By Joe Brancatelli
June 19, 2013 --It's been a very bad couple of days for business travelers hoping to use their Marriott Rewards points for a classy, freebie holiday in South Florida.

First Marriott's Ritz-Carlton brand was ousted as manager of a Palm Beach hotel it had controlled for more than two decades. Then the owners of the iconic Eden Roc Hotel in Miami tossed Marriott's Renaissance brand from the premises.

It's not that Marriott customers will be hurting for South Florida lodging options. The chain's website lists at least 60 Miami-area properties including several other Ritz-Carltons and an a panoply of Courtyards, SpringHills, Residence Inns and plain old Marriotts where we can burn some points or pay cash money to rest our head on a Marriott-branded bed. But Marriott's unceremonious dismissal from two high-profile hotels in as many days points out an intriguing reality in hotelkeeping circa 2013.

The brand name on the revolving lobby door of many hotels and resorts seems to be revolving as frequently as the door itself. Hotel brand "flags" are being hoisted and lowered so fast that it's getting harder to hard to know what chain represents what property. And to hear hotel folks explain it, the pace of change has everything to do with money and nothing at all to do with good housekeeping.

"This is all about the money," one straight-talking hotel executive told me over the weekend. Nightly room rates "haven't moved and the reason we're all still in business is that interest rates are low. The people who own hotels are trying to make sure they have the best name on the door to fit their property and are paying the least amount for the privilege."

As we've discussed before, hotels are hardly a straightforward proposition these days. Lodging brands you know from giant chains such as Marriott, Hilton, InterContinental and Wyndham are simply that: brand names franchised to the property owner for a slice of the take, usually as much as 15 percent right off the top line. Although some chains do manage some properties directly witness Marriott's multi-year, lawsuit-intensive contretemps with those two Florida resorts hotel companies generally want out of the management business so they can focus on the more lucrative franchising end. Day-to-day operation of brand-name hotels are now most often in the hands of little-known "management companies" that act as middlemen between the franchised brand and the owners of the real estate. And the "asset stack" that controls the bricks-and-mortar is often a convoluted array of bondholders, mortgageholders, insurance companies, investment funds and real-estate investment trusts.

As we've also discussed, the concept of "velcro hotels" properties that change brand names so frequent that industry insiders joke that their signs are fastened with removable tape is a long-standing lodging tradition. But the pace of change now is frenetic and, more frequently than ever before, hotel owners are moving properties from one chain to another in bulk, often dozens of buildings at a time.


  • Omni Hotels, controlled by Texas billionaire Robert Rowling, last week bought five classic American resorts from a Denver real-estate firm called KSL Capital Partners. By July 1, iconic destinations such as the Homestead in southwest Virginia and the La Costa resort in Carlsbad, Calif., will fly the Omni flag.
  • A newly formed Texas hotel firm bought 25 LaQuinta Inns properties earlier this month and all 25 will be out of the LaQuinta chain by the end of the year. LaQuinta, controlled by the Blackstone Group, which also owns Hilton, says it plans to dispose of at least 25 more properties and they, too, will eventually leave the LaQuinta network.
  • In March, FelCor, a real-estate investment trust that owns 66 hotels, pulled the Holiday Inn name off eight of its properties and reassigned them to the Wyndham Worldwide, which franchises its brand names (including Ramada, Days Inn, Howard Johnson and Super 8) to more than 7,300 hotels around the world.
  • In January, the Jameson Inn chain essentially disappeared when more than 100 of the properties were reflagged en masse. The hotels' owner, Colony Capital, assigned 56 former Jameson Inn branches to Wyndham and 46 others to Choice Hotels, which controls Comfort Inn, Econo Lodge and many other brands.

I could go on, but you get the point. And the point is money. In the FelCor deal, FelCor had to pay InterContinental Hotels, which controls the Holiday Inn brand, $30.7 million to terminate the contract. But FelCor received more than $100 million in incentives and guarantees over a 10-year period to switch the eight hotels to the Wyndham flag.

"We had to look at what our investment is doing and we needed a return," FelCor's Stephen Schafer explained in a hotel trade publication. "The guarantee level [from Wyndham] is above what we ever did as Holiday Inns."

All this frenzied reflagging doesn't make for happy travelers. Just ask Mark Snyder, once a regular at the Holiday Inn Beacon Hill in Boston, or Bob Duchatkiewicz, a former regular at the Holiday Inn Historic District in Philadelphia. Both properties switched to the Wyndham brand in the FelCor deal.

Illinois-based Snyder learned about the Boston reflagging directly from InterContinental, which emailed him after a recent stay and told him not to expect his frequent-guest perks in the future because the property was no longer a Holiday Inn. Snyder told me yesterday that he's going to Boston later this month and will be staying at a bed-and-breakfast inn rather than what is now called the Wyndham Boston Beacon Hill.

Florida-based Duchatkiewicz, who travels to the Philadelphia area about 10 times a year, said he'd been staying at the Holiday Inn at North 4th and Arch streets for about a decade. Now that it's called the Wyndham Historic District, however, he's moved some of his business elsewhere.

"They have jacked up the rates," he explained. "It's not worth the $270 a night posted on the Wyndham site." (When I checked, the hotel was actually quoting $289 for a one-night stay next week.)

Instead, Duchatkiewicz has spent some recent nights at the Omni Hotel a few blocks away or at the Hyatt at Penns Landing on the Philadelphia waterfront. But he's not totally off the Holiday-Inn-cum-Wyndham.

"I have reservations at the Wyndham Historic District starting July 4th for the weekend," he told me by email yesterday. "I got a great $109 rate going though in-house reservations."

ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.

THE FINE PRINT This column is Copyright 2013 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright 2013 by Joe Brancatelli. All rights reserved.