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1. The ADA Compliance and Defense Guide — free download

2. Hotel Lawyer on HMAs: “The shrinking terms of hotel management agreements”

3. Hotel Financing 2015: JMBM’s “preferred” EB-5 construction financing program for top developers and projects

4. The “new breed” of condominium hotels — Key to financing new hotel development? Selling condo hotels as “securities” under new SEC Rule 506(c) . .

5. Los Angeles is the new magnet for real estate investment

6. FAQs on “service animal” requirements of the ADA. What every hotelier needs to know. Why Uber was sued over service animals.

7. Why this may be the time to buy or sell a hotel management company

8. Hotel development & EB-5 financing: Why you don’t want to form your own regional center

9. Hotel Liability for Guest Information — What you need to know and how to avoid liability.

10. Hotel Franchise Lawyer: 8 things to negotiate in your next franchise agreement

11. Hotel Lawyer: The 5 questions every owner should ask before selecting a hotel brand

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

13. Hotel Lawyer with insights on "How to get a great hotel operator"

14. The importance of Comfort Letters in financing franchised hotels

15. Hotel Lawyer: Something everyone buying or building a golf course should know . . .

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This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer. Please contact me at Jim Butler at jbutler@jmbm.com or 310.201.3526.

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25 February 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on ADA Compliance and Defense.

Last year, JMBM secured a legal victory for our client Zarco Hotels after they were accused of ADA violations by a serial plaintiff. Our strategic approach led to a dismissal of the claims and compensation awarded for legal fees. In the article below, JMBM partner Stuart Tubis examines the case details and outlines the practical steps businesses can take to defend themselves against meritless lawsuits.

JMBM wins second ADA lawsuit for Zarco Hotels,
bringing total defense awards to $113K

by

Stuart Tubis, JMBM’s ADA Compliance & Defense Group

Recently, JMBM reported that it successfully defended a website accessibility lawsuit on behalf of its client Zarco Hotels, against serial plaintiff Traci Morgan. In that case, the court awarded Zarco Hotels $55,414.84 in compensation for its attorneys’ fees and costs.

JMBM and Zarco Hotels have prevailed again. On July 11, 2023, a different court awarded Zarco Hotels attorneys’ fees and costs related to a separate ADA lawsuit regarding hotel reservations.

Garcia v. Zarco Hotels, Inc., Case No. 21STCV00023 (Superior Court of California, County of Los Angeles) involved claims by serial plaintiff Orlando Garcia, who has filed hundreds of similar lawsuits against businesses in California. The same law firm, Potter Handy, LLP (AKA Center for Disability Access) represented Morgan and Garcia in both cases.

Garcia alleged that the Hollywood Hotel’s reservation requirements did not comply with the ADA because the website did not provide enough information about the physical accessibility features of the hotel. See our article on this issue here: ADA Requires Hotels To Describe Accessibility Features On Website.

However, Garcia failed to recognize that the Hollywood Hotel’s website and reservation system exceed compliance with the ADA; JMBM’s ADA Compliance and Defense team, led by Stuart K. Tubis, Esq. and Martin Orlick Esq. showed that it provides more information than the law requires about ADA accommodations at the hotel. Still, Garcia refused to dismiss the lawsuit, despite evidence showing that the claims lacked merit.

In our practice, we find that ADA plaintiffs will often press forward with lawsuits, even when they lack merit. This is likely because many defendants find it easier to settle the case and pay the plaintiff rather than defend themselves in court.

Zarco Hotels was not intimidated, and filed its motion for summary judgment on July 15, 2022. Facing a losing battle, Garcia finally dismissed the lawsuit on October 6, 2022. CONTINUE READING →

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21 February 2024

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Click here for the latest articles on Hotel Management Agreements and Hotel Franchise & License Agreements.

To Brand or Not to Brand

by Robert Braun, Co-Chair, JMBM Cybersecurity and Privacy Group;
Senior Member, JMBM Global Hospitality Group

While some companies in some industries have a tendency to consolidate and eliminate brands, the hotel industry is different. Most of the leading hotel companies with brands, such as Marriott, Hilton, IHG, Hyatt, and Accor, regularly acquire or create new brands or flags. Today, Marriott has 30 flags, Hilton has 22, IHG has 14, Hyatt has 29, and Accor has 40, and that’s just the tip of the iceberg. With so many flags to choose from, it’s easy to overlook another choice – no brand at all. While picking a brand is an obvious choice, the possibility that operating a hotel without a brand may be the better choice.

Why Choose an Existing Brand?

The major brands provide a number of benefits to hotel owners. A few of them are:

Name Recognition.

