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Check-in - February 2021

Check-in - February 2021

Published

Feb 02 2021

Written By

Karen Friebe

Of Counsel
UK

Welcome to your quarterly newsletter from Bird & Bird's Hotels, Hospitality & Leisure team

We are delighted to share the February 2021 edition of Check-In, Bird & Bird's quarterly newsletter for hotel, hospitality & leisure businesses.

The newsletter focuses on hot topics and legal developments impacting on various aspects of the sector around the globe. In this edition we are pleased to include an interview with Ben Godon (Head of Hospitality Asset Management, Colliers) in our Industry Spotlight. Ben sat down (virtually) with Associate Matthew Vance to share his insights on the state of the UK hospitality market in light of a tumultuous year and uncertain future.

We are also introducing two new regular features to Check-In: HMA Bites, where Associate James Fowler will explore a different aspect of hotel management agreements in each edition, and Employment Corner, where Partner Alison Dixon and Associate Stephanie Creed will share a summary of the latest employment law updates for hotel, hospitality & leisure businesses.

We also continue to report on the latest developments in COVID-19. Please visit our dedicated In Focus webpage, which includes a Business Interruption Insurance tracker and an overview of key requirements and government support available for the international hotel sector during the pandemic.

Please get in touch if you would like to discuss any of the issues raised in these articles, or visit our webpage for more information about Bird & Bird's Hotels,

HMA Bites
Employment Corner
Case Update
Industry Spotlight
Market Spotlight
Contracts
Sustainability
News & Events

HMA Bites

Performance tests: insight, tips and advice

Welcome to HMA Bites! In each edition of Check-In we will take a concise look at an issue relating to hotel management agreements ("HMAs") and provide insight, tips and advice based on our experience in practice. In this edition, we will be taking a look at performance tests.

In HMAs performance tests are used to set out a minimum level of acceptable financial performance, and to give the hotel owner a right to terminate if the hotel underperforms against the agreed benchmark. They can be formulated in a number of ways (and often in combination).

Performance tests are not a "boilerplate" clause – they are complex, and need careful consideration. Whatever methodology is used, it must be clearly articulated, and it must achieve the intended result. The parties to the HMA should always run some example calculations using dummy figures to ensure that the methodology achieves their desired result – and it is best practice to include a worked example in the HMA itself to avoid any potential misinterpretation.

Employment Corner

Hotels and employment: where we are

The employment landscape for hotel, hospitality & leisure employers has changed significantly over the last 12 months, and employers in these sectors are facing a particularly unique set of challenges looking forward.

Our German employment team has been looking at the position in Germany, with a focus on the potential options open to employers grappling with these challenges, and our UK employment team has put together a guide to the key considerations for UK employers for the next 12 months.

COVID-19

We have seen an increasing focus on the roll out and deployment of vaccines in recent weeks as the world grapples with the evolution of COVID-19. With this in mind, we have updated our global COVID-19 chart to include key questions regarding the data protection and employment issues associated with enforced vaccination and vaccine status.

Brexit

With the start of the new year comes the end of the Brexit transition period and the UK’s official exit from the EU. Whilst we haven’t yet seen much in the way of proposed changes to the main body of employment law and practice, there are significant immediate implications for immigration and the legal right to work. Given the complexities, we have prepared a series of articles and short videos setting out the key information that you need to plan ahead and protect your business, including:

Diversity and ethics

Ethical considerations, such as diversity, equality and inclusion, remain hot topics, and it will be important for employers to demonstrate their commitment to these principles despite other pressures on businesses. Such actions can be big or small, cheap or costly, but engagement with and presentation to staff and consumers alike will be key. With that mind, our employment team has published a range of tools including:

Global diversity guide, covering legal obligations, accepted practice and permitted actions related to diversity and inclusion initiatives, with a particular focus on how you can use data to assist you in this.
A series of webinars and collateral focused on The Ethical Workplace, covering a range of topics including domestic violence, mental health and diversity monitoring.

Changes to the way we work

The pandemic has required changes to the way we work, some of which present a particular challenge to the hotel, hospitality & leisure sectors, two key aspects being:

Health and safety: concerns over workplace safety are a developing area of tension between employers and employees.
- Employers should expect to manage employee health and safety concerns and to encounter resistance regarding the return to physical workplaces.
- Employers are well advised to plan ahead to manage absence and to update health & safety and sickness absence, reporting and management procedures.
Working from home: one of the key changes as a result of the pandemic has been the enforced transition to working from home where possible. This has been supported by an increase in the use of new forms of technology and applications.
- Employers should consider the data and privacy implications of this, as well as any inherent risk to the duty of mutual trust and confidence, particularly in the case of activities such as employee monitoring. For further guidance on this, please see our global guides on remote working and employee monitoring.

