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Nobody Asked Me, But… No. 37
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Remember the Savoy Plaza Hotel?; Is Economic Disaster Imminent; 
Cuba at the Crossroads
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By Stanley Turkel, MHS, ISHC
February 2008

1. Remember the Savoy Plaza Hotel?-    A recent newsstory in the N.Y. Times (February 14, 2008), reported that the owner of the General Motors Building has put the 50-story marble tower up for sale.  The sales book distributed to prospective buyers suggests that a new owner could generate new revenues by licensing the naming rights.

This story rang a bell in my hotelman’s memory.  Back in 1926, the owner of the Plaza Hotel, Harry S. Black bought the Savoy Hotel and other adjacent buildings to erect a new 29-story, 1000 room apartment hotel, the Savoy Plaza, designed by McKim, Mead & White.  This magnificent structure was demolished in 1964 to make way for the General Motors Building designed by Edward Durrell Stone.

The long-forgotten Savoy Plaza Hotel lined up with the Sherry-Netherland Hotel across 59th Street to the north to form a fine east boundary for the Grand Army Plaza.  The three hotels (Savoy Plaza, Sherry-Netherland and the Plaza), the Pulitzer Fountain, the beautiful “Abundance” statue by Karl Bitters and the Grand Army Plaza, designed by Carrere & Hastings, created one of the most beautiful urban settings in the world.

2.  Is Economic Disaster Imminent?  The reports from the recent Americas Lodging Investment Summit (ALIS) in Los Angeles said that the mood of the hotel real estate crowd was generally positive with a little caution thrown in.  The general opinion was that while the economy will slow down, it should recover fairly soon.  I am more pessimistic than most hoteliers.  The 700,000 new guestrooms reported by Lodging Econometrics to be in the hotel construction pipeline will flood the market just when occupancies are dropping substantially.

In addition, U.S. Department of Commerce data reveals that the United States continues to suffer from a decline in overseas arrivals despite a worldwide boom in international travel and an extraordinarily favorable exchange rate.

Finally, there is the recent report by Pricewaterhouse Coopers that there were 324 hotel brands in the U.S. as of December 2007 representing the largest number of new brand launches since 1989.  The combination of new guestrooms, sluggish overseas arrivals, high gasoline prices, an oncoming recession and new brand proliferation is a deadly mix for the hotel business in 2008.  Protect yourself.

3.  Cuba at the Crossroads-   With the impending retirement of Fidel Castro, the United States has said that it has no intention of reversing its trade embargo.  The Bush administration has made it much harder for academics, artists and business people to travel to Cuba and much more difficult for Cubans to travel to the U.S.  The embargo appears vindictive and petty in comparison to our extensive trade with communist China.  Since no similar trade embargo was imposed, American hotel companies are developing thousands of hotels all over China.  It appears that commerce is more likely than isolation to produce positive changes. 

Meanwhile, a hotel building boom by European, Canadian and Mexican companies has produced 70,000 new hotel rooms in Cuba which drew 2.1 million visitors last year.  As the New York Times wrote (Editorial 2/20/08):

For millions of Cubans, the wait for Mr. Castro to go has been interminable.  Now that he is finally stepping down, Washington needs to do all it can to help encourage a peaceful transition to democracy.  It needs to shake off its own ghosts and start talking directly with Cuban politicians and the Cuban people.

It appears that long-term interests of the United States would be best served by ending the embargo.

4.  My Speaking Schedule
• March 5:  “Great American Hoteliers” Part 2 at the Harvard Club of New York
• March 23:  “Hotel Franchising: A Format in Transition” at the AAHOA Convention in San Antonio, Texas.
• April 7: “Fair Franchising is Not an Oxymoron” at the CHOC Owners Summit in Dallas, Texas
• April 16: “Great American Hoteliers” at the New York University Osher Institute

5.  Quote of the Month

“A lie gets halfway around the world before the truth has a chance to get its pants on”.
                                                                                           Sir Winston Churchill

