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Nobody Asked Me, But… No. 65:

A Well-Deserved Compliment for Steve Rushmore;
Impertinent Questions in Search of Pertinent Answers


By Stanley Turkel, MHS, ISHC, June 11, 2010
 

1.  A Well-Deserved Compliment

Congratulations to Steve Rushmore on the 30th Anniversary of HVS International, the global hospitality consulting organization, with 400 plus employees in 30 offices on five continents.  What a remarkable accomplishment!

Of all the great studies and reports that HVS produces (many of them without cost), none strikes me with more relevance than the HVS U.S. Hotel Franchise Fee Guide.  It illuminates the world of hotel franchising with irresistible numeric logic.  Many hotel owners do not realize that the total cost of associating with a national brand over a ten-year period runs between 0.8% and 11.4% of room revenue.  The HVS Guide reveals that this represents the second highest single expense (after payroll) for most hotel owners. Back in 1989, Steve wrote: 

“When evaluating a potential hotel franchise, one of the most important economic considerations is the structure and amount of the franchise fee.  Hotel franchise fees are the compensation paid to the franchisor for the use of the chain’s name, logo, identity, image, goodwill, systems, procedures, marketing, referral and reservation system.  Franchise fees are normally…an initial fee… plus continuing fees paid periodically during the term of the franchise.”

The Guide enables hotel owners to evaluate the franchise fee structure and the total cost of initial and continuing fees before determining whether or not the price/value relationship warrants the cost of the franchise.  To his everlasting credit, Steve Rushmore has delineated the real cost of hotel franchises.

In addition, I applaud Steve for his: 

  • clarion call for franchisor reform 
  • clear-eyed analysis of hotel management contracts 
  • early recognition that the standard reserves for replacement were insufficient at 3% of total revenue
  • surprising report on “The Impact of Hurricane on Supply and Demand”
  • dream to establish a Museum of Hotel Administration
  • collection of 9000+ guest room keys
  • installation of an original Servidor in his Mineola, N.Y. office
  • support of The Charity Society, a Quaker institution in existence since 1794.  It is “an institution for the use and benefit of the poor among the black people.”  The history of The Charity Society is, in a sense, the history of the Religious Society of Friends on Long Island, and touches on issues that affect us all.
2. Impertinent Questions in Search of Pertinent Answers

-Stacey Mieyal Higgins, Managing News Editor, HotelNewsNow, posted her Blog (on June 9,  2010) after day one of the 32nd Annual NYU International Hospitality Industry Investment Conference and asked “Can someone answer the tough questions, please?:

  • Question:  At what point will the hotel companies step in to the Gulf Coast issue and lobby on behalf of their owners or offer assistance?  When oil reaches Key West? The East Coast?
  • Question:  How do you measure a recovery? 
  • Question:  The Travel Promotion Act seems like a start.  What’s the next step?
  • Question:  How many more brands can we add to the marketplace? Are you going to let any existing brands fade into the sunset?  Have any just simply outgrown their relevance?
  • Question: Why don’t all the big brands get together and figure out a unified position on online travel agent relationships? Would demand dry up without the third-party sites?
  • Question: Are you seeing a leisure-led recovery?
  • Question: Will LeBron James stay in Cleveland?


- Hyatt’s first annual meeting on June 9, 2010 as a public company was closed to the media.

  • Question:  What is Hyatt trying to hide? Corporate governance experts said that while some restrictions are commonly placed on the media, an outright ban is rare for a publicly-traded company.


3. Quote of the Month

“Always do right.  This will gratify some people and astonish the rest.”
      Mark Twain


Stanley Turkel, MHS, ISHC has just published “Great American Hoteliers: Pioneers of the Hotel Industry.” It contains 359 pages, 25 illustrations and 16 chapters devoted to each of the following pioneers: John McEntee Bowman, Carl Graham Fisher, Henry Morrison Flagler, John Q. Hammons, Frederick Henry Harvey, Ernest Henderson, Conrad Nicholson Hilton, Howard Dearing Johnson, J. Willard Marriott, Kanjibhai Patel, Henry Bradley Plant, George Mortimer Pullman, A.M. Sonnabend, Ellsworth Milton Statler, Juan Terry Trippe and Kemmons Wilson.  It also has a foreword by Stephen Rushmore, preface, introduction, bibliography and index. Visit www.greatamericanhoteliers.com to order the book.
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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. 64: Best Western Finally Makes a Move; Cuba, The Caribbean’s Hottest Destination / Stanley Turkel / May 2010
Nobody Asked Me, But - No. 63: Can Airlines Learn From Hotels?; Memo to Ian Schrager / Stanley Turkel / April 2010
Nobody Asked Me, But No. 62 / Do the Radisson Franchisees Agree with Carlson's billion-dollar Makeover Program? At Last: A Win-Win Victory for Tourism; Congratulations to the Harris Rosen Foundation / Stanley Turkel / March 2010
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