General News

Daniel Marre, Hotels & Leisure partner in Perkins Coie's Chicago office, recently wrote a perspectives article for GlobalHotelNetwork.com. His article, "The Hotel: A New Paradigm," suggests that the economic model of a modern hotel is drifting to that of a shopping mall. Hotels not only offer a bed, but also amenities such as food and beverage, spa services, parking, retail, and the like. Trouble is, these amenities aren't usually cost effective. One solution to this problem is to outsource these amenities to third parties that have their own brands and specialize in providing a particular service. This allows hotels to focus on their core competency, while each amenity operates as a separate economic unit and pays “rent” to the hotel. The hotel brand is the anchor, selling transient and group rooms to bring people into the hotel, and the other amenities are the in-line stores, which benefit from the business driven by the anchor.  This is the essence of a shopping mall.