Hotel Franchise Companies Performance Appraisal Report, and a
Down-to-earth Assessment of the Hotel Capital Markets
|By Stanley Turkel, MHS, ISHC
Nobody Asked Me, But… No. 44
No Passing Grades; Guess Who’s Coming to the United States; A Clear-Eyed
and Realistic Forecast; Quote of the Month
1. No Passing Grades
My recent ratings of the compliance level of five major hotel franchise companies with AAHOAs 12 Points turned up compliance rates ranging from 30% to 57.6%. Since 65% of all hotels in the United States are franchised (some 35,000 hotels) isn’t this big news?
Here’s the story: AAHOAs recent Performance Appraisal Report evaluated the compliance level for Accor, Carlson, Choice, La Quinta and Wyndham.
My ratings of the compliance levels revealed the following performance scores:
My common sense reaction: When will hotel owners realize that this situation could be quickly improved if hotel owners would sign franchise agreements only with those franchise companies who are in fuller compliance with AAHOAs 12 Points of Fair Franchising?
In a column entitled “Building & Maintaining Loyalty” in Hotels Magazine (August 2008), typical interviews with franchise company executives (Wyndham, Choice, Accor, Red Rood Inn) focus on trivial and unimportant process issues (communication and dialogue) instead of substantive issues.
Not one (except the Vantage Hospitality Group), talks about the major issues facing franchisees: guaranteed areas of protection, termination and liquidated damages, encroachment and impact studies, windows of penalty- free exit opportunities, choice of venue, etc.
In the same Hotels column, an editor’s note states: “Accor NA received high marks on a progress report recently released by the Asian American Hotel Owners Association on fair franchising.” How does a rating of 57.6% get high marks? In my school days this was a failing grade and my children and grandchildren report that it still is.
2. Guess Who’s Coming to the United States
In August 2008, Booking.com, the Amsterdam-based international online hotel reservation service (part of priceline.com), surveyed more than 10,000 U.S. hotel reservations made by international tourists. Based on the results, Booking.com reported that the following countries generated the most U.S. hotel bookings for Summer 2008:
Here’s a down-to-earth assessment of the hotel capital markets which says that the credit crisis is worse than most hotel people are willing to admit. It appeared as a letter from Joel Ross, Citadel Realty Advisors in Hotel Business magazine (8/21/08).
It strikes me that the thing most people in the hotel industry are not paying attention to what is really occurring in the capital markets and why that will severely affect their value and future NOI. Despite what a number of panelists appear to have said over the past year, the credit crisis is worse and not likely to get any better for at least 12 and maybe 18 months, or longer.4. Quote of the Month
“All that is required for evil to triumph is for good men to do nothing.”
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 hotels subjects have been published in the Cornell Quarterly, Lodging Hospitality, Hotel Interactive, Hotel Online, AAHOA Lodging Business, etc. If you need help in negotiating a franchise agreement or with a problem such as encroachment/impact, termination/liquidated damages or litigation support, call Stanley at 917-628-8549 or email [email protected].
Stanley Turkel, MHS, ISHC
|Also See:||Nobody Asked Me, But… No. 43 / Hotel Franchisor Companies Ignoring Critical Franchising Issues, Marriott Leads the Way with Aggressive Environmental Strategies / Stanley Turkel / August 2008|
|Nobody Asked Me, But No. 42 / Remembering Jack Craver; World Record-Setting Hotels; At Last: A Major Gaming Facility in the Catskills / Stanley Turkel / July 2008|
|Nobody Asked Me, But No. 41 / Landmark Belleview Biltmore Resort Saved; Hotel Developers Take Note - the Borough of Bronx in NYC Has 1.5 million Residents and Just One Hotel in the AAA Guide; Boutique Hotel Bandwagon / Stanley Turkel / June 2008|
|Nobody Asked Me, But No. 39 / Say Goodbye To The UFOC; Dunfey Brothers To Be Honored; The Plaza Hotel Reopens After a $400 Million Renovation / Stanley Turkel / April 2008|
|Nobody Asked Me, But No. 38 / Super 8 Owners Form an Independent Franchise Association; Why Is There a Bible in Every Hotel Room? / Stanley Turkel / March 2008|
|Nobody Asked Me, But No. 37 / Remember the Savoy Plaza Hotel?; Is Economic Disaster Imminent; Cuba at the Crossroads / Stanley Turkel / February 2008|
|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|