Duff on Hospitality Law

Since the 2013 Hospitality Law Conference, we have received many requests for the Garvey Schubert Barer presentations. Well, here they are. Ruth and I are happy to further explain them and other details on the trending topics. Please give us a call or email. It was a fun and educational conference so it is nice to look back at these slides!

Over the past 2 days, MPI hosted its annual Cascadia Educational Conference in Portland, Oregon. I had the pleasure of participating at this year's event, presenting on group sales issues and privacy. Copies of my presentations are available here: Group Sales Contracts: Interesting Case Studies and The Rising Significance of Guest Information.

Congratulations to MPI for another terrific event. I look forward to hopefully seeing everyone at next year’s Conference.

Last week saw another Americas Lodging Investment Summit come and go. Over the course of 3 days, nearly 2500 lodging owners, operators, investors, consultants and other industry members descended on host hotel JW Marriott and the surrounding LA Live attractions. The 2500 attendees were the third highest in ALIS history, nearing the peak achieved back in 2006 and 2007 prior to the recession.

From the many attendees I spoke with during the course of the Conference, I’d describe the mood of most attendees as incredibly optimistic. With operating fundamentals expected to continue to improve in 2013 and beyond (more on this later) and supply growth expected to stay below the industry’s 30-year average, there was much to celebrate. From the discussions I had, many owners and operators are looking at 2013 as a year of incredible growth.

While I usually don’t make many of the sessions while at the Conference, the one session I try to make each year is the annual industry forecast. This year’s forecast entitled, “The Numbers – Where Are We Now and Where Are We Headed?” featured presentations by Randy Smith (Smith Travel Research), Mark Woodworth (PKF Consulting), Art Adler (Jones Lang LaSalle) and Adam Weissenberg (Deloitte & Touche). Highlights from Randy Smith’s presentation included . . .

• • Since 2010, U.S. lodging demand has increased at an annual rate of 15.7%
  • December 2012 set a new U.S. lodging demand record – 91.7 million guest rooms
  • It has taken approximately 5 ½ years to restore U.S. ADRs from the peak achieved in 2007

Our friends at Meeting Professionals International would like to invite you to their October educational program. Please see below for all of the details!

Yesterday, PCMA and MPI presented their 11th Annual Industry Summit here in Seattle at the Washington State Convention Center in Seattle. I had the pleasure of participating at this always well-attended event and spoke on current trends in the world of group contracts. If you would like a copy of my presentation, please use this link: Group Sales Contracts: Current Trends and Interesting Case Studies.

Congratulations to Summit co-host Cathy Mason for another terrific event. I look forward to seeing everyone at next year’s Summit.

Alcohol has been making the headlines over the past several weeks in Washington as the state prepares for Initiative 1183 to take effect. And while the privatization of liquor sales remains a popular topic, another alcohol-related headline deserves some notice from business owners. The Seattle Times recently described a questionable situation caught by KOMO News cameras: beer in the temporary offices of Kiewit, the construction firm responsible for some of the work being done on Highway 520. Partially in response to the pending investigation by the Department of Labor and Industry, clients and other readers have been asking whether a business can have alcohol in the workplace without running afoul of liquor regulations.

By now, nearly every revenue manager, electronic distribution manager and sales and marketing manager is familiar with the significance of keywords and the need for brand owners to manage third parties’ use of keywords in search-based Internet marketing. Every negotiation of an online distribution agreement (whether direct-to-consumer, wholesale or otherwise) should include careful consideration about reasonable restrictions or conditions a hotelier will place on a distributor’s use of keywords.

As technology continues to evolve and to disrupt many traditional travel sales, marketing and distribution channels (Tnooz alone seems to report on new search-based tools weekly), owners and operators must reconsider their historical (and by now standard) approaches to critical contract provisions that address how and to what extent a distributor may use the hoteliers’ trademarks, trade names, logos and other intellectual property, including use as keywords. The recent and much publicized launch of Promoted Hotels by Google served as an important reminder of this fact.

Promoted Hotels is Google’s new search-based marketing tool that allows hoteliers, OTAs and anyone else interested in securing a preferred booking position over other channels to bid for the right to be the primary (and sometimes, sole) booking option in ads that appear at the top of the Google Hotel Finder search results. As you might expect, nearly all of the searches that I ran for hotels in various locations across the U.S. featured ads and links placed by OTAs and not the featured properties themselves. Does any of this sound familiar?

Bringing in an operator, restaurateur or celebrity chef to provide food and beverage service in a hotel can provide immediate and significant benefits for a hotel and its guests. Hotel owners and operators use the experience, vision and creativity of third party food and beverage providers to generate attention, energy and business for hotel properties. Further, while hotels brand their properties and earn their reputations over decades, pockets of a hotel property can be made available to third party food and beverage providers to create a more immediate change in brand direction or environment. Despite the lure, however, chemistry and contract details are important. To avoid being left with a bad taste, owners and executives should consider a number of important contracting details while evaluating or courting a third party food and beverage provider.

Garvey Schubert Barer’s Hospitality, Travel & Tourism practice group, in conjunction with program sponsors and presenters, recently hosted two morning Hospitality Forums in Seattle, Washington and Portland, Oregon. The forums were designed for hotel owners, developers, investors and operators as well as hospitality industry service providers, consultants and lenders. Both events were well attended—a testament to the sponsors and presenters who offered current data, insights and analysis into issues of importance to those in the hospitality industry. 

In particular, Matthew Gardner, of Gardner Economics, provided a macro-level discussion of current economic trends and then narrowed the focus to the Northwest. Matthew sees Seattle as having strong institutional underpinnings that will contribute to continued economic growth.  Within the Northwest, condominium projects are not being approved by banks. Apartment construction projects in Seattle are being approved but that segment may soon be over saturated. Matthew did not express concern with the limited amount of hospitality construction underway. A similar presentation by Tom Potiowsky, the PSU Chair of Economics and Director of the Northwest Institute for Applied Economic Research, led off things in Portland. Although not quite as bullish on the local economy as Matthew, Tom was confident that a recovery (although slow) was underway in Oregon, and more particularly, the greater Portland market. Copies of Matthew’s presentation and Tom’s presentation are attached. 

Days 2 and 3 at this year's ALIS conference were filled with numerous highlights, including a very well attended presentation (or should I say, political commentary) in the Nokia Theater by "the Donald" himself, Mr. Donald Trump. Days 2 and 3 were also filled with hundreds of meetings by conference attendees in nearly every hallway and corner of the hosts JW Marriott and Ritz Carlton.

While optimism continued to be the theme most often heard in the meetings I attended, the optimism was far from unbridled. With so many unknowns remaining in the world (e.g. European debt crises, continued high unemployment, the upcoming presidential election), nearly everyone recognized that the many signs pointing to an industry rebound could quickly change.