Palm Beach, FL — Hospitality Funding, Inc. arranged a construction loan for the development of a new Cambria hotel & suites in Napa, Calif. Choice Hotels International, Inc. (NYSE: CHH), one of the world’s largest hotel companies, signed an agreement with franchise partner Stratus Development Partners, LLC on the ground up development expected to open in 2019.

When assessing the transaction, Hospitality Funding considered the following:

• The four-story, 90-room Cambria property will be located at 320 Soscol Avenue and the main thoroughfare into downtown Napa, the Silverado Trail and Napa Valley.
   
• The Cambria Hotel Napa is in the heart of California’s wine country and one of the premier winegrowing and producing regions in the world, with immediate access the region’s top attractions, like the Napa Wine Train, downtown Napa, Oxbow Public Market and the Silverado Trail.
   
• The region is home to more than 80,000 acres of vineyards, 400 wineries, acclaimed Michelin-rated restaurants, year-round festivals and many popular activities including hiking, hot-air ballooning, horseback riding, cycling and golfing.
   
• For business travelers, this Cambria property is near Napa’s top employers, including Napa State Hospital, Universal Protection Services and Napa Valley College. The property is also just a short trip from San Francisco and Silicon Valley with convenient highway access and close proximity to three major international airports.
   

Of the company’s recent success, Hospitality Funding’s Chairman Scott Silver said, “Choice Hotels, Stratus Development, and California’s Napa Valley is a winning combination. The new hotel is managed by a strong leadership team who made the right choice on location, construction, and design. We couldn’t be more excited to have arranged this ground up development.”

Theme: The Bar is So Low-The Unfortunate & Fortunate Realities of Memorable Service

The Woodlands (Houston), Texas, July 2017 … Alex Cabañas, chief executive officer of BENCHMARK®, a global hospitality company, joined respected leaders and innovators from the hospitality industry around the world in TEDx talks at TEDxWilmingtonSalon last month in Wilmington, Delaware.  Cabañas’ talk theme was “The Bar is So Low - The Unfortunate and Fortunate Realities of Memorable Service”.  His TEDx Talk video, which highlighted customer service challenges and extraordinary customer service opportunities, has just been released on YouTube and is provided here.

In addition to Mr. Cabañas, speakers included Gerard Inzerillo, CEO of Forbes Travel Guide, Bill Walshe, CEO of the Viceroy Hotel Group, Mark Harmon, founder of Auberge Resorts Collection, Bashar Wali, president of Provenance Hotels, Gerard Greene, founder and CEO of Society, Joe Diaz, co-founder of AFAR, and Michael Keriakos, founder and CEO of Curacity.com.  The Independent Lodging Congress partnered with TEDxWilmington to produce the event.

Alex Cabañas TEDxWilmington talk link:  https://www.youtube.com/watch?v=yuuk3pStM24 

By Brian Holstein

Coke or Pepsi?  Stripes or Solids?  Apple or Android?  Ohhh, the agonizing decisions we humans are forced to make on a daily basis!  What if I told you that choosing between a fixed-rate loan and a floating-rate loan could make or break an otherwise successful real estate investment?  Given how often this topic arises and how long the deliberation can last, I will guess that most real estate professionals reading this article would agree with the above statement.  Below is a primer on the difference between fixed-rate loans and floating-rate loans and the pros and cons of each option.

Interest Rates

Fixed-rate loans typically carry a lower interest rate than their floating-rate counterparts.  The general reasoning is that floating-rate loans tend to be secured by riskier assets as they are the main tool for financing “value-add” transitional real estate projects.  They also are usually higher in leverage by 5-10 percentage points.  There are, of course, always exceptions to this rule.  Some borrowers prefer the prepayment flexibility of floating rate loans and will take on the associated interest rate risk to keep their stabilized real estate investments as liquid as possible and eliminate the potential for large amounts of “trapped equity” that can accumulate over a 5 or 10 year period.  A lower leverage floating-rate loan on a stabilized asset can easily carry a lower interest rate than a fixed-rate loan of similar profile, but given how historically low interest rates are at the moment, most borrowers will still opt for a fixed-rate loan in order to lock in current rates for a longer period of time.  In a higher interest rate environment, the opposite tends to be true.

Leverage

All this being equal, floating-rate lenders offer higher leverage loans than fixed-rate lenders.  The reason floating-rate loans are characteristically available at higher leverage levels than permanent, fixed-rate loans is the value-add nature of the real estate securing the loan.  Projected “exit” LTV is a major focus for floating-rate lenders and the greater the value-add story, the easier it is to push the leverage without inviting a maturity default.  The exception to this rule is the case of fixed-rate “stretch seniors” and fixed-rate loans topped off with mezzanine loans.  Fixed-rate stretch seniors and mezzanine loans can certainly be used to capitalize repositions, but often times they are used simply because they are readily available and almost always cheaper than equity.

Term

Most fixed-rate loans have a term of 5, 7 or 10 years.  Floating-rate loans are shorter in duration, offering a 2 or 3 year initial term and extension options that take the final maturity out to 5 years.  

