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Nobody Asked Me, But… No. 48
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New President of Wyndham Ignores the Real Issues; Restoration
of the Historic U.S. Grant Hotel; Hotel Franchises Compared to
Auto Dealer Franchises: Quote of the Month
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By Stanley Turkel, MHS, ISHC
January  2008
 

1.  New President of Wyndham Ignores the Real Issues-   
In a recent letter to Owners and General Managers, Eric Danziger, the new Wyndham President and CEO, wrote,
 

December 23, 2008

It is with great pride that I write to you today to introduce myself to Wyndham Hotel Group’s family of brands.  And, to our many wonderful owners and franchisees! I feel honored to join this great group of brands and people, and look forward to pushing forward toward great success!  Everyone, in one way or another, has been touched by the dramatic change in our nation’s economic situation.  Now is the time to talk about how we navigate the choppy economic waters….

What an opportunity and challenge it is to come in as the new president and CEO during these tough times.  I define great success as the individual properties and owners performing well at the property level.  I regard our mutual relationship as successful when our common goals are realized.  Success means having a relationship with you that is everlasting.  And of course, success implies system-wide growth!  Although somewhat aspirational, in nature, I promise to work hard in leading WHG in a way which attempts to yield all of those goals, for they are the guiding principles of what makes a company great!....  Different brands demand different solutions and a “one-size fits all” approach is not the solution for us.  We are customizing our tactics and methodologies and your dedicated brand leaders will keep you informed on new initiatives we are implementing to ride out this economic storm.  You have already heard directly from your brands on the conferences and exceptional guest service at each and every property.  You will continue to receive information from us as we develop new ideas together.  I look forward to working with you and sincerely thank you for your business.

May the holiday season bring great happiness to you and your families- your families at home and your extended employee families.

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However, nowhere in his remarks does Mr. Danziger make any reference to the subjects that are of the greatest importance to Wyndham franchises such as: guaranteed areas of protection, termination and liquidated damages, encroachment and impact studies, windows of penalty-free exit opportunities, choice of venue, etc.

Since the Wyndham Hotel Group franchises 6,544 hotels (more than any other hotel franchise company), wouldn’t you think that a major part of his responsibilities should be to satisfy his customers with a fair franchising environment?

Incidentally, my recent rating of Wyndham’s compliance with AAHOAs 12 Points gave Wyndham a failing score:
 
% Compliance
Vista 93.0
Budgetel 93.0
Vantage 93.0
Accor 57.6
Wyndham 50.3
La Quinta 47.3
Choice 40.9
Carlson 34.3
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At 50.3%, Wyndham is failing its franchisees badly.  How is it that Mr. Danziger can regard the mutual relationship successful when “our common goals are realized” if he gives no recognition to the most important franchisee goals?

2.  Restoration of the Historic U.S. Grant Hotel -  Some years ago I consulted for the Sybedon Corporation and served as asset manager when they acquired and restored these historic hotels:

  • Jefferson Hotel, Richmond, Virginia
  • Jung Hotel, New Orleans, Louisiana
  • Montauk Manor, Montauk, Long Island
  • U.S. Grant Hotel, San Diego, California
Each of these hotels has a fascinating history, especially to U.S. Grant which recently underwent a spectacular $56 million renovation.  Owned by the Sycuan Band of the Kumeyaay Nation.  This is a Native American tribe that owns and operates a successful casino in the vicinity.  The U.S. Grant is a jewel in Starwood’s Luxury Collection and recently was awarded “Best Luxury Guestroom Design” at the HotelWorld Global Hospitality & Design Awards competition.

Sycuan’s purchase of the hotel represents an ancestral tribute to its local legacy.  It was President Ulysses S. Grant who passed an Executive Order in 1875 that set aside 640 acres of East County land for the Kumeyaay Tribes and granted them sovereignty.  The hotel was originally built in 1910 by Ulysses Grant who was the son of the 18th U.S. president.  

Under the direction of French interior designer Frederic Marq, the new owners commissioned nine noted Native American, European and American artists to create paintings, murals, sculptures and ironworks to decorate the U.S. Grant’s public spaces, guestrooms, suites and corridors.  The 11-story, 270 room hotel has 47 suites ranging from 400 to 1300 square feet.  Since its opening, 13 sitting U.S. presidents have been guests at the U.S. Grant.

3.  Hotel Franchises Compared to Auto Dealer Franchises-  The large hotel franchise companies do not grant “areas of protection” (AOP) to their franchisees.  At best, some of them utilize third-party impact studies to try to quantify the effect of the proposed new hotel on the existing franchisee.  The results of these impact studies are highly subjective.  How different from the franchise situation in the automobile business.

Early in the last century, General Motors and Ford adopted the franchise dealer system because they thought that it would expedite expansion and save money.  They believed that a dealer who owned his business would invest his own capital, work harder than an employee and would not require a lot of outside supervision.  But, as it turned out, the franchising of dealerships costs the car companies a lot in terms of flexibility and control.  For example, in every state these local franchises are protected by so-called “franchise laws” which restrict G.M.’s freedom to open a new Cadillac dealership a few miles away from an existing one.  Just like the hotel franchise companies, G.M. is in a different business than its dealers.  G.M. makes its money on new car sales and on the financing of loans.  Dealers make most of their profits on servicing cars and selling used ones.  So dealers can thrive even when auto manufacturers suffer. On the state level dealers often have more political clout than automakers do.  Historically, the automakers have not been good partners.  For example, in the 1930’s during Great Depression, G.M. and Ford kept their factories running and forced thousands of dealers to buy new cars that they had little chance of selling.  The dealers provided a cushion against hard times by eating the inventory.  There are now many cost-saving steps that G.M. can’t take (like discontinuing Buick or Pontiac) because they do not own the dealerships.  It is said that the automakers made a devils bargain some eighty years ago and now they’re stuck with it.

4.  Quote of the Month-  

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.”                  Niccolo Machiavelli

                                                                                                                                                  


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.  Don’t hesitate to call:  

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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. 47 / New CEO of Choice Misses an Opportunity; Lost and Forgotten Hotels; Little Known Hotel Facilities in New York / Stanley Turkel / December 2008
Nobody Asked Me, But No. 45/ Remembering John Curry; Hotel Owners Have The Power / Stanley Turkel / October 2008
Nobody Asked Me, But No. 44 / Hotel Franchise Companies Performance Appraisal Report, a Down-to-earth Assessment of the Hotel Capital Markets / Stanley Turkel / September 2008
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
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