Recent court decisions have delayed the April 30, 2012 deadline for complying with the NLRB’s notice posting rule.  Based on the court decisions, employers are not required to post the statement of employee rights at least for now.

How did the deadline get delayed? Business groups filed two challenges to the notice posting rule – one in the District of Columbia and the other in Charleston, South Carolina. On April 13, 2012, the South Carolina court invalidated the entire notice posting rule, but questions abounded as to whether the ruling applied outside of of South Carolina. On April 17, 2012, the United States Court of Appeals for the District of Columbia issued an emergency order prohibiting the NLRB from enforcing the rule, pending a ruling on the merits of the case before it. The District of Columbia court’s decision clarified that employers do not need to post the notice required in the rule. The NLRB posted a notice on its website confirming the delay in implementation of its rule.    

Where does this leave employers? For now, employers do not need to post the notice required by the rule. Both courts will decide the cases before them and the losing party may ask the United States Supreme Court to review.

If you have questions about the rule or how it affects you, please let Diana or me know.

Thank you Mike . . .

The 2010 Standards require that public accommodations provide at least one accessible means of entry to small swimming pools, which must either be a sloped entry or a pool lift.  Larger swimming pools must have two accessible means of entry, one of which must be a sloped entry or a pool lift.  After analyzing the cost and safety issues associated with methods of accessible entry, most hoteliers decided that a portable pool lift would be the safest and most cost-effective option.  However, the 2010 Standards did not specifically address portable pool lifts or when or how those lifts would be put in place. 

As a result, on October 27, 2011 the American Hotel & Lodging Association sent a letter to the Department of Justice (DOJ), the administration that enforces the Americans With Disabilities Act, asking for clarification on various pool lift issues, including whether portable pool lifts would satisfy the 2010 Standards, and how quickly the lifts would have to be put in place.  AH&LA pointed out significant safety concerns related to permanent lifts, including the risk that guests (including children) could injure themselves on or around the lift unless a lifeguard were present during all operating hours.

On January 31, 2012, DOJ issued a guidance taking a very hard line on the requirements of the 2010 Standards.  Specifically, DOJ stated that only “fixed” (i.e., permanent, rather than portable) pool lifts are acceptable unless a hotel can show that installing a fixed lift is not “readily achievable,” and even then the portable lift must be installed during all hours that the pool is operating.  DOJ also took the position that sharing a lift between two pools is not acceptable unless the operator can show an “undue burden” from having one fixed lift per pool. 

DOJ’s unexpected response three months after AH&LA’s letter left hoteliers scrambling to prepare their pools by the compliance deadline, March 15, after which they could potentially face fines and lawsuits as a result.  After determining that they could not meet this deadline, partially due to limitations at the few manufacturers of fixed lifts, hospitality industry members met with DOJ on February 8 to express their concerns and to request additional time to comply with the new guidance.  DOJ told the hoteliers that no extension would be forthcoming.

However, on March 15, the day that the new requirements were to go into effect, DOJ announced that the deadline for compliance with pool accessibility requirements would be extended by 60 days.  One week later, on March 22, DOJ published an extension of the deadline to May 21, 2012, and asked for comment an additional six-month compliance extension.

Most recently, on March 26, 2012, Congressman Mick Mulvaney (R-SC), along with 26 other co-sponsors, proposed the Pool Safety and Accessibility for Everyone (Pool-SAFE) Act.  The effect of the proposed legislation would be to delay the pool lift requirement by a year after enactment of the Act, to permit the use of portable lifts on request to satisfy the 2010 Standards, and to allow sharing of lifts between multiple pools (or a pool and a spa) on a property. The bill has been referred to the House Committee on the Judiciary to determine whether it should be reported to the full House for consideration.  Since this time, an additional 20 House members signed on as co-sponsors of the bill.