Stanley Turkel, MHS, ISHC operates his hotel consulting office as a sole practitioner specializing in franchising issues, asset management and litigation support services.  If you need help with a hotel franchising problem such as encroachment/impact, termination/liquidated damages or litigation support, call Stanley at 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: Nobody Asked Me, But No. 36 / What the Advertisements for the Largest Hotel Franchise Companies Never Mention - Also Measuring Hotel Brand Value / Stanley Turkel / January 2008
Nobody Asked Me, But No. 35 / Casino Expansion Has Transformed America, Exercise Awareness / Stanley Turkel / December 2007
Nobody Asked Me, But… No. 34 / IHG’s Great Idea, Sound-Proofing Hotels, Best Western Enters the Upper Midscale Segment, How to Convert Confusion Into Order,  Sign at a Tarrytown, NY Inn, 1798 / November 2007
Nobody Asked Me, But… No. 33 / 1957 Murder at the Park Sheraton Hotel; How Much Does A Franchise Really Cost?A Marriage Made in Heaven?; A Good Night’s Sleep at the Benjamin Hotel / Stanley Turkel / October 2007
Nobody Asked Me, But… No. 31 - Rhode Island Improves Franchise Rules, What’s Up With Canada? Conversion of a Jail Into a Hotel, The Richest (and Poorest) Places in the U.S. / Stanley Turkel / September 2007
Nobody Asked Me, But… No. 31 - Blackstone's Acquisition of Hilton, The Art of Groveling, The Origin of Franchising / Stanley Turkel / August 2007
Nobody Asked Me, But…. No. 30 / Impertinent Questions In Search of Pertinent Answers: Carbon monoxide detectors, exterior-corridor properties / Stanley Turkel / July 2007
How American-Owned Can You Get?, ISHC's CapEx 2007 Report, The Bowery Hotel / Stanley Turkel / June 2007
Hotel Franchising and State Laws, Is Immigration Important? Save the Biltmore, The Good Old Days, Quote of the Month / Stanley Turkel / May 2007
Nobody Asked Me, But - No. 27 / Hotel Franchise Agreements: Mediation, Arbitration or Litigation? / Stanley Turkel / April 2007
Nobody Asked Me, But - No. 26 / Energy Usage and Potential Savings; Great Art in Hotels; Lifestyle Hotels; The Minimum Wage Issue; Quote of the Month / Stanley Turkel / March 2007
Nobody Asked Me, But - No. 25 / Guestroom Design & Amenities, Get a Human, Best Luxury Hotels in the U.S., Turnpike, The Pineapple as Symbol of Hospitality, Fair Franchising / Stanley Turkel / February 2007
Nobody Asked Me, But - No. 24 / Loose Cannon, Fair Franchising, Manhattan Hotel Profits, Hotels of the Future, Interesting Miscellany, Quote of the Month / Stanley Turkel / January 2007
Nobody Asked Me, But - No. 23 / Biting The Hand That Feeds You?, By The Numbers, Shortage of Hotel Rooms, There is No Free Lunch, Iron Laws of Business Travel, Happy New Year / Stanley Turkel / January 2007
Nobody Asked Me, But - No. 22 / Smart Elevators, Tony Marshall’s Memorial, Women in the Hospitality Industry / Stanley Turkel / December 2006
Nobody Asked Me, But… No. 21 / The Drake Hotel in New York, Fair Franchising is Not an Oxymoron, By the Numbers, Another Secret Underground Shelter, Passing of Anthony G. Marshall / Stanley Turkel / December 2006
Nobody Asked Me, But… No. 20 / Turnabout Is Fairplay, Secret Underground Shelter, By the Numbers, Genuine Fair Franchising/ Stanley Turkel / November 2006
Nobody Asked Me, But… No. 19 / International Society of Hospitality Consultants, Great Miami Hotels, Reduce Carbon Monoxide Emissions, Turn Gray Into Gold / Stanley Turkel / November 2006
Nobody Asked Me, But… No. 18 / John Q. Hammons, Save the Belleview Biltmore, Chinese Tourism, CFLs, Ernie Byfield, Guestroom Entertainment in 1905 / Stanley Turkel / October 2006
Nobody Asked Me, But… No. 17 - AAHOA's 12 Points of Fair Franchising, Protected Territories, / Stanley Turkel / September 2006
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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