Hotel Management Consultant Update on Recent Hotel Lawsuit Issues

As part of our hotel management consultant updates for legal professionals and their clients, a major chain and operator made the news again on two separate lawsuits. Of particular interest is the first allegation involving its sales force practices regarding a Virginia hotel near DC. The second involves a Hawaii property and also the subject of another lawsuit previously reported. Here are summaries on the first where Marriott International is the Defendant and what issues owners, operators and franchisors might concern themselves: “The lawsuit alleges: That single program has decimated most of the sales efforts undertaken by the hotels themselves. It has ceded responsibility for generating group, meeting, and transient business to employees whose loyalties lie not with individual hotels, but with Marriott itself.” “According to Marriott’s full statement: The facts belie the claims of plaintiff and plaintiff’s counsel, which are without merit and which we’ll contest vigorously. Our new field sales structure is reaching more customers and aggressively pursuing market share from the competition and generating more business for all of our hotel owners.” The main problem according to the allegations and what this hotel management consultant reads is that the hotel was impacted significantly in terms of its bookings when the sales force was reorganized. There is also a big question as where staff loyalties lie to an individual hotel when a sales department is centralized and working on behalf of the entire chain. In the second lawsuit, a Marriott subsidiary is the Plaintiff and according to the story, it involves to some extent behind the scene resort management company negotiations. One issue is the 2% base management fee for the new hospitality management services versus 4% that the former operator charged the resort property. Are you an attorney or legal professional working on similar hotel lawsuits? What significant issues can you share with this hotel management consultant and our readers to be concerned about when a hotel brand or franchisor reorganizes its sale force practices?