Perhaps the biggest benefit of branding a hotel is name recognition, and brands work to maximize that benefit. Hotel companies spend time and effort to make sure the traveling public recognizes the flag, and this makes it easier to choose the hotel when others might be available. Their use of traditional advertising, social media, spokespersons and other techniques are well-honed and effective. Most importantly, a hotel guest that has a positive experience at one property will assume – not always correctly – that the experience will be the same at other properties.

Brand Standards

Brand recognition is part of brand standards, and brand standards can be a benefit to owners as well. Even as they represent costs of compliance, they help create uniformity among different flags, and reinforce the traveling public’s interest in specific hotel flags.

Reservation Systems.

Hotel companies invest in reservation systems that make booking a hotel simple, and are designed to maximize a traveler’s likelihood of actually booking a room, not just visiting a site.

Loyalty Programs.

While loyalty programs can be a financial burden for hotel owners, they are a draw for hotel guests and increase occupancy. Travelers are enticed by earning awards for travel, and even if the hotel does not recoup the advertised or actual daily rate, other expenditures – food and beverage, onsite services and the like – can provide additional financial benefits.

Support

When things go wrong, hotel brands can be a source of support. They can provide trouble-shooting expertise, and for brand manages, can provide a deep bench of experienced hotel workers. CONTINUE READING →

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18 February 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on ADA Compliance and Defense.

A recent spate of lawsuits from plaintiffs represented by Pacific Trial Attorneys has highlighted the need for businesses to ensure ADA compliance. In the below article, JMBM partner Stuart Tubis discusses the importance of website compliance, and how best to defend your business if there is liability.

Has Your Business Been Sued by Pacific Trial Attorneys or These Plaintiffs?
How to Defend These Unruh Civil Rights Act Lawsuits

by

Stuart Tubis, JMBM’s ADA Compliance & Defense Group

Pacific Trial Attorneys, as legal counsel, have filed hundreds of lawsuits for alleged violations of the California Unruh Civil Rights Act, California Civil Code § 51 et seq. and/or the Americans with Disabilities Act (ADA).

Based in Newport Beach, CA, Pacific Trial Attorneys is a law firm representing plaintiffs in a large number of accessibility lawsuits against businesses, often focused on website issues.

Generally, these lawsuits are filed by serial plaintiffs through their attorneys. Serial plaintiffs file numerous (sometimes hundreds) of lawsuits, often similar in nature. Pacific Trial Attorneys has historically filed such litigation on behalf of one of these plaintiffs:

  • Cheryl Thurston
  • Brittany Mejico
  • Dominick Martin
  • Rusty Rendon
  • Luis Licea
  • Isabel Rendon
  • Drew Hunthausen
  • Walter Mitchell
  • Anita Ogletree

These lawsuit show no signs of stopping. Each lawsuit includes a summons as a cover page informing you that you have been sued and requiring a response. Next is the complaint itself, which generally looks something like this: CONTINUE READING →

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26 January 2024

See how JMBM’s Global Hospitality Group® can help you.

Global Hospitality Group® Chairman Jim Butler to receive [CLIC] Lifetime Achievement Award

LOS ANGELES—Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that Jim Butler, a founding partner of JMBM and chairman of the Firm’s Global Hospitality Group®, will receive the Lifetime Achievement Award at the 2024 California Lodging Investment Conference [CLIC].

“Jim was the obvious and unanimous choice to receive the third [CLIC] Lifetime Achievement Award,” said Craig Sullivan, founder/president, [CLIC] in a press release. “Not only did he co-found one of the leading hospitality law firms that has become synonymous with the industry, but he also has worked on thousands of acquisitions, sales, developments, brandings, repositionings and financings throughout his career. He has graciously taken the time to mentor new hospitality professionals, helping to make the industry a better place. For this and so many more reasons, he is the perfect recipient.”

Jim is one of the top hotel lawyers in the world, and he devotes 100% of his practice to hospitality, providing unmatched hotel business experience and practical legal advice.

Jim and his team represent lenders, owners, developers, independent management companies and capital providers on their hotel projects worldwide. The Group brings more than 30 years’ of hotel experience with more than 4,700 hospitality properties located around the globe valued at more than $125 billion. They have worked on more than 2,700 hotel management and franchise agreements and more than 100 hotel mixed-use developments.

“I am honored to accept CLIC’s Lifetime Achievement Award,” said Butler. “I would like to extend my gratitude to the thousands of clients who have trusted the Global Hospitality Group to help them accomplish their goals.” CONTINUE READING →

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17 January 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Hospitality Dispute Resolution.

