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 Nobody Asked Me, But… No. 17 - AAHOA’s 12 Points of Fair Franchising, 
Protected Territories, U.S. in 1900, Wawa, Broadway Plaza Hotel Site, 
Travelpods and Pullman Sleepers
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By Stanley Turkel, MHS, ISHC
September 2006

1.  Eight years after issuing its “12 Points of Fair Franchising,” the Asian American Hotel Owners Association (AAHOA) has produced an updated version.  Chariman Mukesh Mowji said, “Since 1998, the hotel franchise system has expanded and changed but so have problems with franchisors and franchisees.  With these system changes, it is time to update AAHOA’s 12 Points.  It is time to provide the hotel industry with a current set of standards by which to judge their actions.  It is time to build on our past points and let everyone know in no uncertain terms what AAHOA believes is fair franchising and what is not.” (www.aahoa.com)

Here are two impertinent questions in search of pertinent answers:

  1.  By name, which franchise companies meet the new 12 Points and which do not?
  2.  What will AAHOA do about those franchise companies who do not comply with the 12 Points?
2.  The newest agreements on protected territories in the U.S. franchise industry aren’t being done on a mileage basis around the store.  Instead the latest concept uses demographic data on households to decide how large of an area to give franchisees.  Using more sophisticated spacing policies for protected territories is a growing trend among franchisors.  Today’s mapping software can draw territories based on population density, household income and all kinds of demographic data.  A few mature franchisors are using these same tools in a sophisticated impact policy that compensates existing franchisees in the event of an adverse effect from a same-brand new franchise.

McDonald’s for example, negotiates financial relief for franchisees when research shows a new McDonald’s has impacted their store.  Additionally, Microtel Inn and Suites, which negotiates protected territories, offers to reduce royalty payments by a point or more if a new development is found to hurt an existing franchisee’s location.

Microtel also has pioneered with a collapsing protected territory which gives franchisees a larger territory at the start of the license agreement.

3.  What a difference a century makes!  In the summer of 1900…

  • The average life expectancy was 47
  • Only 14% of the homes in the United States had a bathtub
  • Only 8% had telephones
  • There was no Mother’s Day or Father’s Day
  • Only 6% of all Americans had graduated from high school
  • Marijuana, heroin and morphine were all available over the counter at corner drugstores.  According to one pharmacist, “heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and the bowels and is in fact, a perfect guardian of health.
4.  Ever hear of Wawa?  It’s a chain of convenience stores with 550 locations in five states on the East Coast.  The most intriguing factor in Wawa’s success is its unexpected good service.  Most convenience stores, where employee turnover is high and transactions are as basic as it gets, are the perfect setting for indifferent service.

Yet in an article for the Harvard Business Review, Ohio State University Professor Neeli Bendapudi found that employee friendliness was a recurring theme at Wawa.  The company’s CEO Howard Stoeckel says that while convenience stores seems like places for no-frills, almost- anonymous consumption, Wawa focuses on the repeat- customer side of the business or, as he puts it, the “habit- forming” side.  Store managers are expected to make each Wawa part of the community and impress regulars who will visit five times a week or more.  While Wawa’s wages are comparable to other convenience stores, it does a better job in investing in its employees with training at its Wawa Corporate University and reimbursement for college courses.  This keeps turnover low and attracts hundreds of applicants for every job opening.  Which hotel company treats its employees and its guests as well?  A new study by D.K. Shifflet & Associates reports that hotel guests are less interested in flat panel TV’s, bathroom amenities and free high-speed Internet access than they are in good service and a smoke-free environment.

All the major on-line agencies- Expedia, Travelocity and Orbitz- have recently introduced customer- service initiatives.  Travelocity’s new program has improved its technology and, more important, has empowered its agents to solve problems.  But it also offers a human touch, with more than 1,000 customer service representatives available by phone and e-mail 24 hours a day. 

Now if only these programs would work as well as Wawa’s.

5.  The first theater in the United States in which moving pictures were projected on a screen before a mass audience was Koster & Bial’s Music Hall on West 34th Street in New York City (where Macy’s sits).  On April 23, 1896, the theater was host for the public introduction of the Vitascope movie projector, a project of Thomas Edison’s.  During the premiere, according to the Library of Congress, film was projected onto a 20-foot screen enclosed by a gilded frame, to enhance the “picture” concept.  The Lumière brothers, using a different machine, had held a screening of their short films in Paris on December 28, 1895, before 33 people.

