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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.

Published on:

31 January 2011

Hotel Lawyer on the state of the hotel industry. At the ALIS conference last week, Smith Travel gave a great overview on the final results for 2010 as well as its outlook for 2011 and 2012. The numbers are very interesting!

Jan Freitag made the presentation at the ALIS conference. According to him, at the end of 2010, there were 52,000 hotels in the United States providing a total room supply of 1.7 billion rooms (a 2% increase in supply over 2009).

Great increase in demand. The demand for room nights grew a staggering 7.8% returning to the pre-bubble peak of 1 billion room nights sold during 2010, but with an increased supply of hotel rooms taking a share of the demand, occupancy only increased 5.7% to 57.6%, below the magic 60% occupancy level. Smith Travel hailed the demand growth, but noted that it does not expect to see this outsized growth again in the foreseeable future. In fact, as noted below, demand growth for the next two years is projected to be below 2% per year.

Disappointing lack of any meaningful rate growth. Unfortunately, the dramatic demand growth was not accompanied by a comparable increase in the average daily rate or ADR. In 2010, ADR was flat (actually down -0.1%) at $98, and still below the important $100 level. RevPAR increased 5.5% to $56.50 and room revenues increased 7.6% to $99.5 billion.

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Published on:

27 January 2011

Hotel Lawyer with the pulse of the hotel industry from the ALIS conference in San Diego

After spending the past few days in San Diego at the Americas Lodging Industry Summit or ALIS conference, the hotel lawyers from JMBM’s Global Hospitality Group® have a pretty good sense of the “pulse” of the industry. Although attendance at the conference was down significantly from last year, as cost-cutting continues, the mood was decidedly more optimistic, and lots of people were actively working on deals or projects.

We thought the mood reflected a sense of “Great Expectations” – a relatively optimistic sense that the worst is clearly behind us, and that things will only get better from here, however slowly. Debt capital has reemerged for existing projects with established cash flows, and a decent project may get quite a few competitive bids. Property transactions are also happening across the spectrum. Foreign investment, particularly from China is fueling some of the acquisition activity. The REITs and equity buyers are also very active.

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Published on:

20 January 2011

Click here for the latest articles on ADA Compliance and Defense.

 

What do movie theaters and hotels have in common? For one thing, both movie theaters and hotels are considered “public accommodations” under the Americans with Disabilities Act (ADA) and both are required to provide disabled patrons equal access to facilities, including accessibility to movies, slideshows, and other audio and video presentations. In some instances, new technology can make it easier to achieve equal access… but it still can be a challenge.

A recent class action filed against Cinemark USA Inc. for discrimination against hearing impaired individuals due to lack of closed-captioning in theaters could have broad implications for hotels, particularly conference centers and hotels which cater to meetings and group business, in addition to hotels which cater to state organizations and governmental groups.

I was talking about this case the other day with my partner, ADA defense lawyer Marty Orlick. Marty is an expert in ADA defense and counseling, having defended owners and operators of properties in more than 450 cases. After a little collaboration, Marty put together a summary of the Cinemark case and its implications for the hotel industry. There is more to it than meets the eye.

What responsibilities do hotels have to deaf and hard of hearing guests? And what are the exceptions? How do hotels best protect themselves? How do hotels maximize business opportunities by providing auxiliary aides and services?

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Published on:

8 January 2011

Hotel Lawyer with advice for 2011: Hotel Investors, take note!

Like it or not, the stage is now set. This is the time. The year 2011 will present one of the greatest hotel buying opportunities for many years to come. And if you are not buying hotels this year, you will miss the window created by one of the biggest economic downturns in American history. What are the key indicators as to why this is a great time to by a hotel? And is price alone enough to justify the purchase, or are there other factors you need to think about? If the market is heading north, can you still make a bad purchase?

Hotel Lawyer Guy Maisnik, Vice Chairman of JMBM’s Global Hospitality Group®, who was the lead attorney for the Receiver in the recent sale of the Sheraton Universal Hotel, answers these questions and more.

