Check-In - November 2023

We are delighted to share the November 2023 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 you will find our regular highlights, HMA Bites, where Senior Associate James Fowler explores various aspects of Hotel Management Agreements, and Employment Corner, where Partner Alison Dixon summarises the latest employment law issues for hotel, hospitality & leisure businesses.

We also highlight the challenges facing hotel owners with debt finance and the likely opportunities for investors as we move into 2024, as well as new VAT rules that hotel, hospitality & leisure businesses may expect to come their way in the European Union.

Please get in touch if you would like to discuss any of the matters covered by these articles, or visit our webpage for more information about Bird & Bird's Hotels, Hospitality & Leisure team.
 
In this newsletter:

• HMA Bites
• Employment Corner
• Finance
• VAT
• News & Events

HMA Bites: F&B Operations in Hotels

Welcome to HMA Bites!

In each edition of Check-In we take a concise look at an issue relating to hotel management agreements and provide insight, tips and advice based on our experience in practice. In this edition, we will look at food & beverage operations in hotels. Owners are increasingly carving out F&B operations from the scope of their HMAs. So, what are the structures that a hotel owner can use if it wants to outsource its F&B operations? And what challenges does this bring – particularly where the Owner has an incumbent hotel manager in place under an HMA?

Read the full article here

Employment Corner

Welcome to Employment Corner!

In each edition of Check-In we explore the latest developments in Employment law and their importance to the Hotel, Hospitality & Leisure sector. In this edition, we will look at, among other topics:

• Important changes to UK holiday pay
• National Minimum Wage increases announced
• Workers (Predictable Terms and Conditions) Bill passed, giving new rights to many workers in the Hotels, Hospitality and Leisure sector
• Information about workers’ health: ICO publishes guidance on processing for employers
• UK Supreme Court has the final say on holiday pay: claims can be brought for a series of underpayments more than three months apart
• Employment Appeal Tribunal decision on entitlement to statutory redundancy pay where employees refuse an offer of suitable alternative employment

Read the full article here

Current developments in German labour laws

In this special edition of Employment Corner, we put the spotlight on recent developments in German labour laws that hotel, hospitality & leisure businesses will need to be aware of, including:

• Whistleblowing Directive
• Recording of working time
• Equal pay
• Law for the further development of skilled labour immigration

Read the full article here

Finance

Hotel finance: A new era for interest rates

The interest rate rises we have seen over the last 12 months both in the UK and in Europe were perhaps inevitable, and the reality is that we are potentially returning to an era of interest rates more closely aligned to the previous long term norms. The rate rises have had a significant impact on transactional activity in 2023 and are likely to have a significant impact on the hotel market in 2024. As rates across Europe continue to move over the next 12 months it will create challenges for existing hotel owners with debt finance, but will also bring opportunities for investors. Here we will look at the challenges facing hotel owners with debt finance and the likely opportunities for investors as we move into 2024.

Read the full article here

VAT

EU VAT reforms for hotel, hospitality & leisure businesses

Hotel, hospitality and leisure businesses may expect new value added tax rules coming their way in the European Union. Developments like the VAT in the Digital Age proposals, the travel and tourism VAT rules review, as well as new case-law and tax authority guidance for travel agents, are important for the industry. In this article we look at:

• VAT in the Digital Age
• Travel and tourism VAT rules
• Case law and tax authority guidance

Read the full article here

News & Events

Webinar: F&B in Hotels - loss maker or value driver?

Thursday 14 December, 9.00 - 10.30 GMT

Together with HVS, AlixPartners and EP Business in Hospitality, we are pleased to present our next webinar on the topic “F&B in Hotels: loss maker or value driver?”

Many hoteliers are rightly focused on maximising RevPAR, whether this be occupancy or average rate, as this often enables profitability to be optimised. However, with hotels sometimes gaining 50% or more of revenue from F&B operations, often at little or no profitability, it surely makes sense to find ways both to boost revenue and to increase profitability from all aspects of F&B operations. Our webinar will therefore focus on how the good operators, owners and investors achieve this – and help you to turn loss makers into value drivers.

Find out more and RSVP here

Our UK team celebrates Tier 1 ranking for Hospitality & Leisure in the 2024 Legal 500 guide

We are delighted that our UK team has again achieved a Tier 1 ranking for Hospitality & Leisure in the Legal 500 UK guide, and is recognised as having a "unrivalled knowledge of the hospitality industry." Head of our Hotels, Hospitality & Leisure sector, Karen Friebe, has achieved a ranking in the Hall of Fame and is described as operating in a "league of her own". Associate, Matthew Vance has been named a Rising Star, and described as a "real top performer". Senior Associate, James Fowler is also named as a Key Lawyer, as well as being ranked as an Associate to Watch for Franchising in the latest Chambers guide.

Many thanks to all of our clients for their support and for taking the time to provide feedback on their experience of working with us. The full write-up about our team can be found here.

We welcome new Hotels, Hospitality & Leisure team-members in Spain

We recently welcomed partner, Conchita Sáinz, and associates Laura Sánchez and Alba Aparicio to our Real Estate team in Madrid. Conchita’s transactional experience covers the whole life cycle of real estate, including land, construction, urban planning as well as licences, leases, acquisitions, real estate asset management, finance, sale and leasebacks and disposals of all types of assets. Conchita’s hire expands our international capabilities in the Hotel, Hospitality & Leisure sector, particularly in the field of sustainability and energy efficiency.

Conchita is very well-respected in the market, as demonstrated by her excellent rankings in key legal directories, including being recognised as a ‘rising star’ in Legal 500 for two consecutive years, 2022 and 2023.

Conchita says: “The team and I are very excited to join the firm and collaborate with my new colleagues at Bird & Bird to provide innovative legal solutions for our clients. The Spanish hospitality and tourism industry continues to boom and legal insight plays a pivotal role in navigating complex real estate transactions and regulatory nuances.”

Find out more here

Our team returns to the Annual Hotel Conference in Manchester

Members of our UK Hotels, Hospitality & Leisure team, Karen Friebe, Charlie White, James Fowler and Matthew Vance, attended the Annual Hotel Conference in Manchester.

Over 1000 delegates took part, representing the major global hospitality investors, hotel brands, developers, suppliers, and funders. There were some interesting panel discussions over the two days of the conference. Some of the main themes picked up by our team were: innovation and inspiration; technology; and ESG.

During the conference, the Bird & Bird team also hosted a successful roundtable discussion with the Energy & Environment Alliance on the topic of ESG in the context of hotel management agreements. The discussion generated many interesting points and we plan to hold further discussion groups with key stakeholders soon.

Find out more about the conference here

Webinar report: Lease, HMA or franchise? Which model is best suited to today's investor?

We recently hosted the latest webinar in our series with EP Business in Hospitality, HVS and AlixPartners, with more than 450 people tuning in to watch.

Presentations by Karen Friebe, Head of Hotels, Hospitality & Leisure, and James Fowler, Senior Associate, together with Chris Martin, Senior Director at HVS Hodges Ward Elliott, set the scene, explaining each model and its respective pros and cons, along with the advantages of each to hotel owners. Chris also highlighted some of the lessons learned from COVID and key trends which have evolved, including ‘manchises’ and guarantees. This was followed by a lively panel discussion moderated by Graeme Smith, Partner and Managing Director of AlixPartners.

Watch the webinar recording here