It is too early in the life of the Pool-SAFE Act to opine on whether it will be enacted (or even move beyond the House committee).  It is also too early to opine on whether DOJ will grant another six month extension, as contemplated in the March 22 Federal Register publication.  We will provide additional updates as soon as any new developments occur.  However, for the moment only fixed pool lifts are acceptable (unless not readily achievable), and the compliance deadline is May 21.  As a result, we recommend that hoteliers with pools check with local dealers on the availability and manufacturing lead time for fixed pool lifts.

Thank you Victoria for this important update.

Thanks to the internet, a single disgruntled employee can now do dramatic damage to a company’s image through posts on social media sites. (Just ask Domino’s Pizza or Hotel Renaissance.)  The social media policies employers have instituted in the last few years may work to inhibit online employer-bashing; however, they can also come perilously close to violating the law.  To assist employers in navigating this rapidly changing area of law, the National Labor Relations Board (“NLRB”) has issued two social media reports in the last seven months, explaining their rulings in several recent social media cases. As this posting demonstrates, even if you think you have a good social media policy, you may want to revisit it, given the latest NLRB guidance.

Employees in both unionized and non-unionized workplaces have protected rights to certain types of speech under the National Labor Relations Act.  These include, briefly, the right to discuss terms and conditions of employment and unfair labor practices with coworkers and the right to engage in concerted activity.  Employers who want to restrict employees from making disparaging comments about the company online must carefully phrase their policies to avoid trampling on these rights.

The NLRB guidance suggests that policies that use vague, general terms to describe restrictions will be struck down for being overly broad.  In one case, the NLRB rejected a policy preventing employees from “making disparaging comments about the company” on social media sites.  Another policy that was struck down prohibited online discussion about the employer unless conducted in “an appropriate manner.”  Yet another policy was deemed illegal when it prohibited “inappropriate discussions” and “insubordination or other disrespectful conduct.”  In each case, the Board reasoned that such broad language might lead an employee to think she was not permitted to complain about unfair working conditions or otherwise voice valid concerns about employment practices.  In short, if a policy could reasonably be read to restrict protected speech, it will probably be void.   

To avoid this pitfall, employers should narrow their social media posting policy to make sure that a rational person would not understand it to include protected activity.  One simple way to do this is to explicitly state in the policy that it is not intended to stop employees from exercising their rights under the NLRA.  Another suggestion is to use specific language, instead of vague terms, to describe what kind of online postings aren’t allowed.  A third option is to keep the broad term (such as “inappropriate”), but then provide examples of the types of speech that are not allowed.

How to avoid punishing employees for concerted activity taking place on Facebook.

The NLRB cases also show that an employer needs to be very careful when making the decision to terminate someone who has slandered the company online.  In this age of social media, a Facebook posting can easily be the beginning of protected concerted activity, and an employer who fires an employee for such a statement can get into trouble.

For example, if an employee posts a complaint about his working conditions on his Facebook page, and other employees who are his Facebook friends either contribute or “like” his posting, this is likely protected speech. There are many examples of terminations deemed unlawful when an employee was using social media this way, as the site functioned as a platform for the employee to air grievances and gain support from colleagues.

The critical distinction between protected and unprotected speech here is whether an employee is posting an individualized gripe—which is not protected—or discussing a collective concern that many employees have or that affects terms and conditions of employment.  If the latter, it may constitute concerted activity and cannot be the basis for a lawful termination.

To sum up, employers should avoid placing greater restrictions on online speech than they would in any other medium. Though the damage from a viral posting can be severe, this doesn’t entitle an employer to prohibit employees from engaging in protected speech about the terms and conditions of their employment or from organizing with other employees.

If you have questions or want additional information about these recent reports and their effects, please feel free to contact me or Greg.

Thank you Gregg . . . 

You may have heard about an influx of foreign investors into the “EB-5” program and wondered – what are they talking about and how can I get my project jump-started with it?