Critical considerations for hospitality litigation, arbitration &
alternate dispute resolution clauses in hotel contracts

Hotel Management Agreements & Franchise Agreements

by

Mark S. Adams, Hotel Dispute Lawyer
Partner & Senior Member
JMBM’s Global Hospitality Group®

Mark S. Adams is an experienced trial lawyer, partner, and senior member of JMBM’s Global Hospitality Group®. In his more than 14 years with the Firm, Mark has created an international reputation as a Hotel Dispute Lawyer, handling litigation, arbitration, jury trials, and alternate dispute resolution in hundreds of matters affecting hotels, resorts, restaurants, and other hospitality properties. But not every matter should, or does, end up in litigation. Mark also provides pre-litigation strategic advice to avoid litigation and optimize a client’s position for settlement where possible.

What is the difference between “Litigation” and “Dispute Resolution”?

In many circles, the term “litigation” refers to the process that starts with the filing of a lawsuit in the traditional court system and includes all that follows until a final resolution. This more restrictive definition does not include arbitration or other alternative dispute mechanisms.

In other circles, however, “litigation” has a much broader meaning which includes the first definition of court litigation. This second meaning includes all methods of dispute resolution and refers to the entire progression of a dispute from reviewing and advising on pre-contract drafting, through the first disagreement, preparing correspondence, and on to negotiations to amicably resolve issues. It also encompasses all related matters in the dispute from notice of default, strategic positioning for a lawsuit or other action, and engaging in dispute resolution by any procedure such as filing and then prosecuting or defending a lawsuit, arbitration, mediation, or judicial reference (see below).

We generally use “litigation” in the second, broadest meaning of all stages of any dispute and any type of dispute resolution process. In this article, we will specifically name a particular means of dispute resolution where it may provide greater clarity.

Dispute arbitration compared to court trials and judicial reference

Binding arbitration is the dispute resolution mechanism embodied in most hospitality contracts, particularly hotel management or operating agreements and hotel franchise agreements. The choice of binding arbitration may have profound effects on the process and outcome of the dispute. As a result, many parties opt out of arbitration, or attempt to opt out of it. The Pros and Cons of arbitration vs. court trials are summarized below:

Arbitration:

Pros:  Almost always a faster resolution, typically private and confidential proceedings, parties can choose arbitrators, avoids jury trials of complex business issues and the potential for runaway verdicts. Arbitration is favored by strong public policy behind the Federal Arbitration Act and most state arbitration statutes.

Cons:  Extremely limited appeal options, if any, less formal discovery, potential for biased arbitrators (e.g., frequent flyer customers), binding decisions, now offers little savings in cost – can be outrageously expensive. Without mutual agreement, a dispute can only be forced into arbitration when the parties have signed a binding arbitration agreement before the dispute arises, or, the parties sign such an agreement for the particular dispute after it arises.

Court Trials:

 Pros: Adherence to legal procedures, comprehensive discovery, public record, right to appeal.

 Cons: Lengthy process, high discovery costs, less control over timing, potential for complex rules and delays, jury trial waivers may not be enforceable in many jurisdictions (such as California) except when arbitration or judicial reference is provided.

Judicial Reference (or “Reference”) – A better alternative dispute resolution process with the best of both arbitration and court litigation?

Although it is less well known than arbitration or traditional court litigation, in states like California, there is another process that offers the best of both worlds. Many of our most experienced litigation attorneys believe that judicial reference deserves thoughtful consideration for hospitality contractual provisions for the dispute resolution process. CONTINUE READING →

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16 January 2024

See how JMBM’s Global Hospitality Group® can help you.

MTM-Email-Banner-1024x512

Early Bird registration is now available for Meet the Money® 2024. Click here to register with a $200 discount off the regular rate of $1,495.

Meet the Money® 2024 will be May 6-8, 2024 at the Marriott Los Angeles Airport hotel.

More information is available on www.MeetTheMoney.com.

Register now to secure your spot for the hospitality industry conference focused on 2024 hotel finance, investment, and deal-making.

About Meet the Money®

For 30 years, Meet the Money® has created an energetic environment to forge relationships, negotiate deals, and gain an in-depth understanding of hotel investment and finance. Our national hotel conference attracts heavy hitters and offers an opportunity for productive, one-on-one networking with them.

Meet the Money FAQ

Not sure if Meet the Money is for you? Below are some frequently asked questions, and their answers.

Who attends Meet the Money?

Our attendees are hotel owners, developers, investors, lenders, operators, advisors, consultants, brands, lenders and other capital providers.

What makes our conference different?

