In the Lap of Luxury: Discussing How to Navigate Hotel Deals at Bisnow’s April 18 Event
New York City has everything travelers would want in a destination: a myriad of attractions and landmarks as well as the allure of seemingly endless activities and food options.
For many luxury hotels in the city, ensuring that travelers have an exceptional stay also means going the extra mile with best-in-class amenities and experiences. This can entail partnering with high-end restaurant brands, exclusive members' clubs or incorporating state-of-the-art technology to help meet guests’ needs.
As hotel owners begin making changes within their buildings to accommodate these offerings, they should consider seeking the services of a legal hospitality team to put the necessary agreements in place to safeguard against potential complications that could arise in the future.
The Blank Rome Hospitality Practice has extensive experience negotiating various contracts, including those related to third-party restaurant operators within hotels. Christy L. Reuter, a partner at Blank Rome and chair of the firm’s Hospitality Practice, said that involving a legal expert from the early stages of the business discussions can greatly assist clients in navigating their potential legal and financial challenges.
“We can help create a game plan and map out all of the different pieces of the deal based on whether the hotel owner is building a new development or closing down and renovating an existing asset,” she said. “We’re not just wearing a legal hat, but we’re also wearing a business hat to try and help our clients navigate the best way forward.”
Hotel owners and restaurant operators can learn more about the issues that come with deal-making and hotel development, as well as creative ways to position themselves against competitors, by attending Bisnow’s New York Hotel and Hospitality Event on April 18 at Venue 42 by Convene. Reuter will moderate the panel titled Enhancing Luxury Hospitality Assets Through Brands, Retail and Design, which will cover how hotels can stay competitive and position their assets for long-term success.
In a conversation with Bisnow, Reuter discussed how hotel owners can embrace strategic partnerships, how Blank Rome helps clients during each stage of deal-making and what owners should consider when developing their hotels.
Bisnow: What are some notable trends in New York’s luxury hotel market?
Reuter: To stay on top, hotels are embracing both innovation and strategic partnerships. While New York City itself is always going to be a draw for travelers, hotels are focusing on creating a unique experience for their guests.
New York hotels have been seeking partnerships with private membership clubs that are accessible for private members or hotel guests, experienced restaurant operators and luxury retail brands. Many of these hotels are lavish and already have great amenities, but they’re stepping it up a notch by creating unique experiences, such as access to exclusive events or showcasing the very best of New York City through uniquely designed packages.
Hotels often seek to partner with luxury brands in the fashion, retail or restaurant sectors, and create an upscale touch through exclusive access and amenities that will set them apart from their competitors.
Luxury hotels in New York are also adopting both sustainability and health and wellness initiatives to accentuate the hotel experience so that travelers are inclined toward longer stays. Hotels have more to gain by reaching travelers who are staying for longer periods of time in larger spaces, such as residential-style accommodations.
Hotels are also integrating more technology and focusing on personalizing services for the hotel guest through artificial intelligence and the use of data analytics.
Bisnow: How do lawyers assist with these partnerships?
Reuter: In New York, private members’ clubs are treated differently in terms of liquor licensing. Third-party restaurant operators in hotels typically enter into management agreements versus a lease, although leases are also still being done. Retail partnerships are solidified in the form of license agreements or leases. Owners and operators alike need lawyers with significant experience in how to structure these particular deals and drafting the relevant agreements that are needed in these transactions.
Bisnow: What considerations do NYC hotel owners have to keep in mind when making changes and updating their assets? How can Blank Rome help?
Reuter: There are considerations within New York City and New York State, including zoning and land use laws, environmental considerations, building codes, permitting and licensing requirements.
Hotel owners need to look at all those aspects when planning for any challenges ahead. The hotel owners also have lenders and investors driving decisions, which often require adherence to strict construction timelines. Blank Rome helps its clients navigate through these pre-construction and development issues as well as handling the purchase, sale and financing of assets.
Data compliance is also a hot-button issue in the hospitality industry, particularly in hotels because there is so much potential liability. Blank Rome has a deep bench in its privacy, security and data protection group. As hotels continue to upgrade technology and their reservation systems, it is critical to ensure all areas are in compliance with the myriad of complex laws that govern data, privacy, websites and other technology, including Americans with Disabilities Act compliance.
Blank Rome brings in a team of highly skilled lawyers from different departments to collaborate on these nuanced issues and develop a strategy to achieve our clients’ business goals. For example, most hospitality transactions also touch legal issues concerning tax and regulatory matters, intellectual property, risk management and insurance. Our team also negotiates contracts related to operational matters, including contracts with vendors and setting up employment manuals and related employee onboarding materials. While these legal issues may or may not be the primary driver of the particular deal, they are equally important, and our team is able to cover all of them.
Bisnow: What are you looking forward to most about attending the Bisnow event?
Reuter: I always love hearing from the business side of the industry. The panelists each come to the table with a depth of experience and different perspectives. I am just as eager to hear their thoughts on the direction of the hotel and hospitality industry and what each of them are currently working on and planning for in the near future.
"In the Lap of Luxury: Discussing How to Navigate Hotel Deals at Bisnow’s April 18 Event," was published in Bisnow on April 9, 2024.