Amortization

Floating-rate loans tend to carry a higher interest rate, but make up for that by requiring interest-only payments, although sometimes the extension options will trigger minimal amortization.  Fixed-rate hotel loans usually amortize over a 25 or 30 year schedule, with partial interest-only available on reasonable leverage loans and full-term interest-only available on low leverage loans.  Amortization is a deleveraging tool that is unnecessary for most floating-rate loans as most such loans finance value-add projects that deleverage through the execution of a repositioning strategy.  Exactly how much of a benefit is interest-only to your investment returns?  Assuming a 4.50% interest rate and 70% loan-to-cost, interest-only will boost your annual return on equity by approximately 5.1% compared to the same loan with a 25 year amortization schedule.  The lower the interest rate and higher the leverage, the greater the interest-only benefit will be to your ROE, and vice-versa.  In the end, the effect on your IRR is less significant (1% +/- IRR gain over a 5 year hold) as you are merely using the time value of money to trade greater upfront “cash-on-cash” returns for a larger loan payoff at maturity.

Closing Costs

Floating-rate loans are typically more expensive to close than fixed-rate loans.  Floating-rate lenders carry origination fees that average approximately 1%.  Fixed-rate loans are almost always “par” deals, with no origination fee.  Floating-rate loans usually require the purchase of an interest rate cap at closing, and although relatively inexpensive, this is a cost that is avoided with a fixed-rate loan.

Prepayment Penalties

The typical floating-rate loan is freely prepayable after 18 months, subject only to a small exit fee which is waived if you convert to a fixed-rate loan with the same lender.  Fixed-rate loans tend to have prepayment penalties in the form of yield maintenance, defeasance or declining points.  Those choosing a fixed-rate option should be prepared to hold their investment for a period that approximates the term of their loan or have the ability to have a buyer assume their loan in the case of a sale to avoid a prepayment penalty.  It should be noted that in a rising interest rate environment, a longer loan term coupled with assumability can actually add or at least retain value that would otherwise be diminished by rising cap rates.   

Closing Timeline

This one is a toss-up.  A good lender can close any loan in just under 30 days if necessary.  Forty-five days is more typical if there is no need for a quicker close.  That said, I find that the quicker the close, the cheaper the legal bill and the less opportunity for market disruption and deal fatigue.        

Conclusion

Generally speaking, value-add projects are best financed with floating-rate loans and stabilized properties are best financed with fixed-rate loans.  As discussed herein, there are plenty of exceptions to this rule.  Given how low interest rates are currently, and the likelihood that it will not last forever, for those with a long-term investment horizon that are not opposed to trapping equity via value creation (a great problem to have), it sometimes makes sense to squeeze a value-add bridge loan into a long-term, permanent fixed-rate loan.  This has the added benefit of reduced closing costs and greater interest rate clarity.  Alternatively, if you are purchasing or refinancing a stabilized property but want to remain nimble and free from prepayment penalties dictating your exit, it may make sense to go the floating-rate route.  If you like the floating-rate flexibility, but have a hawkish view on rates, interest rate risk can be managed by purchasing an artificially low interest rate cap at closing.  Although the closing costs can be slightly higher, a floating-rate loan may also offer higher leverage and no required amortization, therefore offering greater leveraged return potential. 

With the exception of non-cash flowing, deep repositionings which would not qualify for a permanent fixed-rate loan, a good broker can provide you with both fixed and floating-rate options and help you make an informed decision while taking into account your risk profile and investment goals.  As they say, “you’re only as good as your options!”

St. John, U.S.V.I. (July 20, 2017) - Caneel Bay Resort on St. John, U.S.V.I., announces the appointment of Kyle Woodruff as Executive Chef. In his new role, and second turn at the historic resort, Woodruff will oversee all dining operations, menu creation and procurement of the freshest, most flavorful ingredients for Turtle Bay Estate House, Caneel Beach Terrace, Caneel Beach Bar & Grill and Cannella. He also manages private dining and room service, as well as banqueting for special events and weddings.

Caneel Bay Resort, Managing Director, Nikolay Hotze: "We are excited to have Chef Woodruff join the Caneel Bay Resort team. We look forward to him leading the culinary department using his expertise in coastal cuisine and working with the best ingredients for our guests' enjoyment. Chef Woodruff will be essential to the relaunch of our fine dining restaurant, The Turtle Bay Estate House, in November." 

Chef Woodruff brings extensive culinary knowledge and skills to Caneel Bay Resort. He is enthusiastic about quality and flavorful dishes, always with the freshest produce. "I am super excited to be back at Caneel Bay Resort & look forward to developing a creative and consistent experience, as well as something new for the large volume of repeat Caneel Bay guests. Three words I am in keeping in-mind when developing a new concept for the re-launch of the Turtle Bay Estate House concept are: fresh, island and vibrant. We are working with local farmers and providers to source as many local ingredients as possible to serve quality dishes and a high level of overall dining experience." While serving traditional flavors creating vibrant and exciting dishes, Chef Woodruff seeks opportunities to infuse menus with Caribbean cooking techniques, offering locals and resort guests a true taste of the region.

