Meetingmax’s Post

California Drops the Hammer on Hidden Fees "While Congress works on passing the Junk Fee Prevention Act for the whole country, California isn’t waiting around. The Golden State’s “Honest Pricing Law” or “Hidden Fees Statute,” SB 478, goes into effect July 1, making it illegal for businesses to advertise or list a price for goods or services that doesn’t include all mandatory fees or charges. Meeting professionals will appreciate the law’s effect on how hotel pricing is displayed. Sometimes called resort fees, amenity fees, destination fees, urban fees, or facility fees, many hotels currently tack on per-night charges—typically ranging from $25 to $60—that aren’t part of the room rate" Read more: https://ow.ly/wMHI50SqcYa via MeetingsNet #Hospitality #HospitalityIndustry #Hotels #HotelIndustry #HotelOperations #JunkFees #Meetings #MeetingsandEvents

A group of consumers has filed a class action lawsuit against major hotel chains, including Hilton, Four Seasons, Choice, Wyndham, Omni, and Hyatt, along with SAS Institute Inc. and its subsidiary iDeaS Inc. The lawsuit, filed in California federal court, claims these hotels conspired to fix and stabilize room rental prices nationwide through shared pricing algorithms from revenue management systems (RMS). The lawsuit suggests hotels provided iDeaS with non-public pricing and occupancy data, leading to anti-competitive pricing recommendations. However, it's very important to recognize that these RMS are designed to optimize pricing based on market conditions, 𝒏𝒐𝒕 to collude. They adjust prices dynamically in response to competitor rates, creating synchronized price movements. The core issue is that many hotels use similar RMS software, leading to similar pricing strategies. This is not deliberate collusion but a result of the systems’ automated responses to market conditions. The lack of differentiation in these algorithms can give the 𝒊𝒍𝒍𝒖𝒔𝒊𝒐𝒏 of price fixing. While the lawsuit raises important points about potential anti-competitive behavior, it’s essential to understand the technology's role and limitations. As the case progresses, it will be interesting to see how the court navigates the complexities of RMS and their impact on pricing. #HotelIndustry #PriceFixing #RevenueManagement #HotelPricing

Pryor Cashman Hotel + Hospitality and Litigation Partners Todd Soloway and Bryan Mohler and Associate Itai Raz wrote a column in their continuing series for the New York Law Journal discussing how "performance tests" in hotel management agreements—touted as protecting hotel owners by providing a right to terminate if the hotel's performance fails to meet certain financial metrics—often provide less protection than expected. They also explore how recent legal cases highlight the complexities and limitations of these provisions. Read the full article here: https://lnkd.in/eruFsc4m #Hospitality #Hotel #RealEstate #PryorCashman

Hotel operation is not my expertise, so are there any hotel experts? Thoughts? 1. I am generally weary when more layers of local bureaucracy get added to doing business in any given city. What was the problem the hotel license solved? 2. If it is mainly tied to bad actors in the third-party cleaning industry, why not regulate that industry directly instead of the hotel industry to effect change in the cleaning industry? https://lnkd.in/envNvabP

Introducing a thoughtful new measure that will be valuable to your hospitality metric: TRevPar. Read about it below

So, The Wendy's Company will roll out something referenced as surge pricing. Surge pricing occurs when prices fluctuate with supply and demand. The higher the demand, the more the price will increase. The hotel industry uses the same predatory pricing methods referenced as the "tier" system, where hotel rooms will become more expensive when hotel rooms are in high demand. For example, hotels charge 17.6% more for a hotel room when room availability is between 65-75%. However, management might seek to obtain a specific ADR (average daily rate) or Revpar (revenue per available room), which allows them to keep room rates fixed between the bar rate (best available rate) and preferred rate (CAA, government, reward members, etc.) A hotel room with a bar rate of 139.99 can go up from 169.99 to 219.99 (a 36.37% increase) when hotel demand is high. Another predatory practice is when a hotel does not authorize its front desk staff to provide alternative rates (which can be both positive and negative). An alternative rate can help build rapport with a guest who might choose to go elsewhere or sell a room that might otherwise not be taken because the rate has reached too high that customers will find alternatives. Anyway, I am conflicted with surge pricing. While the practice is predatory, profits and revenues are important aspects of a business and help with the allocation of costs. However, each item should provide its own contributions over the availability of something else to stay competitive. #hotels #supplyanddemand #adr #revpar #hospitalityindustry #hospitality #rates #wendys

Earlier this year, STAY Magazine published an article about TRevPAR as an important and often overlooked metric with expertise from Janak Bhawnani entitled 'The science of TrevPAR and the art of Canadian hospitality.' You can read it here: https://lnkd.in/gTUqw-kD STR breaks down the science of TRevPAR further... and it's an informative read!

Another wholistic approach to running hotels. Benchmarking total hotel revenue, not just rooms. Especially as emphasis to capitalize on our meeting space, outlets and ancillary revenue continues.

🚨Very important information if you book #Hotels or #Meetings and events in #NewYork. New Legislation may lead to rising #rates and possibly the closing of some Hotels. Whichever side you are on, What can you do about it as a #Meetingprof? 👉 If you know you are going to have programs in NYC, try to source and contract them as soon as possible to lock in the rates from any increase. Make sure to identify and lock in any additional possible charges/fees as well. Be flexible with your dates and make sure your force majeure clause is solid in case the hotel can no longer accommodate you. What are your thoughts? 👇 #meetingbroker Meetings Made Easy | Meetings and Events New York City Tourism + Conventions #hospitalityindustry #meetingsandevents #Meetingprofs https://lnkd.in/eJFFwvyX

It has been said that the most heavily negotiated hotel management agreements are often the most successful owner / operator relationships moving forward - with both parties engaging with the drafting and fully understanding the terms prior to signature. This article, written with Ben Longworth and Henrietta Richards, identifies the common areas for dispute in hotel management agreements - the same key areas to laser in on when putting these sorts of contracts in place.