-unnamed-brand will provide the high-design, boutique, lifestyle product that Schrager invented, with Marriott’s world-class hotel operating resources and development support.

For several years, industry experts have wondered how Marriott International could surrender leadership in the lifestyle boutique area to Starwood’s W brand, which some call a knockoff of Schrager’s original concept. Only half in jest, some predicted that Marriott would spawn a similarly hip “M” brand (which looks a lot like a “W” turned over). If Marriott is to reclaim its share of this exploding lifestyle segment, it clearly needed to move quickly to make up for lost time. But many think the marriage of Ian Schrager and Bill Marriott is doomed to an early divorce, if it even makes it to the conjugal bed. Doubtful pundits cite fundamental incompatibilities of style and approach. Meanwhile, Schrager and Marriott are projecting that at least five firm development deals will be signed for the new brand before 2008, and are looking for more than 100 hotels to be open within a decade.

CONTINUE READING →

Published on:

Author of www.HotelLawBlog.com
2 April 2007
Hospitality Lawyer on the new “LIFESTYLE” hotel brands. What is a hotel lifestyle brand? That is a great question and one with some profound implications that we will explore a bit today. I would like to do that using Miraval — one of the new lifestyle brands — as something of a “case study.”

CONTINUE READING →

Published on:

Author of www.HotelLawBlog.com
23 March 2007
Hospitality Lawyer on “LIFESTYLE” hotel mixed-use development. Hotel mixed-use has emerged as one of the few ways hotel developers may be able to make a new development economically feasible, with skyrocketing construction costs. It has also become one of the hottest things going as developers of other real estate uses (shopping centers, office, retail, residential and entertainment) discover the big “IRR Premiums” that may be harvested from well-planned and tightly integrated hotel mixed-use projects. (See, my earlier postings on www.HotelLawBlog.com from The Hotel Developers Conference® in Rancho Mirage. about how green hotels may be in all our futures, hotel mixed-use is the pass key to unlocking new development and bigger profits, and the perspectives of the most successful leaders in hotel mixed-use today)

CONTINUE READING →

Published on:

Author of www.HotelLawBlog.com
7 March 2007
Veteran hotel developers, speaking at The Hotel Development Boot Camp – the pre-conference session of JMBM’s Hotel Developers Conference™ — recall the days when the hotel component of a mixed-use development was the “blood donor” of the project. Now, hotels are reaping profits in mixed-use environments and are viewed as essential components for infusing excitement into a mixed-use project. Indeed, mixed-use developers are wooing hotel developers in hopes of striking deals that will provide them with the means for providing a community hub for their projects.

CONTINUE READING →