EB-5 is a short-hand reference to the “Employment-Based, 5^th-listed process for getting status as a lawful permanent resident, also known as a “green card.” It was created in the early 1990’s, but only came into its own beginning in 2008, when the great recession dried up local funding for major projects. It was then that many creative developers and others realized that making changes to their business model could open up an untapped source of investment, resulting in the creation of a longer-term relationship between developers and investors, and a potential return for investors that included not just increased wealth, but a new life in the United States. “Regional Centers” have become the focal point of EB-5 investment over the past few years.

So, is it worth taking the plunge and seeking foreign investment through the EB-5 program? Here are some of the issues that you should consider.

The basic rules are that a foreign person must (a) make a capital investment of at least one million dollars of his or her own money into a for-profit commercial enterprise that was created or restructured after November 19, 1990, and (b) at least ten full-time jobs must be created as a result of the investment over the required minimal two-year investment period. Some investments can be as little as $500,000 based on being either in a rural area or in a location in which unemployment exceeds the national average by 150%. The investor must take on a management role, which can be as minimal as being a limited partner. If, after two years as a green card holder, the investor can prove that the full investment has been made and job creation fulfilled, the government will convert the temporary green card into full status for permanent residence.

Regional Centers have become the main focus of EB-5 investment because many have located themselves within areas that allow for the lower investment level of $500,000, and because the job creation requirement for them allows consideration of direct and indirect jobs, such as at the shops, restaurants and services located near a project funded with EB-5 money.

Another variation of the EB-5 program is for “troubled businesses,” which must have been in existence for at least two years before the date of the investor’s filing. In these cases, the requirement of creating at least ten jobs is replaced by the requirement of simply maintaining the pre-investment level of employment. The business into which the investment is made must be able to prove a financial loss of at least 20 percent of its net worth for the 12-to-24 months preceding filing. At least ten jobs must be maintained under this approach.

Up to 10,000 immigrant visas are available each year, which includes the investor and dependent family members such as a spouse and unmarried children under 21. The program did not issue even 1,000 approvals in any year until 2008, when 1,360 were issued, with that number jumping to over 4,200 the next year.   Investment in Regional Centers, which allow for the pooling of funds into mega-projects, has grown in a similar manner, eclipsing individual investor applications by over nine to one. There has been an almost 100% increase in the number of Regional Centers in just the past two years, with more than 200 in 40 states as of the date of this blog.

It would certainly seem that this program should be fully utilized every year because it results in investment in the U.S. and job creation. So why isn’t it? There are many answers, including the government’s continued lack of clear guidance as to how to comply with its requirements. Some of the challenges include figuring out how to prove to the government that the money invested was acquired through lawful means and is truly “at risk” of total loss. Documentation of financing is not transparent in China, the source of the largest groups of investors. Counting the jobs created at the end of the two year window is another challenge. Whether it is because of the uncertainties of the process or poor quality of projects, the reality is that as many as 47% of the EB-5 filings have been denied each year, with the investor and his or her family required leaving the U.S. and the American dream. Fortunately, that denial rate appears to be dropping quickly.

A project that needs less than a few million dollars may want to consider seeking EB-5 investment from a limited number of foreign investors, carefully managing the investment and assuring the requisite job creation. Larger projects may focus on investment within a Regional Center, or creation of their own Regional Center, requiring for a longer-term approach to the process.

Is EB-5 and Regional Center investment a source of funding here to stay, or is it just a temporary source of investment because U.S. sources dried up? After the flurry of the past few years, I expect things to stabilize, with good projects coming and going as their particular needs arise.   

To find out more detailed information about the EB-5 program and Regional Centers, visit the U.S. Citizenship and Immigration Services website or contact me here at Garvey Schubert Barer.

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. 

Attendees in both Seattle and Portland also heard from industry veteran Chris Kraus of PKF Consulting USA.  Chris has become a fixture at the annual Hospitality Forum.  His presentations provide much of the same national trends data that ALIS participants receive but with a more detailed focus on Northwest markets.  Our participant program surveys continue to rate Chris’ analysis and predictions as valuable to participants, many of whom appreciate the fact that he always starts his presentation by looking back at his predictions from the year before.  ADR did not recover as well as predicted in 2011 but his predictions overall were very close to the mark.  Copies of Chris’ presentation for both the Puget Sound region and Portland are attached. 

