Duff on Hospitality Law

Last week saw another Americas Lodging Investment Summit come and go. Over the course of 3 days, nearly 2500 lodging owners, operators, investors, consultants and other industry members descended on host hotel JW Marriott and the surrounding LA Live attractions. The 2500 attendees were the third highest in ALIS history, nearing the peak achieved back in 2006 and 2007 prior to the recession.

From the many attendees I spoke with during the course of the Conference, I’d describe the mood of most attendees as incredibly optimistic. With operating fundamentals expected to continue to improve in 2013 and beyond (more on this later) and supply growth expected to stay below the industry’s 30-year average, there was much to celebrate. From the discussions I had, many owners and operators are looking at 2013 as a year of incredible growth.

While I usually don’t make many of the sessions while at the Conference, the one session I try to make each year is the annual industry forecast. This year’s forecast entitled, “The Numbers – Where Are We Now and Where Are We Headed?” featured presentations by Randy Smith (Smith Travel Research), Mark Woodworth (PKF Consulting), Art Adler (Jones Lang LaSalle) and Adam Weissenberg (Deloitte & Touche). Highlights from Randy Smith’s presentation included . . .

• • Since 2010, U.S. lodging demand has increased at an annual rate of 15.7%
  • December 2012 set a new U.S. lodging demand record – 91.7 million guest rooms
  • It has taken approximately 5 ½ years to restore U.S. ADRs from the peak achieved in 2007

First-time contributor and resident litigation expert, Don Scaramastra, has offered to update the status of the much discussed class-action involving online distributors and certain hotel operators, and to discuss antitrust laws related to online distribution. Thank you Don for this informative piece.

On December 11, 2012, the federal Panel on Multi-District Litigation ordered the consolidation of class-action lawsuits alleging that online travel agents and certain hotel chains conspired to impose a resale price maintenance scheme that fixed the retail price for hotel room reservations in violation of federal and state antitrust laws. The MDL Panel ordered these lawsuits to proceed in the U.S. District Court for the Northern District of Texas. Since last summer, over 20 such lawsuits have been filed. This outcome appears to be good news for the defendants, all of whom advocated for the transfer and consolidation of these cases to that district.

You might be wondering what these lawsuits are all about, what “resale price maintenance” (or “RPM”) is, and what the antitrust laws have to say about it.

RPM is the practice in which a seller and buyer at one link in a distribution chain agree on the minimum price that the buyer may turn around and resell the product.

RPM has something of a storied history in antitrust law. Under federal antitrust laws, RPM was deemed unlawful just over a century ago. But in the 1930s, Congress enacted a partial “fair trade” exemption from liability. Four decades later, Congress repealed the exemption, returning RPM to its former illegal status. And finally, five years ago, in Leegin Creative Leather Products v. PSKS, Inc., the Supreme Court declared that not all RPM agreements were illegal, only those that imposed an “unreasonable” restraint on trade. And that is where things stand today.

If you are a regular reader of Duff on Hospitality, you are well aware of the recent battle between the U.S. Department of Justice (DOJ), which enforces the Americans With Disabilities Act (ADA), and hospitality owners and trade associations over swimming pool accessibility regulations (see previous posts here and here). With DOJ’s twice-extended deadline for compliance right around the corner on January 31, 2013, and industry-backed legislation dead in Congress committees, pool owners need to focus on compliance with DOJ’s requirements immediately, if they have not already. Mike Brunet, a partner in our Seattle office's labor and employment group and member of our Hospitality Practice Team, has prepared this post to help readers understand the requirements and nuances of the new law. Please feel free to contact Mike Brunet directly if you have any questions.

What are the DOJ requirements?

Under DOJ’s interpretation of the applicable regulations on swimming pool accessibility, owners of pools or spas open to the public must, if “readily achievable” (more on this below), provide at least one accessible means of entry to small swimming pools, which must either be a sloped entry or a pool lift. Larger swimming pools (with more than 300 linear feet of wall) must have two accessible means of entry, one of which must be a sloped entry or a pool lift. Each pool or spa on the property (with a minor exception for clustered spas) must have a separate accessible means of entry. If the means of entry is a pool lift, which is the most popular choice given its cost relative to other means of entry, it must be affixed to the pool deck or apron in some manner, and must be in place and ready for use (including charged batteries, if using a battery-powered lift) during all hours that the pool or spa is open for use.