Following graduation from New Kent High School in Virginia, Woodruff launched his career working at restaurants in Colonial Williamsburg. Woodruff previously worked at Caneel Bay Resort back in 2008 for a Caribbean Externship. More recently, Woodruff worked closely with Chef Hans Schadler, who was also Caneel Bay Resort's executive chef from 1968-1974 and worked closely with Laurance Rockefeller. After Chef Woodruff's experience with Chef Hans Schadler, he went on to open two restaurants in Virginia including River Inn Seafood and Grill in Norfolk and Waypoint Seafood and Grill in Williamsburg. In 2011, at the age of 28, he was honored as "Chef of the Year" by ACF Virginia Chefs Association.

When not in the kitchen or chatting with guests at tableside, Woodruff, his wife, Emily and their brown Labrador Retriever Marley enjoy exploring the beauty of St. John.

For more information on Caneel Bay Resort or to make reservations, please visit www.caneelbay.com.

Michael Orrison | GCommerce Solutions | Search Marketing Manager

In March of 2016, The Lenox Hotel launched a new website. After the launch, representatives from the property worked with GCommerce to identify specific areas of their website that could be improved. The Lenox Hotel is a part of our Premium Insights Program, which provides additional consulting and analysis of traffic and campaign data for websites. Utilizing our resources from Premium Insights, we were able to work along with The Lenox Hotel to identify opportunities for the packages and specials offered through the website. On their previous site, they had a special offers page with some basic deals and packages that they offered for their guests. As the new site did not have anything similar, we decided to look into this further. After analysis of traffic behavior from the old website in comparison to the new one, it was determined that it would be worthwhile to build a new page to detail specific packages available for guests at The Lenox Hotel.

As you can see above, the new website packages page featured more photos around the specific packages along with unique and descriptive content for each with a more clear call to action for the user. We also worked with the property to develop a schedule for specific seasonal offerings (fireplace packages in the winter, aquarium in the spring/fall, etc.) to be displayed on this packages page. We then attempted to drive traffic around the specials that were being displayed through targeted advertising. We were able to further qualify the audiences we were targeting for these specials advertisements with Remarketing Lists for Search Ads and Remarketing for Display Ads with ad verbiage specific to the individual packages being displayed at that time. This allowed us to target our ads to the individuals that were most likely to book a package through the website with ad verbiage around the content they would be viewing.

Our initial results show that efforts to boost package exposure on the website paid off in a big way. The table below shows behavioral statistics for Sessions that interacted with each of these respective pages. Overall, we didn’t have too many more sessions interact with the page on the new site, an increase of just 16%. However, we did see a 285% increase in transactions, resulting in a 206% increase in revenue. The slight increase in traffic along with the huge increase in conversion means the eCommerce conversion rate increased by over 230%. We also saw the average session duration increase by nearly half a minute.

In conclusion, our results show that adding additional imagery and content to The Lenox Hotel’s new packages page along with specifically targeted remarketing advertisements to the most qualified audiences resulted in drastic increases in the eCommerce conversion rate, transactions, and revenue for users that interacted with these pages. We look forward to continuing our partnership with The Lenox Hotel to further identify areas of improvement for their website and business.

Interested in learning more about our Premium Insights offering? Great! Let’s chat about how to take advantage of your analytic data.

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by Abdulrahman Jogbojogbo

The premise of a chatbot is simple - automate communication and act as a window to access a service.

In the hospitality industry, one which is built around making the customer alpha, communication and information transactions must be smart, swift, insightful and analysable. Chatbots are hence the perfect tool for this type of communication and service provision. They live in messaging apps where today’s internet user spends a significant portion of his time, they are also cheap in the long run and can provide deep insights into customer preferences that can greatly improve offerings for the the customer, the alpha.

In 2017, the key players are still trying to figure out how to build the perfect chatbot - smart, capable of understanding complex semantics, and conversing with the customer as an experienced service rep would. Today’s chatbots, limited as they are by the available underlying technology have been deployed by several players in the hospitality industry - flight providers, hotels and more.

Hotels.ng, a Nigerian OTA looks at existing and projected applications of chatbots and attempts to estimate the net effect that they might have on the entire industry in years to come.

Bookings and reservations

Brands that require that bookings be made - flights, hotels, tour guides and more are already rolling out functional chatbots. Using these bots is convenient, simple and gives an air of chatting with a friend. Hipmunk recently upgraded their chatbot to allow for group planning and chats on their Facebook Messanger based platform. It’s easy to see how this can be adopted for OTAs providing group tours.

Expedia and Kayak are some other early adopters of chatbots for the purpose of making reservations.

Learn user preferences

By silently sitting in the background, and potentially collecting information such as correlation between geolocation and time versus brand-specific actions carried out, smart deductions can be made as to the user’s behavioural tendencies and preferences. Also, past responses, questions and queries that the customer made can be automatically processed to give actionable insights into the customer. Brands can as a result offer personalised and customised services to the customer and increase the chances of delighting him and spending less to acquire each dollar from him than they normally would.