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Published on:

5 January 2011

Jeffer Mangels Butler & Mitchell LLP (JMBM), one of California’s foremost full-service law firms, today announced that its Global Hospitality Group® facilitated the sale of the Sheraton Universal Hotel to Shenzhen New World Group Co. JMBM represented the receiver and structured the sale so that the 20-story, 451 room hotel could be conveyed while the hotel was in receivership.

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Published on:

3 January 2011

Click here for the latest articles on ADA Compliance and Defense.

Hotel ADA & Compliance Defense Lawyer update: We warned you about the Department of Justice (DOJ) conducting ADA “sweeps” in regions near you (Implications of the latest ADA enforcement “sweeps” against hotels in Portland and San Francisco, Is the DOJ’s ADA Compliance Survey Coming to Your City Soon? What to do when you receive the DOJ’s ADA Compliance Review questionnaire) but now we have information about the outcome of one such sweep.

Hilton Worldwide, Inc. and the DOJ came to an agreement on November 9, 2010 to make ADA changes to approximately 900 hotels internationally. Beyond the removal of architectural barriers, the changes include providing disabled guests the same room choices as other guests, guaranteeing accessible rooms will be available when they have been reserved, and making the central Internet reservation system more accessible. The agreement includes not only Hilton-owned properties, but properties where Hilton is the manager or franchisor. Click here to see the Hilton Consent Decree in US v Hilton Worldwide Inc.

Read on for a breakdown of what precedent-setting changes the Consent Decree contains and what accessibility issues you should consider before the DOJ visits your hotel.

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Published on:

Bloomberg news interview on investment outlook for 2011.

Is 2011 the “last window” for hotel investment in this cycle? Where are the biggest investment opportunities? What do you need to know about hotel investment now?

I thought you might like to hear my interview today on Bloomberg Law on Demand, hosted by Lee Pacchia. Click here to listen to the 10-minute podcast.

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Published on:

7 December 2010

It is always nice to be quoted in the New York Times, especially in a story that includes so many industry heavy hitters, as was the case in the article, After a Rough Night, Hotel Investors Are Waking Up. Reporter Janet Morrissey’s article provides a thought-provoking picture of the current unprecedented hotel investment landscape.

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Published on:

6 December 2010

Click here for the latest articles on ADA Compliance and Defense.

Hotel ADA Defense & Compliance Lawyer on CASp: In our ADA Defense & Compliance blog of September 20, 2009, we let California hotel owners know why they should take advantage of the “Certified Access Specialists program” (CASp), a piece of legislation designed to curb abusive ADA litigation. See: ADA Hotel Lawyers: California opens door to more ADA litigation, but also offers protection to the well-informed.

However, a judge in the United States District Court, Eastern District of California determined, in O’Campo v. Chico Mall, LLP , that a “public accommodation” (such as a hotel) with CASp certification is not entitled to all benefits that were intended by the California Legislature.

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Published on:

22 November 2010

Mixed-use can be a key to unlock value. But “standards” can be critical to protect the value of your hotel mixed-use asset

Some years ago, we coined the term “hotel-enhanced mixed-use” to describe those dynamic mixed-use properties where the hotel acts as the “spark plug” that energizes the entire project.
Hotels can be the “ultimate amenity” for mixed-use projects because they can distinguish the project, provide a great driver of traffic, and offer an integrating hub for residential and retail customers.

Since that time, we have seen hotels in successful mixed-use properties achieve RevPAR premiums of 30% to 40%. But these success stories are written about hotel developers and brands that understood — on the front end — that quality control had to be hard-wired into the regime. Hotel owners and hotel brands that failed to do that have not been so lucky.

In her article below, which was recently published by Hotel Business, hotel lawyer Catherine Holmes, a senior member of the JMBM Global Hospitality Group®, offers experienced advice on how you can “Protect your mixed-use asset by creating and maintaining standards.”

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