Nobody Asked Me, But... No. 72 - By Stanley Turkel, MHS, ISHC

1.  Impertinent Question In Search of a Pertinent Answer

Question (For the third consecutive month):

Since there are more than 100 operating hotel brands and 28 additional recently-annouced new brands, is the current spate of new hotels brand- sensible or brand proliferation?

In the past few months, the following 13 new hotel brands have been announced:

• Capsule Hotel in China by Ta Zan


• BLVD Hotel & Spa by PNK Group


• Ramada Encore by Wyndham Hotel Group


• SLS Hotel by Las Vegas SBE


• Snotels by Michael Metcalfe


• 3 Palms by America’s Best Franchising Incorporated


• Tune Hotels by Air Asia


• Ginger Hotels by Tata Group


• Nuo by Kempins Ki Hotels


• Ibis by Accor


• Hotel ICON in Houston, Texas


• De Vere by Alternative Hotel Group


• J Hotel by Shanghai Jin Jiang International Hotels 

2. Does The Industry Really Need Another Brand?

Recently Peter Yesawich, Chairman and CEO of Y partnership answered, “The concept of “need” can be subjective.  Yes, evolving market demands often require new products to satisfy them, but let’s not confuse market influence with the pressure to drive profit to the bottom line.”

“Brands are created in this business principally as a means to sell franchises,” Yesawich said.  “They’re not necessarily created to reflect market conditions.  You will see that primary motivation for their introduction is to carve up the space in a more finite manner to hopefully sell franchises.  That’s the bottom line answer.”

As Stefani C. O’Connor, Executive News Editor, Hotel Business Green Book (2011 Almanac & Market Guide) writes:

If you bring a literal interpretation to lodging’s field of brands, the look of the landscape heading into 2011 is more a hodge podge of entities that have sprouted up rather than a totally cultivated, well-laid out assemblage of choices for potential licensees to stroll among and pluck at will for their portfolios…

 

In many fields, a “more-the-merrier” approach is welcome; in lodging, not so much.  More brands means more competition, greater dilution of the discretionary dollars travelers could spend and, in some cases, more confusion for consumers who are being overwhelmed with options, a situation that also exists for potential developers and licensees.

3. Hilton’s Hands Get Slapped in Starwood Settlement

Ed Watkins, Editor-In-Chief of Lodging Hospitality, gets it right (as usual):

Starwood accused Hilton of stealing documents related to the development of the W brand.

As many analysts believed, Starwood’s sensational lawsuit against Hilton Hotels won’t make it to a courtroom.  In a decision filed in federal court yesterday, the two sides agreed to a settlement of the nearly two-year-old suit in which Starwood accused Hilton of stealing trade secrets to launch the since-scuttled Denizen lifestyle hotel brand.

While most terms of the settlement weren’t announced, Hilton will remain under scrutiny by the court to prevent a reoccurrence of the alleged actions.  Hilton said it consented to an injunction that includes “certain business restrictions for a period of two years,” which according to some press reports precludes creating a lifestyle or branded boutique brand during that time.  Starwood further announced that the settlement requires Hilton to be subject to monitors appointed by the court “to assure the conduct that occurred does not occur again.” And finally, and perhaps most ominously, the court filing indicated a federal grand jury will continue to look into whether Hilton and some of its former executives should face criminal charges.

Hilton CEO Chris Nassetta was humble in commenting on the settlement, saying, “Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels and Resorts Worldwide and is pleased to bring an end to this prolonged litigation.”

It seems to me that Hilton Worldwide will suffer long-lasting, unpleasant consequences.  Since Hilton will remain under court oversight that includes “certain business restrictions for a period of two years”, they may well be precluded from making important brand improvements.

4.  China-Based Developers Buy U.S. Hotels & a Management Company

In an exciting but relatively unknown series of acquisitions, the following entities were recently acquired by Chinese companies:

• Universal Sheraton Hotel Los Angeles by Shenzhen New World Group


• Marriott Downtown Los Angeles by Shenzhen New World Group


• Holiday Inn Select, Claymont, Delaware by Minmetals, Inc. (now being converted to a Crowne Plaza)


• Crowne Plaza Los Angeles by BGT (Beijing Tourism Group: developer of Home Inns, one of the most popular economy inns in China).


• Interstate Hotels & Resorts by Shanghai Jin Jiang International Hotels

5.  Quote of the Month

“Nothing I’ve ever done has given me more joys and rewards than being a father to my children.”

                                                                                                Bill Cosby                                                                                    

                 

 

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 at reduced rates: 

• Electronic Book   $  4.95 
• Paperback (6x9)   $25.00 
• Dust Jacket Hardcover (6x9)  $35.00

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