News & Insights: hospitality
Are We There Yet? Looking down the road at the health of the hospitality sector
September 1, 2016
Times are good for many of us in the hospitality industry. Across every sub-sector, from hotels and airline travel to new building development and job creation, the industry continues to enjoy the fruits of a new US economic recovery. And yet, those who have lived through downturns and shrinking markets find times like this to be perilous, leading all of us to ask, “Are we there yet?” — i.e. are we at the peak of the market and in for a nasty shock.
In this article, Lawrence Cohen explores the ups and downs of the US hospitality industry and the possibility that we are near the top of the business cycle.
This article, “Are We There Yet?”, was originally published in the September 2016 issue of Metropolitan Corporate Counsel.It can be found on page 29.
"Irrational Exuberance” or Golden Age: Is This The Best of Times for New York City Hotels?
January 11, 2016
What’s changed in the NYC hospitality sector over the past two years? Nothing, but everything…
Partner and Hospitality Group Leader Lawrence Cohen has refreshed his 2014 article, “’Irrational Exuberance’ or Golden Age: Is this the Best of Times for New York City Hotels?” and discusses the impact that the last two years have had on the market.
To Operate or Not to Operate Your Hotel Restaurant Yourself...That is the Question
April 29, 2015
Upscaling your hotel restaurant can do wonders for your brand. For hotel owners who are ready to renovate their property as a result of a healthy economy and are looking to upgrade services, the restaurant is often a prime target for renovation. For a well-run full-service hotel, quality food service is paramount. But a top-flight hotel restaurant can be a draw in its own right, attracting customers who might not otherwise visit the hotel, and adding energy and an air of prestige to help build the hotel’s brand. Leasing the operation to a third party may be the obvious answer – and it can be profitable to boot. But there are traps for the unwary. And the result – rather than a smooth-running business – can become a nightmare of obligations that don’t fit well with the restaurateur’s talent and business and can result in ongoing contract disputes. And if you, the hotelier, decide to run the restaurant yourself, you’ll find that unless you know the business well, the execution may be much different than your original plan.
Committing to a Hotel Conversion? Look Before You Leap
January 7, 2015
Conversions are a hot topic in the hospitality industry – understandably, because the hotel market itself is hot, and converting a property is a quick way to establish or expand your footprint. In many cases, it’s far easier and much less expensive to convert an existing building than it is to build from scratch. Why wouldn’t you want to get a fast start on an opportunity – and possibly a jump on the competition – by committing to a conversion? For all players in hotel property – real estate investors looking to move into hospitality, business owners who want to claim a share of hospitality industry revenues and established hotel owners in need of an expansion path – conversion looks like the smart way to go. Is it? Not always.
Pigs Get Slaughtered: Do’s and Don’ts for Buyers and Sellers in a Red Hot Hotel Real Estate Market
May 2, 2014
Today’s hotel transaction market is definitely hot – after several slow years, the pace has accelerated sharply – and it’s exciting for both buyers and sellers. Should you be a buyer . . . a seller . . . or both? Should you act now, or wait? The answer depends on your situation – and also on your expectations. How realistic are they? A hot market can be a good time to make money. It can also burn you. As with any other market, you need to understand the market dynamics and develop a strategy. Above all, don’t get greedy. What’s said of the stock market can also be said of buying and selling in the hospitality industry: Bulls make money and bears make money. But pigs get slaughtered.
VIDEO: Buying a distressed hotel? Avoid being the dog that catches the car
May 28, 2013
Acquiring a distressed hotel can be a very exciting strategy for an owner or entrepreneur. But you have to keep your eyes wide open because a distressed property can come with problems and risks that are often overlooked. Learn what happens and what challenges you face when you finally close the deal on your troubled property -- and the right steps to take that can help you come out ahead.
VIDEO: Word to the wise for hotel owners
May 28, 2013
The hotel business is different -- it's not like other properties where decisions are made periodically. Hotel decisions are made daily, even hourly, or because the weather has changed -- and they are often made by the representatives of your management company, without consulting you, the owner/entrepreneur. The solution? Keep your management company -- but be smart and hire key people who report to you. And always trust . . . but verify.
A Key to Managing Your Hotel Through Troubled Times: Keeping Your Lender Happy
May 17, 2013
You bought your hotel with the highest expectations. And why not? All owners do. But the best-laid plans of hotel owners can go astray. Maintaining control of a distressed hotel can be a challenge. To meet it, focus on your contingency plan and have the right team in place.
Avoid Becoming "The Dog That Caught The Car" When You Acquire A Distressed Hotel
April 3, 2013
A distressed hotel isn’t an acquisition you can make and then forget. It won’t run on its own. It requires daily, hands-on, operational management – a specialized, knowledgeable kind of management sensitive to the particular realities of a hotel in turnaround, a management that is able to work with the hotel’s people and its physical plant and set the property back on the road to success. This article reviews how an effective turnaround plan will anticipate, and help you avoid a worst-case outcome.
To Succeed with Your New Restaurant, Take a Businesslike Approach
November 1, 2012
The restaurant business can be a wonderful, rewarding pursuit. It can also be a trap. The industry is one of the most challenging in existence. It demands a mix of creativity, inspiration and hard business sense. And like any industry, it imposes its own very specific, very demanding business conditions. As in any other field, experience counts and systematic planning is rewarded.
A Major Challenge for Hotel Owners: Managing Employees and Labor Issues
May 15, 2012
The largest ongoing expense for a hotel is, of course, payroll. Whether your hotel is union, non-union, five-star luxury or limited service, managing your employees and their costs are one of the biggest challenges a hotel owner or operator can face.
Watchdogs for Your New Hotel: Why a Hotel Owner Needs a Friend (or Friends) on Top of Managers and F
May 15, 2012
New owners often come into the hospitality industry from a background in real estate. Buying a hotel seems like a logical next step for those who own other forms of commercial property, such as office buildings and retail locations, and who are looking to expand their portfolios. But owning a hotel isn't like owning other types of property, even those that, like hotels, involve third-party management. Hotel ownership carries its own terms and conditions, its own rules of engagement, and its own particular dangers that can trap – and cost – the unwary.
Facing Up to the State and Local Tax Headache The Internet Era Serves Up to the Hospitality Industry
By Steven P. Bryde | April 30, 2012
The hotel you operate sold a block of rooms through Expedia. Expedia charged consumers $100 per night. You received a discounted rate of $80 per room per night from Expedia – discounted because Expedia went to the effort of advertising and booking the rooms for you. In addition, Expedia paid you $8 per room per night to cover the 10 percent occupancy tax – based on the discounted rate of $80 per night. Expedia keeps $22 per room per night for itself, as its fee. Has Expedia done the right thing? Or has it underpaid you for the occupancy tax?
An Alternative Approach to a Critical Issue in Employment: Identifying and Correcting Potential Disp
December 1, 2010
Employers define human resources policies and practices and make employment decisions that, while based on legitimate business decisions, may have a disparate effect on different groups of employees. A hypothetical example of selections for a proposed reduction in force (RIF) illustrates how an evaluation can reveal a disparate impact of a protected class group. Unveiling potential disparities before the implementation of the proposed RIF allows management to revise the goals, objectives, and the planning of the selections for termination, correcting a potential disparate effect of protected class groups, and minimizing the likelihood of legal disputes.
See Josefina's article originally published in Employee Relations Law Journal, Winter 2010.