Customers can also be retargeted in the future with higher precisions. Brands are able to engineer a greater correlation between the time of the customer’s need, and the content and timing of chats sent with a marketing intent.

Upselling to clients

With chatbots, brands can more easily induce customers to make more expensive purchases, upgrades, and add-ons thereby increasing the chances of squeezing more value out of the client without appearing over enthusiastic. Products and services can be upsold or cross-sold through casual suggestions to the client.

Top-of-mind awareness (TOMA)

The modern day internet user spends more time on messaging apps than they do on social media. In the fight for users’ eyeballs, chatbots which mostly live in messaging apps therefore provide very great opportunities for subtle top-of-mind awareness campaigns. TOMA is defined as awareness campaigns aimed at making a brand the first a customer thinks of when asked an unprompted question about a brand’s category.

Cost effective customer support

Eventually, AI driven chatbots become smarter through learning. When they become sufficiently smart and are able to handle complex queries, brands spend less on the supervision of chats, customer support, and can dedicate saved funds into other segments of the brand.

Challenges & Controversies

As with most novel technologies, chatbots too have controversies and challenges tied to their successful implementation. A few pressing ones are discussed below:

• Threat to existing jobs: As in all forms of automation, job shifts occur and jobs designing and managing the automation always displace the jobs that previously ran the processes. Markets will always demand for more reliable, cost effective, and faster processes making these threats to jobs an occurrence that can be managed but not eliminated.
   
• Sharecropping: To tap into what makes chatbots powerful for brands - large audiences, they have to be sharecropped on platforms that host the most people thereby expanding the potential reach and influence of the brand. Facebook, Wechat, and Amazon Echo are a few popular platforms that host numerous chatbots. They are popular because people want to interact with brands on platforms where they already interact with friends. Understandably, this hands over reins of control to the messaging and voice AI giants, but it’s a reasonable compromise that should be made.
   
• Privacy concerns: Chatbots have the potential to offer so much personalised information and services that they might come off as intrusive. Care must therefore be made while designing them to handle information transactions at levels of personalisation that are at par with the target audience’s temperament toward AI. Helpful can easily become creepy.
   
• High cost of build: Chatbots can be expensive to build. In the long run however, they are almost always smart investments as they bring down operational costs, open up new opportunities for brands and help generate more revenue.
   
• Lack of empathy: Chatbots can come off as stiff or robotic. While this is not a problem for many, a few people are put off by it. Most primitive chatbots work like a search engine that search for some keywords that then trigger predetermined responses. AI driven chatbots are however more capable of handling more complex queries and conversing as a human would.
   

Conclusion

Chatbots are simple, ubiquitous, and highly effective. AI driven chatbots also become better and smarter with use so while the wide adoption by hospitality brands will create job shifts, it will also create new opportunities that will allow for better personalisation of experiences for the customer.

In one line, the hospitality industry will be benefit greatly from the adoption of chatbots.

The Set, a collection of hotels which includes Hotel Café Royal in London, Conservatorium in Amsterdam, and the Lutetia in Paris, is pleased to announce the appointment of James Baker as the Director of Sales & Marketing, The Americas. The announcement comes at an exciting time for The Set as the group is preparing to debut the Lutetia, and James’ appointment is an important step towards strengthening the brand’s presence in the Americas, and furthering its position at the forefront of creating the most beautifully composed experiences and environments today.

James brings with him a wealth of experience in the hospitality arena, having worked with international hotels for over 12 years. Most recently, James served as the Global Director of Leisure Sales for Kempinski Hotels, where he was charged with overseeing the travel industry and leisure segment, leading the team in reaching their goals, coordinating multiple U.S. roadshows each year and increasing sales for the hotel group. Prior to his role with Kempinski, James was the Director of Travel Industry Sales for the Peninsula New York where he was responsible for overseeing the domestic travel industry and group business, managing key domestic accounts and increasing overall revenues across personal market segments. He additionally held roles at The Dorchester, Coworth Park & 45 Park Lane, where he was solely responsible for maximizing the hotel’s most important international markets, Brown’s Hotel in London and the Balmoral Hotel in Edinburgh, where he launched his career.

As Director for Sales & Marketing, The Americas, James will develop and implement strategic sales and marketing plans to achieve short and long-term objectives for each individual hotel in the collection. He will open the first US sales office for The Set in New York and build a team over the next 12 months as well as play a key role in the launch of a loyalty program for both guests and partners. His appointment exemplifies The Set’s commitment to growth and to establishing their properties as the modern grand hotels of the time at the most outstanding addresses in vibrant global destinations.

Matthias Kaesweber, VP, Sales and Marketing of The Set comments: “I am thrilled to welcome James to our growing team. His proven expertise and experience will be an invaluable asset as we work to support The Set in the Americas.” 