Meet the Money is a hospitality industry conference focused on bringing industry leaders together to make deals and connections. It’s a productive, exciting environment for one-on-one networking between speakers, sponsors and attendees.

How much is registration?

Early Bird registration for Meet the Money 2024 is $1,295 per attendee, through February 29, 2024. Standard registration is $1,495, beginning March 1.

What does registration include?

Registration includes:

  • All general sessions, special presentations and networking events during the three-day conference, including our Monday afternoon Investment Boot Camp
  • All conference materials, including attendee list
  • Tuesday night’s Welcome Reception
  • Meals during the program on Tuesday and Wednesday

Who do I contact if I have questions, or if I’m interested in speaking or sponsoring?

Please reach out to Doreen Filice Gabel, DFilice@jmbm.com.

Picture of Jim ButlerThis is Jim Butler, author of www.HotelLawBlog.com and founding partner of JMBM and JMBM’s Global Hospitality Group®. We provide business and legal advice to hotel owners, developers, independent operators and investors. This advice covers critical hotel issues such as hotel purchase, sale, development, financing, franchise, management, ADA, and IP matters. We also have compelling experience in hotel litigation, union avoidance and union negotiations, and cybersecurity & data privacy.

JMBM’s Global Hospitality Group® has been involved in more than $125 billion of hotel transactions and more than 4,700 hotel properties located around the globe. Contact me at +1-310-201-3526 or jbutler@jmbm.com to discuss how we can help.

How can we help? Brochure Credentials Photo Gallery

 

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8 January 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Hospitality Dispute Resolution.

Hotel Dispute Lawyer: Choice of law to govern hospitality contracts — New York, Florida, Texas, California and Maryland law

Hospitality Litigation, Arbitration & Dispute Resolution

by

Mark S. Adams, Hotel Dispute Lawyer
Partner & Senior Member
JMBM’s Global Hospitality Group®

Mark S. Adams is an experienced trial lawyer, partner, and senior member of JMBM’s Global Hospitality Group®. In his more than 14 years with the Firm, Mark has created an international reputation as a Hotel Dispute Lawyer, handling litigation, arbitration and alternate dispute resolution in hundreds of matters affecting hotels, resorts, restaurants and other hospitality properties.

Why New York law is the governing law in so many hospitality agreements

There are many reasons why parties select the laws of a specific state to govern the interpretation and enforcement of contracts in the hospitality industry. Often, they select the laws of the state where the relevant hospitality property is located, or the laws where one or both of the parties reside. However, irrespective of those considerations, New York law is often chosen as the governing law for significant financial transactions and arrangements.

There are a number of factors that make New York law one of the most popular choices for governing law. These include the following:

  1. New York is a global financial and commercial hub, which logistically makes it a preferred jurisdiction for resolving disputes through negotiations, arbitration or litigation.
  2. New York has a well-established, highly respected legal structure that provides a level of predictability and stability crucial for dealing with complex contractual relationships within the hospitality industry.
  3. New York courts have established a robust and sophisticated body of case law. This provides clarity for parties entering into hotel contracts, offering guidance on various issues, including contractual interpretation, performance obligations, and potential liability. This well-defined legal landscape reduces uncertainty and potential disputes, fostering a more secure environment for hotel owners, management companies, and franchisees.
  4. The prominence of New York law in hotel contracts is linked to the state’s role as a key center for international business transactions. Many hotel management and franchise agreements involve parties from different jurisdictions, and the familiarity and enforceability of New York law on a global scale make it a practical choice. This preference for New York law enhances the efficiency of negotiations and facilitates cooperation in the performance of the contractual obligations.

American and International jurisprudence is based largely on legal precedents, which are real life cases with well-reasoned opinions as to the outcomes.  In light of my observations given above, New York has had both a longer tenure to establish legal precedents, generally, and particularly a greater volume of decided hotel cases. These legal precedents provide indispensable guidance on the potential or likely outcomes in pending disputes, i.e. greater predictability and certainty of outcome. CONTINUE READING →

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6 January 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Hospitality Dispute Resolution.

Meet Mark S. Adams, Hotel Dispute Lawyer –
Hospitality Litigation, Arbitration & Dispute Resolution

Mark S. Adams is an experienced trial lawyer, partner, and senior member of JMBM’s Global Hospitality Group®. In his more than 14 years with the Firm, Mark has created an international reputation as a Hotel Dispute Lawyer, handling litigation, arbitration, and alternate dispute resolution in hundreds of matters affecting hotels, resorts, restaurants, and other hospitality properties.

We caught up with Mark for some candid insights about him and his practice.

Q: Mark, you have had an amazing litigation career. What is the secret of your success?