But there was an even earlier movie theater.  A previous Edison project, a primordial peep show called the Kinetoscope, was first commercially exhibited on April 14, 1894, in a storefront at 1155 Broadway, on the southwest corner of 27th Street.  A loop of translucent film moved in front of a light inside a box.  The theater opened with 10 of the machines.  The Broadway Plaza Hotel is now at that address.

6.  A recent announcement by the Travelodge Company caught my attention and triggered my memory.  Travelodge’s new “Travelpod” is a mobile hotel room that is fitted with all the features of the company’s traditional hotel rooms.

The mobile room, sealed in a 19.6 x 8.5 foot clear polycarbonate glass box, will be transported to each location by truck and offloaded with a crane.  Inside, the room has a luxury double bed, bedside tables, lights, duvet, pillows, fully carpeted floor, dressing table with light, mirror chair and even its own toilet.

Wayne Munnelly, Travelodge’s director of sleep, said that the Travelpod was a great way of taking the Travelodge room to the customer.

This news story reminded me of George Mortimer Pullman, the famous builder of the Pullman Cars (hotel rooms on wheels).  During the 1880’s Pullman entered a related business:  providing side-tracked sleeping cars in lieu of hotels to political delegates and convention attendees.  For example, Pullman supplied 125 cars for the Grand Army of the Republic’s reunion in San Francisco plus 53 cars for the GAR’s event in San Francisco.  In addition, Pullman provided 55 cars to Boston for the Grand Sovereign Lodge of Odd Fellows and 200 cars for the Knights Templars in St. Louis.



Stanley Turkel, MHS, ISHC operates his hotel consulting office as a sole practitioner specializing in franchising issues, asset management and litigation support services.  Turkel’s clients are hotel owners and franchisees, investors and lending institutions. Turkel serves on the Board of Advisors and lectures at the NYU Tisch Center for Hospitality, Tourism and Sports Management.  He is a member of the prestigious International Society of Hospitality Consultants. His provocative articles on various hotel subjects have been published in the Cornell Quarterly, Lodging Hospitality, Hotel Interactive, Hotel Online, AAHOA Lodging Business, Bottomline, New York Times, Wall Street Journal, etc. If you need help with a hotel operations or franchising problem such as encroachment/impact, termination/liquidated damages or litigation support, don’t hesitate to call 917-628-8549 or email stanturkel@aol.com
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Contact:

Stanley Turkel, MHS, ISHC
917-628-8549
stanturkel@aol.com

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Also See: The Newest Independent (and Oldest Partially Independent) Franchise Association in the Hotel Industry / Stanley Turkel / September 2006
In Hotel Franchising, Reality Trumps Wishful Thinking / Stanley Turkel / August 2006
Nobody Asked Me, But… No. 14; Impact Studies, Stretching Segments, Short-Stay Rentals, Smoke-free Marriotts, Franchising in China, Save the Belleview Biltmore Hotel / August 2006
The U.S. Population Age 65 and Over is Expected to Double in the Next 25 Years; What Does this Mean for the Hotel Industry? / Stanley Turkel / July 2006
Nobody Asked Me, But… No. 12; Portman, Women Homeowners, Minimum Wage, Tipping, Brooklyn Bridge, Chinese Tourism, Impact Studies / Stanley Turkel / July 2006
Do Hotel Franchisees Need Independent Franchise Associations? / Stanley Turkel / June 2006
Nobody Asked Me, But… No. 10 / Chinese Tourists, Gasoline Prices and Alternatives, GLBT Segment, Travel Agents, FAC's, Manhattan's Record Breaking Year, Impertinent Questions / Stanley Turkel / June 2006
Nobody Asked Me, But… No. 9 / Blang, Bathtubs, Best Green, Arbitration, Best Western, AAHOA, State Franchising Laws, VFR / Stanley Turkel / May 2006
Nobody Asked Me, But… No. 8; Bathtubs, Smokefree Hotels, Maps, Saving Water, Nevada Revenues, H.P. Rama, Ritz-Carlton, Statler Service Code, Mother’s Day / Stanley Turkel / April 2006
Nobody Asked Me, But….No. 7 / Stanley Turkel, MHS, ISHC / March 2006
Nobody Asked Me, But…. / Stanley Turkel / February 2006
Nobody Asked Me, But…. / Stanley Turkel / January 2006
Nobody Asked Me, But…. / Stanley Turkel / December 2005
Nobody Asked Me, But…. / Stanley Turkel / November 2005
Nobody Asked Me, But…. / Stanley Turkel / October 2005
Nobody Asked Me, But…. / Stanley Turkel / September 2005
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