News for the Hospitality Executive
Nobody Asked me, But… No. 77
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.
announcements come at a time
when construction financing is scarce and debt is available mostly for
and acquisition of existing hotels. Jane
Larkin, managing director of Larkin Hospitality Finance writes
“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@example.com. 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: firstname.lastname@example.org)
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.
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@example.com.
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.To order the book, go to www.greatamericanhoteliers.com. I heartily recommend it.”
Stanley Turkel, MHS, ISHC
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Asked Me, But… No. 73: Impertinent Question Still Seeking a Pertinent
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