The Seattle and Portland Forums then diverged with local presenters participating in panel discussions the first of which was Debt and Equity for Hospitality Projects.  The Debt and Equity panel included a diverse group of industry specialists including those with experience in traditional lending, SBA programs, EB-5 programs, private capital, mezzanine debt and development.  While the focus of many in the industry over the last few years has been restructuring debt and hanging on, the participants on the Debt and Equity panel were optimistic about 2012 noting that values for hotels are now within reasonable ranges, and money—from both traditional sources and less well know programs—is available for acquisitions, refinances and renovations.  For instance, SBA programs are available to those pursuing both acquisitions and renovation or PIP projects.   EB-5 is a complicated, but potentially very attractive, source of financing by foreigners seeking US Green Cards and GSB’s immigration lawyer, Gregg Rodgers, fielded several questions about that program.  The government’s immigration stimulus funding EB-5 has been showing increased usage in recent years, particularly in California, Seattle and a new project in Portland.  Although still relatively underutilized (the government offers 10,000 Visas annually since 1990, and last year 4,000 were issued for this program),  it’s being utilized among foreign investors who are looking for ways to get their green cards for themselves and family in the USA.  With $500,000 – $1 million and promises for jobs in economically-challenged areas, this is proving to be an avenue for developers looking to augment their capital for hotel development.

Our next panel then debated the power of branding and featured a variety of industry perspectives, including those of the international branded owner and operator, the independent owner and operator, the marketing association, the hybrid brand, the well-respected national feasibility and valuation expert and the founder and CEO of a NW technology company that is working to provide hotel owners and operators much of the same marketing resources that are available from the national brands and marketing associations.  The sometimes lively discussion covered the relevancy of brands, possible dilution among brands, the growing influence of the independent or boutique hotel, rapid advances in technology and their effect on branding, the relative costs of the various branding options and the effect of branding on project feasibility and valuation. 

We at GSB were pleased to bring together an amazing group of industry participants and enjoyed catching up with many of our industry clients, friends and colleagues.  We extend a special thanks to our program sponsors, PKF Consulting USA, CBRE and Premier Capital Associates, LLC and to all of our panel presenters.  Complete agendas for the Seattle and Portland Forums are attached, and we encourage you to contact any one of our sponsors or presenters with your hospitality questions or business needs. 

If you have questions about the Forums or want more information about attending or speaking, please let me know.  We look forward to seeing everyone again next year, and to seeing how Chris’ predictions hold up in 2012!

Across the country, online travel companies (“OTCs”) are involved in litigation with local officials over the tax on hotel rooms. City officials argue that online travel sites shortchange the cities on their local hotel taxes. The OTCs disagree.

Here’s the crux of the issue: let’s say a guest books a hotel room through an OTC’s website. The traveler booking the room pays an amount to the OTC, part of which goes to the hotel and part of which is kept by the OTC as a facilitation and service fee. The fee attributable to the hotel includes the often severely discounted ("net" or "merchant") room rate agreed upon between the OTC and the hotel, plus the hotel tax owed on that discounted rate. City officials want the hotel tax to be based on the entire ("retail") amount paid by the traveler to the OTC. The OTCs argue that local lodging tax on hotel rooms should be remitted based on the actual amount a hotel receives for a room rather than the total amount that a guest pays the OTC for a room. 

The legal wrangling has now hit closer to home. In mid-February, a group of ten OTCs including major stake-holders Orbitz, Travelocity, Priceline, Hotels.com and Expedia filed a declaratory judgment action in Multnomah County Circuit Court (in Portland, Oregon), asking the judge to order Portland to stop trying to collect the city’s 11.5 percent lodging tax on the total amount paid by a guest who books a room online.

