News for the Hospitality Executive |
Public
Relations Trumps Common Sense; Nobody Does It Better; Plaza
Hotel’s Oak Room to Close;
Pay Attention to State Franchise Laws; Quote of the
Month
By Stanley Turkel, CMHS, ISHC
June 6, 2011 1. Public
Relations Trumps
Common Sense The following
eleven new brands
were announced in the past three months which adds up to an astounding
79 new
hotel brand announcements in the past 9 months.
These
announcements come at a time
when construction financing is scarce and debt is available mostly for
refinancing
and acquisition of existing hotels. Jane
Larkin, managing director of Larkin Hospitality Finance writes
(HotelNewsNow
5/9/11): “Most industry
analysts don’t expect debt development to return in earnest for another
two to
three years. What hotel owners,
operators and developers need to understand is why financing for new
development is not more available and why now is the time to refinance
and
buy.”
2.
Nobody Does It Better Every two years,
HVS evaluates the
fees charged by hotel franchise companies in the U.S.
The purpose of this analysis is to provide a
comparative review of various hotel franchise brands based on
applicable
franchise fees. When evaluating a
potential hotel
franchise, one of the important economic considerations is the
structure and
amount of the franchise fees. Second
only to payroll, franchise fees represent one of the largest operating
expenses
for most hotels. There is no other
report as
important as this one for the owners of the 32,500 franchised hotels in
the
U.S. To
obtain a copy of the HVS 2001 U.S. Hotel Franchise Fee Guide, send an
e-mail
to: [email protected]. Stephen Rushmore is president and founder of
HVS, a global hospitality consulting organization with offices around
the
world. 3.
Plazas Hotel’s Oak Room to Close The New
York Times reported on May 6, 2011: The Plaza Hotel’s Oak
Room restaurant, long a symbol of grandeur that evoked Edith Wharton’s
opulent
turn-of-the-century New York, is scheduled to close after a vitriolic
fight
between its operators and the hotel’s owners.
In the chapter
about the Plaza
Hotel (1907) in my forthcoming book, “Defying Time: 100+ Year-Old
Hotels in New
York,” I write about the Oak Room’s fabulous history: The Oak Room,
originally
the Men’s Bar, remained a bar until Prohibition when the bar at the
west end
was removed and the room was used for storage. Part of the
1940s
restoration was the addition of three murals by the American painter
Everett
Shinn, a member of the “Ashcan School”, a turn-of-the-century movement
to
recreate realistic cityscapes. Each time
the hotel was sold after reopening the Oak Bar, the Shinn paintings
were not
part of the sale and each successive owner had to negotiate separately
for
them. Westin Hotels negotiated for 14
months before actually buying them…. In the late
1940s the
Oak Room was opened to women for supper but closed to them until 3PM
when the
stock exchange closed….. On February 12, 1969, the National
Organization for Women
staged a sit-in at the Oak Room to protest the lunch men’s-only policy. Betty Friedan, Diana Gartner and a third
woman sat at a table and were refused service until 3PM.
After picketing and negative publicity, the
Plaza Hotel rescinded the mens-only policy around four months later. With the closing of the Oak Room, a sign of mismanagement and bad publicity, how can the Plaza continue to claim to be the most famous hotel in the world? 4.
Pay Attention to State Franchise Laws Attorney Mario
Herman, Esq.
recently posted a column on the Bluemaumau.org website that revealed a
major
condition that is often unspoken and unknown. Herman
reported on State Franchise Relationship laws in
sixteen states which
protect franchisees from certain unfair and capricious acts by a
franchisor. These laws govern such matters
as the parties
rights regarding termination and non-renewal. Relationship laws
seek to balance
the playing field between business-savvy franchisors which often have a
team of
lawyers drafting the franchise agreements and the inexperienced
franchisees who
often are unrepresented by counsel when signing a franchise agreement
on a
take-it-or-leave-it basis. Such statutes may
override some
provisions contained in franchise agreements regarding termination and
non-renewal, by providing that franchisors must give certain “notice”
periods
and must have “good cause” for terminating and/or not renewing a
franchise
agreement. Many of the state
franchise
relationship laws contain anti-waiver provisions and clauses which
allow franchisees
to litigate in their home state rather than in the franchisor’s state,
no
matter if the franchise agreement contains a venue/jurisdiction clause. Since available
remedies vary from
state to state, an experienced franchisee lawyer will be able to advise
you of
your rights under state law and the covenant of good faith and fair
dealing. (email:
[email protected]) 5.
Quote of the Month “It usually takes
me more than
three weeks to prepare a good impromptu speech”
Mark Twain
Read my book to
learn about the
following sixteen hotel 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 Manchubhai Patel, Henry Bradley Plant,
George
Mortimer Pullman, A.M. Sonnabend, Ellsworth Milton Statler, Juan Terry
Trippe
and Kemmons Wilson. Go to my book
website (www.greatamericanhoteliers.com)
and click on the order link for a reduced rate. Do
it today. Coming Soon My new book,
“Defying Time: 100+
Year-Old Hotels in New York” will be published by September 2011. To reserve an autographed copy, email me at [email protected]. Stanley Turkel,
CMHS, ISHC recently
published his new book, Great American
Hoteliers: Pioneers of the Hotel Industry. It
contains 359 pages, 25 illustrations and 16 chapters.
It also has a foreword (by Stephen Rushmore),
preface, introduction, bibliography and index. Ed Watkins,
Editor of Lodging
Hospitality wrote, “The lodging industry typically doesn’t spend a
lot of
time considering its past. Some may find
that odd since compared to many other businesses (computers,
automobiles
aircraft), the hotel business is one of oldest if not the oldest, in
the
history of man. That changed recently
with the publication of.... Great
American Hoteliers: Pioneers of the Hotel Industry, a fascinating
and
entertaining series of profiles of 16 men who author Stanley Turkel
argues were
the builders of the modern American hotel industry.
That’s significant because due to the efforts
of these titans (and others, of course), the American style of
hotelkeeping
long surpassed the European tradition that reigned for centuries. Some of the
profiles contain cover
names (Hilton, Marriott, Johnson, Wilson) familiar to even casual
students of
hotel or U.S. history. Sadly, just one
of the pioneers covered the book (John Q. Hammons) is still alive and
active in
the industry. To me, the more
interesting tales cover hoteliers about whom I knew little before
reading his
book but now have a greater appreciation for their contributions. The most
compelling story focuses
on Kanjibhai Manchhubhai Patel who Turkel identifies as the first
Indian-American hotelier. K.M. Patel
arrived in San Francisco in 1923 and soon began operating a small
residential
hotel in the city. The rest, as they say,
is history; Today, Indian-American hoteliers dominate the industry with
their
trade association, AAHOA, recently surpassing 10,000 members. As Turkel says, this community represents a
true American success story.
|
Contact:
Stanley Turkel, MHS, ISHC |