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Nobody Asked Me, But… No. 36
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What Advertisements for the Largest Hotel Franchise Companies
Never Mention; Measuring Hotel Brand Value
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By Stanley Turkel, MHS, ISHC
January 2008

1.  Impertinent Question in Search of a Pertinent Answer:

Why is it that the advertisements for the largest hotel franchise companies never mention:

  • areas of protection and encroachment
  • termination and liquidated damages
  • arbitration vs. litigation
  • transferability of the license agreement
  • reservation productivity
  • venues for law suits
2.  How Do You Measure Hotel Brand Value?  In a world gone brand mad, creating yet one more hotel brand is a relatively simple process.  But there is a wide gap between creation and value.  The only measurable benefit to brand value is the number of reservations produced at a satisfactory average daily rate.  Everything else is peripheral, cosmetic and unimportant.  If a new hotel franchise is clearly positioned, forcefully marketed and provides a fair franchise agreement, then it can be beneficial to hotel owners.  If, however, it is undistinguishable from its competitive set, unknown to the traveling public and poorly promoted, it will not be successful.  As it stands right now, the eight major hotel companies market 60 different brand names.  No wonder consumers are confused and bewildered by the proliferation of new hotel brands.

3.  Alleged Franchise Kickback Scheme -  20 franchisees of Michigan based Tubby’s Sub Shop accused Tubby’s of creating a subsidiary, SDS, from which franchisees were required to buy their supplies.  In the January 2008 Franchise Times, the scheme was described as follows:

“Management convinced the vendors to charge 130 to 150 percent of their normal charges, according to the complaint.  Vendors passed on the extra funds to Tubby’s.”

The franchisees found out that Tubby’s also received 35% of the distribution fees from SDS even though the UFOC and the franchise agreement stipulated that they were entitled to only 2%.  Tubby’s was found liable for failing to disclose the distribution scam and settled the case.

4.  Isn’t Paying a Living Wage the American Way? -  Nationwide, 145 cities and counties have enacted living-wage bills which generally require businesses that receive government contracts to pay an amount above the state or federal minimum wages.  The highest living wage in the country is $14.75 per hour in Fairfax, Ca.

In May 2007, Maryland became the first state to approve a living wage bill which requires employers with state contracts to pay a minimum of $11.30 an hour.  Maryland’s state minimum wage is $6.15 an hour, one dollar above the federal minimum.

Meanwhile, a controversial living wage law was upheld by a California state appeals court which requires hotels at the Los Angeles International Airport to pay salary and benefits equal to $10.64 an hour.

5.  Here Are Some Surprising Statistics -  San Juan, capital city of the Commonwealth of Puerto Rico, has hotel occupancies and average rates much higher than the United States.  HVS International reports the following historical performance:  
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Occupancy %
. San Juan United States
2004 84% 60%
2005 79% 63%
2006 78% 64%
2007 (est) 77% 65%
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Average Rates
. San Juan United States
2004 $170 $87
2005 $172 $90
2006 $191 $98
2007 $203 $103
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6.  Tony Marshall Would Be Pleased -  The Anne Arundel, MD, County Council has upheld the requirements that lifeguards be posted at small pools in hotels.  Council members said they were inclined to maintain the requirement that all community pools must have lifeguards while exempting hotel pools less than 5 feet deep.  The county averages seven to eight drownings a year, including two or three suicides.

7.  Quote of the Month

If at first you don’t succeed, try again.  Then quit.  No use being a damn fool about it.”
                                                                                                          W.C. Fields


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

Stanley will be speaking on the program of the Choice Hotel Owners Council Summit in Dallas, TX April 6-8, 2008.

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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. 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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