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Global Hospitality & Leisure Newsletter

February 2012
Mayer Brown Newsletter

Hotel Classification in France
By Alexandra Plain, Paris

The law of 22 July 2009 amended the hotel classification in France with the three following objectives:

  • to improve the hospitality quality with a more stringent classification, which introduces new criteria relating to the quality of services and visits every five years ;
  • to allow the customers to better understand the hotel classification
  • to improve the competitive position of France, by creating a 5th star

On 23 July 2012 the former rating classification shall no longer be valid and therefore hotel owners and/or operators shall have obtained the new rating by such date.

To request the new rating, hotel owner and/or operator shall contact Atout France, and organise a visit of control which will be carried out an independent organism which shall issue a report control. Such report shall then be addressed to the Prefecture which would issue the decision of rating ("arrêté de classement") within one month.

Online Hotel Booking Services in the Focus of German Competition Authorities and Jurisdiction
By Jürgen Streng, Germany

The German market for online hotel booking services will be subject to further observation by German competition authorities and German jurisdiction.

Already in August 2011, the regional court of Berlin prohibited by way of interlocutory procedures a Dutch company providing online hotel booking services to affect hotel rankings ordered by popularity as this would be a violation of the German Law on Unfair Competition (Gesetz gegen den unlauteren Wettbewerb (UWG)). The regional court criticized the company’s practice to entitle hotel partners to positively affect their rankings in categories like "popularity" by paying higher commissions to the online booking portal.

In February 2012, the German Federal Cartel Office (Bundeskartellamt) issued a warning letter to HRS, Germany’s leading hotel reservation service with business seat in Cologne, due to a violation of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen (GWB)). The reason behind this warning letter is a most favoured treatment clause obligating HRS’s hotel partners to provide HRS always and in each case with the best room price of all online booking offers, with the highest room availability and with the most favourable booking and cancellation conditions. The German Federal Cartel Office is of the opinion that this practice and HRS’s significant market position prevents its competitors both from improving their market position and from entering into the market for online booking services.

Additional Penalties for Listing Prices in Foreign Currency
By Eddie O'Shea, Ho Chi Minh City

Hotel operators should be mindful of measures taken by the Government of Vietnam to ensure compliance with the law on the use of foreign currency in Vietnam. The general rule is that all transactions, payments, listings and advertisements by residents and non-residents must be in Vietnamese dong. Violations of the law would include listing room rates or other hotel services in a currency other than Vietnamese dong. One such measure is Decree 95/2011/ND-CP (effective 20 October 2011) providing stricter penalties for violations, including a significant increase in the fine for unlawful advertising/listing of prices in a foreign currency to 300-500 million Vietnamese dong. Since the Decree's introduction reported decisions of the State Bank of Vietnam indicate its willingness to take action against hotels violating these regulations and impose the maximum penalty.

Positive Outlook for the Hong Kong Hotel Industry
By Emily Wong, Hong Kong

2011 was a good year for the hotel industry in Hong Kong. Visitor arrivals reached an all time high in 2011, up 16.4% to 42 million visitors, according to the Hong Kong Tourism Board. Mainland China visitor arrivals were up 23.9% to 28.1 million visitors. Hong Kong scored the highest in the Asia Pacific region in terms of ADR increases in 2011 (being 23.1%) as well as RevPAR gains (being 26%), according to STR Global. Occupancy also reached a 15-year high of 88%. It is anticipated that tourist arrivals will rise another 5.5% in 2012.

Though Hong Kong is set to get another 49 hotels or 9,000 rooms in the next four years, the tourism commissioner has hinted that this may not be enough. It would be difficult to plan ahead since the government only releases land for hotel use on a year-to-year basis in line with tourism growth. However, recently the government has been making various efforts to increase the supply of hotel rooms, including putting "hotel only" sites on the Land Sale Programme and approving applications for redevelopment or conversion of industrial buildings into hotels. Looks like it will be a bright year ahead for hoteliers looking to build or operate hotels in Hong Kong!

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Authors

  • Dr. Jürgen Streng
    T +49 211 86224 216
  • Emily I. C. Wong
    T +852 2843 4352

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