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Nobody Asked Me, But… No. 55
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Exterior-Corridor Hotel Properties; Blackstone Denies Hilton Breakup
Definition of a Lobbyist; Quote of the Month
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By Stanley Turkel, MHS, ISHC
August 21,  2009

1. Exterior-Corridor Hotel Properties

On June 17, 2009, Bobby Bowers, Senior VP Operations, Smith Travel Research wrote in the HotelNewsNow.com website:
The merits of interior versus exterior-corridor properties have been debated among economy chain hotel operators for some time.  Exterior corridor hotels offer convenience, value and a more home-like atmosphere, their proponents argue.  Interior-corridor operators stress their properties greater guest security, value and more up-to-date product offering.  Both product configurations have unique advantages.

Lest you think that this subject is not relevant, just consider these statistics.  There are an estimated 500,000 brand-affiliated exterior-corridor hotel rooms now operating in the U.S., mostly in the South and Southwest.

If you add independent properties, there are probably one million rooms or 30% of all domestic hotel rooms.  At a 50% occupancy and a $30 average daily rate, these hotels generate more than $5 billion in annual room revenues and pay $150 million in royalty fees (using a conservative 3% royalty fee).

Bowers reports that “recent economy chain hotel development has been basically all interior-corridor properties.  The five-year average annual supply growth for interior-corridor hotels was 1.3 percent, while exterior-corridor supply growth was flat. Exterior-corridor hotels dominated the early days of interstate and secondary market hotel development.  Today, a segment of hotel guests remains that prefers the convenience and feel of exterior-corridor properties.”

Still, there is a dearth of reliable data regarding many of the questions involved in this controversy:

 1.  How many exterior-corridor properties are in operation in the U.S.?
 2.  What do travelers think about exterior-corridor hotels?
 3.  Are these properties considered outdated and undesirable?
 4.  How many guests would rather park close to their rooms?
 5.  What percentage of guests would prefer to avoid hotel lobbies, elevators and interior corridors?
 6.  Do women guests believe that long and dark interior corridors are safer?
And so I ask my question again:  When will the hotel industry perform the long overdue primary research on consumer preferences for exterior-corridor hotel?  Franchisors and franchisees should sponsor such a research project under the aegis of one or more of the following:  American Hotel & Lodging Association, AAHOA, Smith Travel Research, HVS International, The Cornell Center for Hospitality Research and/or other hotel graduate schools.

2.  Blackstone Denies Hilton Breakup

Back in August 2007 in my “Nobody Asked Me, But… No. 31” column (Hotel-Online), I wrote:

If you want my considered opinion about the Blackstone acquisition of Hilton, just remember that private equity investors buy and sell companies usually with other people’s money… Some of these equity firms “rip, strip and flip.”  Look at the Hilton family brands one year from now to see which have been sold and discarded. 
A recent Sunday story in The Independent of London said that the Blackstone Group was considering breaking up Hilton, among other options, to realize value from the group ahead of debt repayment deadlines three and four years away.  Blackstone bought Hilton in July 2007.  The transaction was financed with $20.6 billion of debt and $5.7 billon of equity.

Reports said several options are being explored by Blackstone.  The private equity house is said to be looking at options to alter Hilton’s capital structure, such as a debt-for-equity swap, as well as a trade sale of some of its hotels to rivals.

Since the acquisition, Blackstone is believed to have written down the value of its holding by close to 50%. 

3.  Definition of a Lobbyist

The term “lobbyist” was coined in the 19th century in the Willard Hotel in Washington, D.C. (located on Pennsylvania Avenue between the White House and the Congress).  During that time, it was the most conveniently-located site where politicians and the persons wanting to talk with them could find shelter from the weather.  President Ulysses S. Grant used the Willard Hotel lobby as a refuge from White House pressure.  The hotel staff placed a leather armchair in a secluded corner of the lobby where he could enjoy his favorite brandy and cigars in relative peace.  Still, he was pestered by power-brokers seeking his attention.  It is said that he called such people “lobbyists”.

4.  Quote of the Month

Defendant in a tax case said, “As God is my judge, I do not owe this tax.”  The judge replied, “He’s not, I am, you do.”


Stanley Turkel, MHS, ISHC (www.stanleyturkel.com) 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 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.54 / Famous Japanese Capsule Hotel; Dunkin’ Donuts Independent Franchise Owners Association; Remember Magic Fingers? / Stanley Turkel / July 2009
Nobody Asked Me, But No.53 / Historic Hotel Theresa: the Waldorf of Harlem; Make Mandatory Arbitration Illegal / Stanley Turkel / June 2009
Nobody Asked Me, But No.52 / At Long Last; New York’s Essex House; Origin of Mother’s Day;  An Annual Feast for Number Crunchers; The End of the Hotel Bathtub?/ Stanley Turkel / May 2009
Nobody Asked Me, But No.51 / Transformation of the Shelton Towers Hotel; One Hotel’s Fate 119 Years Ago / Stanley Turkel / April 2009
Nobody Asked Me, But No.50 / Do You Know About O8A? Do Hotel Franchisees Need Independent Associations?The Best Franchise Advisory Councils / Stanley Turkel / March 2009
Nobody Asked Me, But No. 49 / Slave Trading at the Saint Charles Hotel in Washington DC, Why Are Some Hotel Franchise Companies Defranchising Exterior Corridor Hotels / Stanley Turkel / February 2009
Nobody Asked Me, But No. 48 / New President of Wyndham Ignores the Real Issues; Hotel Franchises Compared to Auto Dealer Franchises / Stanley Turkel / January 2009
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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