With an investment of more than US$17 million by Consorcio Hotelero GR5, S.A. de C.V., the hotel is the first property to open in Mexico under the Crowne Plaza Accelerate brand transformation. It is also the first property in Mexico to feature the innovative WorkLife guestroom, designed to offer a perfect mix of comfort, connectivity and flexibility for the modern business traveler. 

Gerardo Murray, Regional Vice President Brands and Marketing, Mexico, Latin America and Caribbean, IHG^® said: “IHG is committed to offering guests the most innovative hospitality experience. The Crowne Plaza Puebla is a prime example of the new concepts in design, service and connectivity that this brand now features. This hotel opening in Mexico represents continued growth for Crowne Plaza throughout Latin America.”

The Crowne Plaza Puebla hotel is located at Blvd. Hermanos Serdán 794, Col. San Jerónimo Caleras, Puebla, close to the Finsa Industrial Park and the CAPU bus station, and 15 minutes away from historical downtown Puebla, the Exhibitor Center and cableway attractions in the Fuertes de Loreto y Guadalupe. 

The Crowne Plaza^® Puebla offers 155 WorkLife guestrooms and suites that feature comfortable queen and king-sized beds, 50" flat screen TVs, a sitting area with a lounge chair and an in-room coffee machine with complimentary coffee. Most of the rooms have a panoramic view of the city. The hotel’s 21 suites are further equipped with full kitchens and one executive suite with a separate meeting area. 

The property has a heated indoor swimming pool, a fitness center, an on-site business center, complimentary parking, meeting rooms with capacity for up to 300 people and three executive boardrooms for up to 12 people each. Guests can enjoy Mexican cuisine with an international twist at the Moncayo restaurant.

With this opening, IHG^® continues its multi-brand portfolio expansion in the State of Puebla to a total number of 1,102 rooms, distributed in seven hotels, including one InterContinental^® hotel, two Holiday Inn® hotels, two Holiday Inn Express^® hotels and one Staybridge Suites^® hotel.

Owned and managed by Consorcio Hotelero GR5, S.A. de C.V., the Crowne Plaza Puebla hotel is franchised by an affiliate of IHG. The Crowne Plaza Hotels & Resorts brand is part of IHG’s diverse family of brands.

IHG announced its $200 million investment in 2016 for the Crowne Plaza^® brand as well as its Crowne Plaza Accelerate Plan last year, and recently launched its "We're All Business, Mostly" campaign. Most recently, some of the brand’s most iconic properties in Mexico, Latin America and the Caribbean announced a series of multi-million dollar renovations.

Crowne Plaza is a full-service hotel brand focused on business travelers as well as meetings and conventions. IHG® has more than 400 Crowne Plaza branded hotels worldwide, 23 of which are located throughout Latin America, with four additional properties in the pipeline. In Mexico, IHG^® has 136 properties and is represented by seven of its 11 brands, including: InterContinental^® Hotels & Resorts, Hotel Indigo^®, Crowne Plaza^® Hotels & Resorts, Holiday Inn^® Hotels & Resorts, Holiday Inn Express^®, Staybridge Suites^® and Candlewood Suites^®. 

IHG^® has hotels in nearly 100 countries, with 225 hotels and 38,133 rooms throughout Mexico, Latin America and the Caribbean. With roots in Latin America, IHG’s first InterContinental^® hotel opened in Belem, Brazil in 1946.

By Jim Butler and the Global Hospitality Group®

Hotel Lawyers | Authors of www.HotelLawBlog.com

24 July 2017

Hotels rely on third-party vendors to help run their properties efficiently, and often must give them access to sensitive guest data. This leaves hotels vulnerable to cyber attacks; they’re only as secure as their vendors are, and may find themselves directly liable for a data breach.  My partner Bob Braun, senior member of JMBM’s Global Hospitality Group® and co-chair of JMBM’s Cybersecurity and Privacy Group, discusses recent hotel cybersecurity breaches and how hotel owners can protect themselves.

Hotel data breaches

It’s not you, it’s your “friends”
by Robert E. Braun

July was another notable month for hotel data breaches – on a single day, several well-known hotel brands and managers, including Four Seasons, Trump Hotels, Hard Rock Hotels & Casinos and Loews Hotels all announced that customer data may have been compromised as a result of a security failure. Each of the incidents is related to Sabre Hospitality Solutions’ credit card data breach in its SynXis hotel-reservations system, which Sabre first announced in a quarterly filing with the Securities and Exchange Commission on May 17. Based on Sabre’s investigation, Sabre announced that the breach was contained to “a limited subset of hotel reservations,” but the incident did allow an unauthorized party to access cardholder names, payment card numbers, card expiration dates, card security codes for some, and, in some cases, guest name, email, phone number and address.

Moreover, the duration of the breach was long quite long. Sabre’s investigation determined that the unauthorized party first obtained access to payment card and other reservation information on August 10, 2016, and the last access to payment card information was on March 9, 2017. The hackers had potential access for seven months.

Hotel owners and consumers are, unfortunately, common victims of security breaches – all of the major hotel brands and managers have been breached, often multiple times. In analyzing the breaches, there is something that is common to almost all incidents: the vulnerability was not with a hotel, its manager or brand, but with a vendor.

