17 February 2009
Hospitality Lawyers with the latest reports on what is happening at hotels in the U.S. and Europe.
It is always great to get the global perspective from Mark Woodworth of PKF Consulting (see Latest insights from JMBM’s Hotel Attorneys and PKF Consulting on what lies ahead for the hotel industry) and Mark Lomanno of STR, but that is only one perspective.
Here is what the hospitality attorneys of JMBM’s Global Hospitality Group® are hearing from “the field” in real time . . .
Steep declines and a mighty attempt to controls costs. Are the brands in step?
My “top field operatives” report that both the United States and Europe are seeing:
- Exceptionally weak January results — with room night sales down 25-30% against last year. Steep declines are being noted amongst the bread and butter midweek corporate segments.
- 2009 Budgets are only now being finalized. Unlike previous years when the Marriott-Hilton-Starwood and other chain-managed hotels were in a rush to finalize the next year’s operating budgets, this year the chains are just now closing out 2009 budgeting, primarily because they have been unable to predict where the year is going.
- “Brand Management” is coming under fire as not totally suitable for ‘street warfare’ like we’re now in. With Marriott in particular, the “rule book” by which they now manage their hotels….has no instructional chapter for times like these. I wonder if this phenomenon will reverse the trend of the last 10-15 years for unbranded hotels to become branded. The net flow went the other way in the early 1990s.
- Operating cost reduction plans play a prominent role in the 2009 budgets. Each chain has both a “stimulus plan” and a litany of cost reduction options. The best I have seen is Starwood’s suggesting that Sheraton airport hotels only furnish one bar of soap per guest bathroom!
- This will be a great year for talented asset managers who will really earn their keep in driving revenues and cutting waste. Rooms will be sold, not bought. Managing the brands will be key in cutting costs while delivering on (and managing) critical guest expectations.
If you are thinking that your manager needs “managing,” (or even a furlough), give me a call. We have some ideas.
Other articles on the Global Financial Crisis & Recovery and Outlook & Trends
For other articles about the Global Financial Crisis and where this all takes us, here are some recent articles and links. You can also go to Global Financial Crisis & Recovery and Outlook & Trends on www.HotelLawBlog.com
- Hotel Lawyer: Stimulate this! The lighter side of political commentary from the centuries
- Hotel Lawyer: What lies ahead? What’s the bailout cost $700 billion? $3 trillion? $20 trillion? What does Dr. Doom mean by an L-shaped Depression?
- Hotel Lawyer: Stimulus Bill and financial recovery — summary of selected tax provisions
- Hotel bankruptcies, workouts and turnarounds: Hotel Lawyers on the TARP, the TALF, and the ugly. What does it mean to hotel owners and lenders?
- Hotel Lawyer: Uh Oh! Now they are using the D word
- Hotel Lawyer: New hotel data and revised predictions for 2009. Increased hotel loan stress, falling NOI and slumping values. It’s going to get worse before it gets better.
- Hotel Attorneys with the latest “updates from the field”
- Hotel Lawyers: How do we pay for this? And what happens next?
- Distressed hotel assets find no fast relief in bailout plan. Up to $1 trillion “bad bank” to take toxic assets. No critical details yet.
- Troubled Hotel Loans: Turning point or just another ledge on the cliff before we go over the edge? Bad bank rescue and RTC-2 ahead?
- Latest insights from JMBM’s Hotel Attorneys and PKF Consulting on what lies ahead for the hotel industry . . .
- Fortunes will be made . . . or lost . . . in the wake of The Financial Bailout Bill and the Panic of 2008. What happens AFTER the Bailout Bill . . .
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $87 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who’s your hotel lawyer?
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Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $125 billion of hotel transactions, involving more than 4,700 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.
Jim Butler is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.
Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of 50 seasoned professionals with more than $87 billion of hotel transactional experience, involving more than 3,900 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects — frequently integrated with energizing lifestyle elements.
Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.
Contact him at jbutler@jmbm.com or 310.201.3526. For his views on current industry issues, visit www.HotelLawBlog.com.