It’s not just chump change. The City of Portland estimates that the amount in back taxes owed under its argument is $5 million to $8 million (less its attorney fees), with future revenues of $750,000 to $1 million per year. In December, city officials sent letters to the targeted OTCs, putting them on notice that the City was going to initiate collection actions for “failure to properly collect and remit transient lodging taxes.” In response, the OTCs filed their declaratory action.

As in other cities, the OTCs have taken the position that they have followed the laws and that the City is trying to mischaracterize OTCs as hotel “operators” under the city ordinance (if they are operators, then the tax applies). This legal argument has been made across the country in numerous courts, and the vast majority of rulings have gone in favor of the OTCs. Most recently, high courts in Kentucky, Tennessee and Pennsylvania have all affirmed that local jurisdictions cannot impose taxes on OTCs for their reservation services under the existing hotel tax ordinances. In other words, the City of Portland will have to buck the national trend to prevail in litigation.

Should Portland be able to collect from the OTCs, the money (after paying attorney fees) would be funneled towards core services including police and parks, which in turn would bolster Portland’s tourism efforts. Tourism promotional organizations have therefore sided with the City of Portland and want to see that hotel taxes be paid on the full retail price the guest pays to the OTC for the room. 

We are following the litigation with interest and will keep you updated on any developments.  The outcome of this litigation and the many other cases like it will not only affect local jurisdictions’ tax coffers, but may also have a significant impact on the future tax obligations of hotels in these jurisdictions.  If you would like more information or have any questions as to how this litigation may impact you, please contact me or Greg.

Rooftop leasing to telecommunications companies can be an attractive way for a hotel owner or operator to increase revenues. Rents can range from $1,000 to $10,000 a month based on the strength of the location, and capital outlays for the owner are often minimal because the telecommunication company usually provides the necessary equipment. Ashok Kumar notes these and other benefits in his article, “Wireless is Going Through the Roof – Can Your Hotel Make Money on it?”

Before entering into a rooftop telecommunications lease, however, one should consider some of the traps and pitfalls that are often associated with telecommunications company lease forms. Below are a few tips for an owner or operator’s consideration when evaluating a rooftop lease.

Lease Term. A typical form telecommunications company rooftop lease will provide for an initial term of 5 years and will include at least four more 5-year options under the control of the tenant. Telecommunications providers expect to be in a particular rooftop location for at least 25 years. That is a long commitment. In an interesting twist, form leases often also provide that a tenant can terminate the lease on fairly short notice for any reason. So while the owner is committed for decades, the tenant often seeks the ability to bail-out with a few months notice. 

Interest in the Land.  In most cases, telecommunications companies expect their rooftop leases to be financeable. As such, they often require recording of a Memorandum of Lease against title to the real property on which the hotel is located and sometimes request that the owner procure a Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) from the owner’s lender. An SNDA is not necessarily easy to obtain and the request often comes as an unwelcome surprise to the property owner. If done improperly, these documents may also encumber more of the property than is intended as the tenant’s premises.   

Rent.  The initial rent usually looks good but over the course of several decades an above average rent in today’s dollars will quickly give way to inflation. The rooftop lease should include periodic escalations at the greater of a fixed increase or the applicable CPI increase.

Interference.  Rooftop telecommunications leases can interfere with a hotel’s operations in many ways. If the equipment is visible from the ground, there may be aesthetic interference. If the initial installation is noisy and messy it may interfere with the guest experience. And regardless of compliance with FCC rules, there is the real possibility that the tenant’s signal will interfere with signals from equipment or systems owned by the hotel or other rooftop tenants. 

A good rooftop lease will address each of these pitfalls and will tailor the lease to fit the specific property. Please consider a formal review of the entire rooftop agreement before sealing the deal.

If you have any questions prior to entering into an agreement for a rooftop lease or license please feel free to contact Jennifer, Ryan, or Greg directly.