A: I rarely lose, and that’s because I have a fantastic support team, unrivaled in talent. We also believe in and practice the Global Hospitality Group® mantra of “aggressive and passionate advocacy.”

Q: That is a good summary, particularly with your track record. But what is the philosophy or approach that leads to such success?

A: I customize my strategy and approach with each client in each situation. First, I need to understand my client, their goals, and other concerns. Then we initiate an iterative process where the client and I explore all relevant facts affecting the matter, what laws and contracts may govern, the aggressiveness of the parties, and various options for proceeding.  Numerous factors affect our choices, including timing for resolution, funding available to the paying party to accomplish a resolution and creative non-monetary solutions. There is no successful cookie-cutter approach.

Q: Controlling litigation costs is important for clients. If a client cannot avoid litigation, what do you do to work with the client to control the costs of pursuing or defending a claim?

A: The cost of litigation is important to all our clients, whether it is a relatively minor matter or a “bet the company” case. The cost-benefit analysis may vary depending upon the circumstances.

Here is how I advise clients to control litigation costs: CONTINUE READING →

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22 December 2023

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Resort Fee Litigation.

Hotel Dispute Lawyer: How Pennsylvania Resort Fees Settlements Could Play Out for US Hotel Industry

Hospitality Litigation, Arbitration & Dispute Resolution

On December 12, 2023, Mark S. Adams, Hotel Dispute Lawyer, was a guest on the Hotel News Now podcast where he discussed the effects of mandatory fee disclosure litigation in Pennsylvania on the hotel industry.

Consumer advocacy groups, law firms and federal and state governments have begun to push back on hidden resort fees, which are often not disclosed until customers near the end of the booking process. Resort fees are charged in addition to hotel room rates and can include things like amenity fees and destination charges.

In Pennsylvania, the state’s attorney general reached settlement agreements with Omni Hotels & Resorts, Choice Hotels International and Marriott International over their fee disclosure practices. According to Adams, the main objective in these cases was to ensure full transparency. If a hotel has a mandatory fee, they will have to let customers know upfront.

“I see the impact as being multifaceted,” explained Adams. “One, it’s good for the consumers because you know what you’re buying. Two, I think it’s actually good for the industry.”

He went on to explain that because some of the biggest hotel brands have become compliant with full disclosure, the smaller brands will get on board. CONTINUE READING →

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19 December 2023

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Resort Fee Litigation.

On July 1, 2024, a comprehensive ban on pricing goods and services without including all mandatory fees will go into effect in California. This ban is the result of a bill recently signed into law by Governor Gavin Newsom, and similar proposed legislation has gained bi-partisan support from state governments and federal authorities. In the below article, JMBM partner Mark Adams discusses the implications of these legal developments for hotel owners. He emphasizes the need for full transparency to avoid financial penalties, litigation, and reputational damage.

The Final Check-Out: Bidding Farewell to Undisclosed Mandatory Resort Fees

by

Mark S. Adams, Hotel Dispute Lawyer
Partner & Senior Member
JMBM’s Global Hospitality Group®

Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.

In October this year, California Governor Gavin Newsom signed into law (effective July 1, 2024) a sweeping ban on pricing goods and services without including all mandatory fees or charges.

Presently pending in the U.S. Senate is a bipartisan-supported bill that would do the same.

These bills join state governments, federal authorities, state attorneys general, and consumer advocacy groups in intensified scrutiny of undisclosed mandatory resort fees included in hotel rates. Additionally, several state attorney generals and consumer groups are targeting hotels that charge undisclosed resort fees.

In response to this developing trend, it is imperative for hotel owners to quickly implement full transparency, revealing the total cost of mandatory resort fees upfront. Failure to do so may result in significant financial penalties, expensive litigation, and reputational damage among consumers, who often do not view these fees favorably.

What are Resort Fees?

Resort fees are extra charges imposed by hotels and resorts, ostensibly for providing certain amenities. This additional cost is typically calculated daily and added to the basic room rate. Resort fees are sometimes relabeled as a facility fee, destination fee, amenity fee, urban fee, or  resort charge. In the end, they are all the same thing; and even if a guest does not actually use the amenities associated with the resort fees, they are still required to pay for them.

Consumer Complaints About Hotel Resort Fees

Resort fees have become a significant point of contention for consumers worldwide. These mandatory charges, often added to hotel bills after booking, have been criticized for their lack of transparency and fairness. Many consumers claim to be blindsided by these additional charges, only realizing they are being charged a resort fee when they check out. This lack of upfront disclosure makes it difficult for consumers to accurately compare room costs and budget for their stay. CONTINUE READING →

Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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