Hotels are not alone, of course in relying on vendors. Companies in other high threat industries like finance, retail, and healthcare regularly work with third party vendors, and these third parties commonly have access to their clients’ systems and may share or store clients’ sensitive and highly-valued data. But this Sabre breach (and those of the past several years) shows us that no matter how well-protected a hotel is from a direct cyberattack, its networks and data may still be easily accessed through third parties with weaker cybersecurity protections. In one of the most famous (or infamous) breaches, the 2013 breach of Target, cybercriminals were able to steal the retailer’s sensitive data by accessing its systems with credentials stolen from a vendor responsible for Target’s HVAC systems. Similarly, in 2017, thieves stole Netflix’s “Orange is the New Black” episodes from an audio post-production company, not from Netflix itself.

The typical hotel management or franchise agreement requires the owner to abide by or adopt data security policies and procedures in conformance with the brand’s or manager’s standards and to comply with data security laws and regulations. As a result, even where an incident is the result of the manager’s or brand’s failure to adopt or maintain appropriate standards, the owner will likely be directly liable for a breach, and may be obligated to indemnify the brand or manager for any claims arising from a breach.

Hotel owners are at a particular disadvantage compared to other companies, since hotel brands and mangers typically select vendors, like Sabre, for multiple properties and often for an entire brand. Hotel owners may have little, if any say, in the vendor, the terms of engagement, and the impact of a breach. However, under the typical hotel management or franchise agreement, the hotel owner is required to bear the cost of a breach, whether in terms of direct costs (including notifying potential victims and the increased cost of cyberliability insurance) and the indirect cost of diminished trust in the hotel.

While managers and brands are reluctant to cede authority to owners, owners should take active steps to protect themselves and their properties:

1. Review data security policies and procedures critically, and require changes where the policies don’t reflect current laws and regulations and, most importantly, current cyber-threats. Training programs should include a strong cybersecurity and monitoring for implementation and effectiveness. Most incidents can be traced to human error or malicious intent, not solely to technical systems.

2. Require brands and managers to impose security requirements on vendors and to ensure that vendors take responsibility for the cost of a breach.

3. Analyze cybersecurity policies to confirm that they adequately cover direct and third party costs of breaches. Since insurance is often one area where a hotel owner has greater control, it can be used as a lever to create a more secure environment.

4. Require that brands and managers develop and test effective backup systems; while theft of data is expensive and embarrassing, newer strains of ransomware, wiperware, and fileless malware have the ability to destroy business records, and only a functional backup system can protect the hotel and its business.

JMBM’s Global Hospitality Group® works with the JMBM Cybersecurity and Privacy Group to help clients analyze risk and develop response plans and other procedures to reduce vulnerability to data breaches.  For more information, contact Bob Braun at rbraun@jmbm.com.

Other information about cybersecurity issues

If this article was of interest, you may also wish to read other articles on “Data Technology, Privacy & Security,” which include the following articles:

Hotel Cybersecurity: What can happen when hackers strike?

Hotel Cybersecurity: Closing the doors before the horses leave the barn

What every hotel owner (and operator) needs to know about “data security” after the Wyndham case

What the Target data security breaches mean for hoteliers

Cyber Security Alert: How to protect your proprietary information from employees

Hotel Lawyer Privacy Alert: Do your hotel mobile apps comply with new interpretations of online privacy rules?

Hotel Liability for Guest Information — What you need to know and how to avoid liability.

Losing the expectation of privacy bit by bit, byte by byte.

Dodd-Frank Act presents Hotels with decisions on credit and debit card charges.

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. Please contact us if you would like to discuss any issues or development that affect your hotel interests. We would like to see if our experience might help you create value or avoid unnecessary pitfalls. Who’s your hotel lawyer?

WASHINGTON, DC - July 24, 2017, Chef Walter Staib has been named the recipient of the Historic Hotels of America 2017 Historian of the Year Award. Chef Staib will be honored with this distinguished award on September 28, 2017 at the Historic Hotels Awards of Excellence Ceremony & Gala at The Omni Homestead Resort (1766) in Hot Springs, Virginia.

The Historic Hotels of America Historian of the Year Award is presented to an individual for making a unique contribution in the research and presentation of history and whose work has encouraged a wide discussion and greater understanding and enthusiasm for American History and historic hospitality. 