Case Update

Al-Najar v The Cumberland Hotel: Court of Appeal rules on a hotel’s duty of care to protect guests from injury

The UK Court of Appeal in Al-Najar and others v The Cumberland Hotel (London) Ltd [2020] EWCA Civ 1716 has upheld the high court’s assessment of the standard of care to be expected of a hotel, and in particular the role of the hotel lobby officer, in a case concerning whether a hotel was liable in negligence for guests’ injuries which resulted from a violent attack by an intruder. It was held that while a hotel does have a duty to take reasonable care to prevent guests from injury, there is no absolute duty, and on the facts the hotel was not liable for injuries suffered by the Claimants.

Industry Spotlight

Interview with Ben Godon, Head of Hospitality Management at Colliers International

Ben Godon and his team provide expert hotel advice on managing and maximising the performance of their client’s assets, which include a diverse portfolio of hotel properties both in the UK and Europe. Ben’s wide-ranging expertise includes everything from advising on budgeting and cashflow generation, implementing capex projects, and identifying and negotiating new business opportunities.

Ben sat down (virtually) with Associate Matthew Vance to share his insights on the state of the UK hospitality market in light of a tumultuous year and uncertain future.

Read more >

Market Spotlight

The Australian hotel sector's response to COVID-19

There are few sectors more impacted by COVID-19 than the hotel sector. Border closures (both international and interstate) as well as movement and gathering restrictions within each of the Australian States, have had a significant effect on tourism, and consequently, the viability of Australian hotels. This article explores the effect that COVID-19 restrictions have had on the Australian hotel sector, what hoteliers can do in response to these changes, and how the market is likely to react going forward.

Overview of the Hungarian hotel market in 2020

There is no doubt that 2020 will remain a remarkable and unforgettable year, particularly from the hotel sector’s point of view. As COVID-19 and its consequences spread across the globe in March 2020, the hotel sector was among the first to be hit directly, and Hungary was no exception.

Due to the fast and shocking impact of the pandemic on the hotel industry, the first half of 2020 was truly two-faced. While guest arrivals from January to February 2020 showed double digit expansion, all key indicators fell dramatically in the hotel industry.

Hotels in Budapest especially suffered, particularly those which rely heavily on foreign travellers. Having seen their worst 6-month period on record, the hotels’ strategies varied as to whether or not to reopen after April and for the rest of the year in 2020.

Read more >

Contracts

Up to speed on good faith under English law? It's never been more relevant

Over the last few years, implied good faith, the Braganza duty and 'relational' contracts have become buzzwords not only in legal circles but also amongst business people. It's not just academic - it's relevant on a day-to-day basis for business people within the hotel, hospitality & leisure sector doing English law deals, from negotiating management and franchise agreements through to the exercise of contractual discretions. Good faith under English law is evolving, and given the impact that COVID-19 is having on contract performance and behaviour, it's never been more important to have a working understanding.

Read more >

Sustainability

2021: the year sustainability moves to the top of the agenda for stakeholders in the hotel, hospitality & leisure industry?

Key stakeholders in the hotel, hospitality & leisure industry are showing an ever-increasing interest in sustainability in relation to the running of their business.

There have been attempts at an international level to reduce carbon dioxide emissions for decades and the Paris Climate Agreement in 2015 aimed to limit any resulting global temperature increase to well below 2 degrees above pre-industrial levels. There has also been an explosion in the awareness of, and demand for, sustainability across all sections of society over the last few years, be it reducing carbon dioxide emissions or eliminating plastic waste. The discussion regarding the shift to a low carbon, circular economy was amplified in 2020 and the UK government set out a ten point plan in November to accelerate the path to net zero. The sustainable agenda is also influencing investment decisions and there is little doubt that demand for assets with strong environmental, social and good governance credentials is growing especially in the real estate sector.

Read more >

News & Events

Webinar, 24 February 2021: Hotel Technology - Impacting the Bottom Line

Bird & Bird, AlixPartners, EP Business in Hospitality and HVS are teaming up again to present the next webinar in this series which will focus on Hotel Technology and, in particular, how it can be used to generate business, drive revenues and increase profitability.

During the session Ian Edwards, Partner in the Tech Transactions team at Bird & Bird, will interview George Turner, Chief Commercial & Technology Officer at IHG Hotels & Resorts to explore current trends and his ask for his insight in to what the future holds for hotels and their rapidly evolving tech offering. A lively panel will follow made up of industry experts to take the discussion further and answer questions.

We hope you can join us.

Please RSVP here >

Launch of the International Hotel Law Review

We are delighted to share the inaugural edition of the International Hotel Law Review, edited by Bird & Bird Partners Karen Friebe and Mark Abell, with contributions from our international Hotels, Hospitality & Leisure team and wider network.

The hotel sector has experienced significant change and continues to evolve, yet this is the first book of its kind focusing on the structuring and implementation of international growth in the hotel sector.

The book comprises 11 country chapters contributed by our international Hotels, Hospitality & Leisure team and wider network, covering Canada, China, Denmark, France, India, Italy, Japan, Malaysia, Poland, Singapore, Switzerland, as well as a chapter on franchising in the hotel sector. Click here to access the International Hotel Law Review.

Read more >