Two major changes are on the horizon for Oregon diners and restaurateurs—one may affect diners’ waistlines while the other will force purveyors to fess up to potentially hazardous ingredients they serve.

Way back in 2009, Oregon’s Legislature passed the Menu Labeling Act , one of the country’s toughest menu labeling laws, requiring restaurants with 15 or more locations in the state to post the calorie count for every meal it serves. But before the laws could take effect, the federal government passed its own menu labeling law thereby preempting Oregon’s Menu Labeling Act. Section 4205 of the Affordable Care Act, signed into law in March 2010, set new federal requirements for nutrition labeling of foods sold at certain chain restaurants and similar retail food establishments. Until the federal law takes effect (the FDA is expected to finalize the rules summer 2012) —Oregon won’t know whether it has to revisit its own law or rule-making process. And diners won’t know just how many calories are in that bleu cheese bacon burger.

Speaking of burgers, that medium-rare beauty will soon come with a side of warnings thanks to one of the many proposed changes to Oregon’s Food Code and Food Sanitation Rules.  Due to a loophole in the current Food Code, Oregon restaurants are not required to notify consumers that certain menu items may contain raw or undercooked ingredients.

This will all change when the new Code takes effect July 1, 2012.

With the new Food Code comes the requirement that all “facilities” that serve food must give a “Consumer Advisory” regarding “raw or undercooked animal products” served to patrons. The federal definition of “facilities”—likely to be adopted in Oregon—includes not only traditional restaurants, but also carry-outs, and quick service operations among others. (At this stage, it is unclear what effect the law will have on Portland’s renowned food carts.)

Nevertheless, when these proposed changes do take effect, restaurants, supermarkets, and other food purveyors will face significant adjustments in their day-to-day operations and will be exposed to new liabilities.

Preparing for the new warnings under the code requires two steps: a Disclosure and Reminder. This is similar to the process in Washington as explained in our previous post.

The Disclosure

The Disclosure is a written statement that identifies the animal foods which are (or can be ordered) raw.  This takes the form of a description (Oysters on the half-shell “raw oysters”) or an * with a footnote indicating that the items are served raw or undercooked or contain such ingredients (Caesar salad contains raw egg yolks, i.e.).

The Reminder

The Reminder is a written statement that identifies the health risk associated with consuming such foods and requires an * to a footnote that has a specific warning:  (i.e. “Consuming raw or undercooked meats, poultry, seafood, shellfish or eggs may increase your risk of food borne illness.”)

These writings can appear on menus, placards, table tents or “other effective written means.” Importantly, the consumer advisory must be in the same language used for the menu items and at least 11 point font on menus or table tents.

As a business that serves food, these new regulations may initially appear to be a burden with the cost of changing menus and training staff to answer consumers’ questions. But these laws also will help outline a business’s liability towards its customers. Complying with these new laws makes it far more difficult for a patron to effectively sue an establishment. It’s important to note the new Food Code will not cover all possible claims against food served in an establishment—restaurateurs should still consult their lawyers to decide whether additional menu warnings are prudent.

Stay tuned!

If you have any questions about Oregon’s current menu labeling requirements, please feel free to contact Greg or me. 

What are the posting requirements?

• The Notice may be downloaded from the Board’s website, but it must be printed to at least 11 inches x 17 inches in size.
• The Notice must be posted in conspicuous places where notices to employees are normally posted.  If employee rules and policies are customarily posted on a company’s intranet or internet site, the notice must also be posted there in full or by a link to the Board’s website where the full text of the notice is located.
• Employers must take steps to ensure the notice is not altered, defaced, or covered with other materials.
• If 20 percent of an employer’s workforce is not proficient in English, and those persons speak the same foreign language, the employer must also post the notice physically (and electronically, if applicable) in that language.  The Board has provided downloadable copies of the Notice in several languages at the above-referenced website, with more to come.

What are the consequences of noncompliance?