Chef Walter Staib has been an enthusiastic champion of American History. As author, culinary historian, and acclaimed international chef, his work continues to increase the recognition and celebration of our country’s culinary heritage. Historic Hotels of America is pleased to recognize Chef Staib for his success as a culinary historian, his achievements and contributions to the exceptional culinary experience at numerous legendary historic hotels, and his inspiration as the enthusiastic founder and host of A Taste of History^,©, seen nationwide on Public TV, RLTV, and AMAZON Prime Video. The acclaimed show, A Taste of History^© has won 10 Emmy Awards and has been a creative way for Chef Staib to showcase 18^th century cuisine. His passion and dedication has made a significant contribution bringing America’s history to life through the food and recipes the founders of America enjoyed. Historic Hotels of America recognizes Chef Staib’s extensive work as an exemplary culinary historian, his dedication to preserving and sharing recipes of America’s early cuisine, and the books he has authored: Recipes from the Birthplace of American Cuisine, A Sweet Taste of History, and City Tavern Cookbook. In addition to his contributions in history, Chef Staib has opened more than 650 restaurants worldwide, authored 6 cookbooks, is a James Beard-nominated chef, and is currently the driving force behind Philadelphia’s City Tavern, a recreation of the original 18^th century tavern.

“Chef Walter Staib makes history interesting, fun, and tasty,” said Lawrence Horwitz, Executive Director of Historic Hotels of America and Historic Hotels Worldwide. “We are delighted to recognize Chef Staib for his dedication and contribution to preserving and sharing America’s stories about our nation’s founding fathers and their favorite recipes through his books and A Taste of History.”  

“I may be best known for my work on television with A Taste of History or as a restauranteur at City Tavern, but hotels have been a very big part of my life starting from the very beginning,” said Chef Walter Staib. “As a young man in Germany, I began my tutelage at Hotel Post; a hotel that was built in 1773 and hosted notable names in history such as Napoleon Bonaparte. As my career grew, I was called upon to consult for hospitality projects around the world. I helped design new resorts, all of which I am truly proud, but my dearest memories come from my work with historic hotels, such as the Parker House in Boston or Omni Royal Orleans. When I travel today, I prefer lodging at historic hotels with warmth and a story to tell and that experience cannot be created; it takes true history.”

The 2017 Historic Hotels Awards of Excellence Ceremony and Gala Dinner will be held at The Omni Homestead Resort (1766) in Hot Springs, Virginia on September 28, 2017 at 6 pm. Tickets for the 2017 Awards Ceremony and Gala Dinner are $350 for one seat and $2,800 per table (for 8 seats). To register for the ceremony and gala, please contact Stephanie Calhoun scalhoun@historichotels.org or +1 202 772 8336. To view the video from the Historic Hotels 2016 Awards of Excellence Ceremony and Gala, click here.

Cendyn’s corporate membership with Cloud Security Alliance reinforces commitment to cloud security

Boca Raton, Florida – July 24, 2017 – Cendyn, the leading customer relationship management (CRM) and sales platform in the hospitality industry, has today announced they have joined the Cloud Security Alliance (CSA). This membership with the CSA reinforces Cendyn’s long-standing commitment and heritage with cloud and data security across all its products.

The CSA is a not-for-profit organization with a mission to promote the use of best practices for providing security assurance within Cloud Computing, and to provide education on the uses of Cloud Computing to help secure other forms of computing.

“We pride ourselves on our continued commitment to data and cloud computing security at Cendyn.” said Charles Deyo, CEO & President of Cendyn. “Our clients range from some of the largest groups of hotels in the world, so some of the most bespoke independent, boutique properties, all with different needs for their data. While the data landscape and security needs are continuously changing for every one of our clients, our membership with the CSA is a testament to our dedication them, no matter who or where they are in the world." 

As a member of the Cloud Security Alliance, hoteliers will have assurance that all Cendyn products have the security and credibility required of more than 200 other businesses that demonstrate their dedication to providing secure technology products through this membership.

“Cendyn is a cloud-based organization that puts security and data integrity at the heart of what they do,” said Jim Reavis, co-founder and CEO of the CSA. “With their extensive experience delivering secure data across the globe, for all their clients, we welcome them and look forward to Cendyn sharing their wealth of insights on data security and deliverability with our membership.”

Marriott International, Inc.® (NASDAQ: MAR) today announced the opening of Four Points Houston Intercontinental Airport, the brand’s fifth in the Houston area and tenth in the state. Catering to the needs of today’s everyday traveler, the hotel offers approachable design, stylish comfort and all the brand’s popular extras including a 24-hour fitness center, fast and free Wi-Fi throughout the hotel, and Best Brews & BBQ™.

Managed by Hotel Equities, Four Points Houston Intercontinental Airport offers 123 spacious guest rooms, 2,500 sq. ft. of meeting space, a 24-hour fitness center, business center and fast and free Wi-Fi throughout the hotel. Guests will enjoy full-service dining at the hotel pub and the brand’s iconic Best Brews and BBQ, which serves guests refreshing, curated local beers and seasonal BBQ-style appetizers. Bombshell Blonde by Southern Star is Four Points Houston Intercontinental Airport’s Best Brew.  

Four Points Houston Intercontinental Airport is conveniently located just 3 miles from George Bush Intercontinental Airport (IAH), and close to many shopping and dining options. Nearby are corporate offices of numerous aeronautics, biomedical, and energy companies, including Exxon, Halliburton, GE Oil & Gas, and Schlumberger. Downtown Houston is home to the George R. Brown Convention Center, the world-class Theater District, the Astros’ Minute Maid Park, and the Rockets’ Toyota Center. Guests can also check out the Museum District, the Houston Zoo, the Houston Livestock Show and Rodeo, Wet ’n’ Wild SplashTown, and the Texans at NRG Stadium.

