The Hotel Industry Wasn’t Built for This. Nothing Was.
Summary
In Minneapolis, hotels housing ICE agents faced protests and municipal pressure after the government's Operation Metro Surge targeting immigrants. Franchised hotels, facing contract clauses that allow for termination based on reputational harm, are caught between brand demands and local community actions. This situation highlights potential financial and operational challenges, with rising occupancy hiding underlying complexities such as labor shortages and shifting demand.
Key Insights
- •Franchised hotel properties in the U.S. operate under franchise agreements, with major brands controlling tens of thousands of properties but owning virtually none of them (72% of chain hotels).
- •Minneapolis-St. Paul hotel occupancy for January was up 17% year-over-year, yet this increase masks operational chaos due to protests and labor shortages.
- •The Sunrise Movement organized noise protests, identifying hotels housing ICE agents through an informal network, causing negative reviews and operational disruptions.
Action Items
- ✓Consider establishing clear policies on cooperation with law enforcement, ensuring warrants are required for access to private property.Effort: lowImpact: medium
- ✓Hosts should evaluate how local laws and community relations might impact their operations.Effort: mediumImpact: medium
- ✓Hosts should review their contracts to understand the clauses related to reputational harm and political activities to assess their exposure.Effort: lowImpact: medium
Tools & Resources
- →Hampton Inn Franchise Disclosure Document (FDD): The article mentions the Hampton Inn Franchise Disclosure Document (FDD).
Common Mistakes
- ⚠Hotel owners risk franchise termination by seemingly small actions which could tarnish the brand, according to franchise agreement clauses.
- ⚠Failing to anticipate the impact of local political situations on operations.
More from Regulations & Compliance
Arizona Rep. Bliss's bill regarding short-term rentals has passed, signaling potential changes to the regulatory landscape for hosts in the state. This legislative development could impact operational requirements and potentially the profitability of short-term rental businesses within Arizona. Hosts should stay informed about the specifics to ensure compliance.
Annapolis, MD, is experiencing a surge in short-term rental license applications, indicating increased interest in the STR market. This rise follows efforts to improve compliance with local regulations. Hosts should familiarize themselves with new permit requirements to avoid potential penalties and ensure smooth operations.
This article discusses the construction of more rental homes near transit in Burnaby. The focus is on increasing housing supply near public transportation. While specific STR implications are not detailed, it implies a changing landscape for residential real estate and potentially offers insights into future housing trends that may affect hosts in areas around Burnaby.
Curated by Learn STR by GoStudioM