• Failure to post the Notice may be treated as an unfair labor practice under the Act.  If the Board finds the employer has failed to post, it will be ordered to cease and desist from the unlawful conduct and to post both the Notice and a remedial notice.  In some cases, additional remedies may be imposed.
• Any employer that threatens or retaliates against an employee for filing charges or testifying at a hearing concerning alleged violations of the posting requirements may be found to have committed an unfair labor practice.
• Failure to post could also extend the time for employees to file unfair labor practice charges.
• A willful failure to post can further be used as evidence of an unlawful motive in an unfair labor practice case under the Act.  

Who must comply?

• All employers who fall under the Board’s jurisdiction must comply.  The Board’s jurisdiction is very broad, and it is hard to imagine an employer in the hospitality industry that would not come under its purview. 
• There are some employers that are specifically excluded from the requirement, but none are likely to apply to hospitality industry employers.
• Federal contractors may comply with the new rule by posting notices to employees as required under the Department of Labor’s similar notice-posting rule found in 29 CFR part 471.

Recommendations:

• Make sure to post the new notice no later than April 30, 2012.
• Provide training to your supervisors on how to respond appropriately to questions from employees about unions and union organizing activities.

If you have any questions, please contact us. 

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.

Some additional observations from the two days’ meetings:

• The much publicized industry recovery is definitely a regional or local recovery being led by both coasts of the United States and the top 25 markets.  Despite record level demand in 2011 (over 1 billion room nights sold), many markets in the Midwest, South and other regions continue to suffer.  
   
• A number of the owners and operators I spoke with felt that the 2012 forecasts presented by PKF and STR at the conference the day before were rather conservative.  Several owners and operators (with properties in multiple markets) indicated that they anticipated exceeding forecasted REVPAR increases. 
   
• Debt continues to be a mystery for many.  Those I met with represented both ends of the availability spectrum with debt being either impossible to obtain or readily available.  Construction financing seems to be returning on a limited basis for quality developers in quality markets.  One national developer I spoke with indicated that construction financing was becoming easier to obtain through national and regional lenders at approximately 65% LTC with limited recourse.
   
• The much publicized refocus on enforcement of brand standards by the leading franchise companies appears to be limited to top tier franchisors only.  Second tier franchise companies may be increasingly willing to waive or postpone standards requirements to maintain or grow needed distribution.
   
• Nearly everyone believes that lenders and special servicers will grow increasingly impatient with nonperforming loans and take needed steps to bring those properties to market over the next year.
   
• The Northwest continues to be an area of interest for lenders, investors and operators.  All but one of the investors featured as part of the ALIS Talks Money segment (including Aimbridge Hospitality, Apple REIT Companies, Carey Watermark Investors, Felcor Lodging Trust, HEI Hotels & Resorts, Kimpton, Noble Investment Group and Thayer Lodging Group) identified the Northwest as a prime target for 2012.
   
• Unions were surprisingly active this year.  At least two developers I spoke with mentioned that they had been approached by union representatives at the conference to discuss the developers’ design review and staffing plans for their new hotels.
   
• As you might imagine, a great deal of discussion surrounded the recent launch of Room Key (see my colleague Ruth Walter’s recent post on the Room Key launch) and its effects on the current distribution landscape. One of the more interesting panel discussions occurred when Michael Shannon, managing director of KSL Capital Partners, questioned whether Room Key would succeed. Michael’s co-panelists, Richard Solomons, CEO of Intercontinental Hotels Group (one of the website’s founding partners) and Steve Joyce, President and CEO of Choice Hotels (also a founding partner of Room Key) strongly disagreed. Only time will tell whether this new travel search platform receives the acceptance necessary to make it a long-standing player in the on-line travel distribution landscape.

Finally, for those of you that were not at ALIS and are interested in seeing PKF’s 2012 national forecast, I’ve attached a complete copy of Mark Woodworth’s presentation here.

I look forward to seeing everyone at next year’s conference in January 2013.