 “Texas has always been an important market for the Four Points brand as its such a tremendous travel hub,” said Callette Nielsen, Vice President & Global Brand Manager of Courtyard, Fairfield, Four Points, and SpringHill Suites. “Four Points Houston Intercontinental Airport will add to that market, providing the everyday traveler with a reliable option near the airport.”

Adam Stacy, General Manager stated, “Our hotel will be the ideal choice for business and leisure travelers in Houston. The team at Four Points Houston IA offers award-winning hospitality backed by operational expertise  and we look forward to welcoming our first guests.”

Four Points has more than 120 hotels in the development pipeline with new hotels strategically located in nearly every corner of the globe.  In 2017, the brand expects to open more than 40 hotels including Four Points Manhattan Midtown West, Four Points Kolasin and Four Points Melbourne Docklands.

Palm Beach, FL —  Hospitality Funding, Inc. arranged funding for the acquisition of the the SpringHill Suites by Marriott Newark Liberty International Airport hotel in Newark, New Jersey. In a joint venture with a China-based investor, Waramaug LS Hotels LLC added the property to their portfolio.

When assessing the deal, Hospitality Funding and Waramaug Hospitality considered the following:

• The property is located adjacent to Newark Liberty International Airport
   
• The property is a 200-room, six-story, all-suite hotel that opened in 2004
   
• The hotel’s amenities include complimentary breakfast, a 24-hour Market, airport shuttle service, an indoor swimming pool, a fitness center, a business center and three event rooms tailored for business and social functions.
   
• The suites feature separate living areas, wet bars with refrigerators, microwaves, and work stations with complimentary high-speed wireless Internet.
   
• In addition to its airport proximity, the hotel is situated near prime shopping and recreational destinations, such as The Mills at Jersey Gardens and the Prudential Center, and within a 30-minute drive of New York City.
   

Of the company’s recent success, Hospitality Funding’s President Steven Fischler said, “This is an excellent add to Waramaug’s portfolio. Not only is it conveniently located in the New York metropolitan-area, but it’s full of amenities ideal for the business and leisure travelers.We are thrilled to have facilitated this transaction between Waramaug and the China-based investor.”

BERGAMO, Italy – July 24, 2017 – Vertical Booking, a recognized leader in global reservation technology, announced today rapid growth in 2017, with the addition of over 588 hotels in the first 6 months of the year, bringing the total to more than 5,000 hotels in 106 countries.

Vertical Booking’s portfolio of products and services provides hoteliers with access to the most innovative technology in the market, allowing them to focus on driving revenue at their hotels.

Our success is based on our ability to deliver cutting-edge technology solutions built to assist hotels in achieving their revenue goals. Our commitment to continually invest in technology, gives us the ability to grow and expand in the global market,” said Alberto Guadalupi, CEO of Vertical Booking Group.

Some of the notable hotels added this year include:

• Pod Times Square in New York City (www.thepodhotel.com)
   
• B&B Hotels (http://www.hotel-bb.com)
   
• BYD Loft in Thailand (http://www.bydlofts.com)
   
• Hood River Hotel (https://hoodriverhotel.com)
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“We’re having another outstanding year,” said Mark Lewis-Brown, CEO/President of Vertical Booking USA. “The response we received in Toronto at the HITEC and ROC conferences from hoteliers on our recent Booking Engine developments confirms we’ll end this year even stronger than ever.  Our new tools allow hotels to stand apart in this very competitive market and make more informed decisions to maximize revenue potential.”

CHARLOTTE, North Carolina – July 25, 2017 – Clear Sky Software, Inc.

Clear Sky Software, Inc. ® announced today the release of Clear Sky HOUSEKEEPING for the hospitality industry.

This new software allows hotels and clubs to track and control their linens, supplies, uniforms and other housekeeping products.  Clear Sky HOUSEKEEPING is offered as a complement to the company’s proven Food and Beverage inventory software and is available immediately for organizations desiring better inventory control of these items.

Clear Sky HOUSEKEEPING supports more efficient ordering and receiving of housekeeping products and an easier transfer of these products to housekeeping staff, room cleaning carts, storage areas, etc.  This system also runs on mobile devices supporting a faster, more efficient way to count housekeeping inventory.  Numerous reports are available by date range, location, vendor, item, invoice and can be exported to multiple file types.  This new system, from Clear Sky Software, eliminates tedious, time-consuming paperwork, manual data entry, and repetitive steps often required to control inventory.

All Clear Sky Software inventory systems represent a turn-key solution to include inventory software, mobile and fixed bar code scanning equipment, and touchscreen kiosk workstations.  Services include installation and data set-up assistance and a choice of on-site or web-based training.  Support includes software maintenance programs, equipment repair programs with loaner equipment, software upgrades and enhancements.  All Clear Sky inventory systems are available as a hosted or on-premise solution.