Week of Oct. 26, 2009

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Choice Hotels International Blackballed by Expedia and Hotels.com
Expedia has dropped all Choice Hotels International properties from its two websites, effective
October 15, because Choice would not accept new contract terms for its brand-wide wholesale agreement demanded by the web service provider (A few Choice hotels can still be found on the websites, in cases where those properties have independent contracts in place with Expedia/Hotels.com.). In an October 20 interview with Hotels magazine, Choice CEO, Steve Joyce estimated that Expedia/Hotels.com represents about three per cent of the Choice system’s business. Joyce, said, “When we said we can’t sign [a new proposed agreement], they took our hotels off their site within hours.” He added, “They dramatically looked to alter the agreement. We had an agreement from 2005 on, and we would have lived happily with that. They clearly sensed blood in the water and that now was their time to drive agreements. I believe in tough negotiations, but what they came up with was over the top.” He charged that Expedia wanted Choice to, “literally give up control of its inventory and pricing and wanted to penalize franchisees who did not give Expedia 100 per cent access all the time.” He said, “They were asking for outrageous things. They demanded last room availability, meaning regardless of strength of market, if we don’t expose the last room to them at that discounted price, we are not in good standing. And, oh by the way, they said we can never offer [customers] a price we don’t offer to them…They would no longer be our supplier — they would become our revenue manager.” Expedia Inc. quickly responded by sending letters to all Choice Hotels International franchisees denying fault for the breakdown in negotiations and expressing dismay at Choice’s decision to withdraw, claiming it never made any demands that are not already in place with other hotel companies. The letter, obtained by and posted on the technology blog Tnooz.com, suggests that Expedia remains open to negotiations with franchisees on a property-by-property basis.

McDonald’s Reports Strong Quarter, Cautions about October Results
McDonald’s Corporation, Oak Brook Ill., has announced strong results for the third quarter, period ended September 30, with global sales up 3.8 per cent and sales in the U.S. up 2.5 per cent. Same-store sales (SSS) were up 3.8 per cent, led by Europe with a 5.8 per cent rise, and operating income increased six per cent (11 per cent in constant dollars), with earnings per share up 19 per cent to $1.15. However, CEO Jim Skinner cautioned that domestic SSS for October could be flat or slightly negative, which he attributed to bad weather in the eastern U.S. last week, a “sub-optimal operating environment” and comparisons with October 2008 results when SSS soared 5.5 per cent. In the event that October shows a decline, it will be only the third time the monthly figure hasn’t climbed in six and a half years. Skinner concluded, “I’m confident that our focus on the customer and commitment to financial discipline will continue to deliver long-term profitable growth for our system and our shareholders. For October, despite a declining informal eating-out market around the world, we expect consolidated comparable sales to remain positive.” Skinner added, “We’re recession resistant, not recession proof.”

Easton’s Group Opens 152-Room Hilton, Third New Property in Six Months
Steve Gupta, president and CEO of Markham, Ont.-based Easton’s Group of Hotels Inc., celebrated the grand opening of the new-build, 152-suites, Hilton Garden Inn Toronto Airport West/Mississauga, supported by a host of guests, including Craig Mance, senior vice-president of Franchise Development for North America, Hilton Worldwide. The property also has 3,200 square feet of meeting and banquet space. This is Gupta’s third new hotel opening in the GTA in the past six months, a total of 523 rooms. Earlier this year, he opened the 224-suite Hilton Garden Inn Toronto Downtown and converted his former Comfort Suites hotel on Jarvis St. to the Hilton Garden Inn Toronto City Centre. Gupta has several more projects under construction and scheduled for opening in 2010, including a Homewood Suites and a Courtyard Marriott.

Air Curtain Drive-Thru Window Tested in U.S.
A new air curtain window for drive-thru service has been successfully beta-tested for six months at an Arby’s restaurant in Struthers, Ohio, as reported on the supplier’s website, and in QSR magazine. Developed by air-door manufacturer Berner International, New Castle, Pa., the drive-thru window is designed to save energy, create comfort and keep dangerous car fumes from entering the open window. The Arby’s test of the new air curtain demonstrated that, “Fumes infiltrating the restaurant were all but eliminated and drive-thru employees were able to wear normal indoor uniforms instead of heavy coats and gloves during wintertime operations,” said Vicki Vitullo, general manager.” She added, “If for some reason we forget to switch the air curtain on, fumes and cold weather are definitely noticeable.” The system plugs into any existing 120-volt power source.

96-room Holiday Inn Express Opens in Whitecourt, Alta.
A new-build, 96-room Holiday Inn Express hotel will open October 29 in Whitecourt, Alta., sporting the Holiday Inn Express brand’s new signage, which exemplifies the standards of the $1-billion Holiday Inn brand re-launch program by IHG (InterContinental Hotels Group). Located in the ‘snowmobile capital of Alberta,’ the new property is close to downtown, local business and area attractions.

U.S. Hotel Real Estate Transactions Down 75 per cent
U.S. hotel real estate transaction volume in 2009 is expected to be just 25 per cent of what it was at the peak it reached in 2007, with selling prices down by 50 per cent, according to LE (Lodging Econometrics) in its third-quarter Lodging Real Estate Overview. It points out that “regional and community banks are experiencing growing balance sheet difficulties of their own and are now cutting back on mortgage lending as well, directly affecting smaller projects in the pipeline.” Earlier larger high-end projects (150 rooms or more) were impacted the most when institutional- sized lenders halted real estate lending. In Q3, pipeline totals declined for the fifth consecutive quarter, with projects down by 34 per cent and rooms down by 38 per cent from the Q2 2008 peak. Project count declines are accelerating in the upscale, mid-scale with and without F&B and the economy segments, as “financing is now increasingly difficult to locate for these chain scales,” LE explains.

Louis Audette New President of Rational Canada; Björn Rowland Promoted in U.S.
Louis Audette has been appointed president of Rational Canada, based in Mississauga, Ont., and is now responsible for the company’s day-to-day operation. A seven-year Rational veteran, Audette worked in Germany and the U.S., including doing research and development, as a corporate chef, trainer and a regional sales director. Prior to Rational, Audette’s experience included a large catering company in Germany and two Michelin-rated fine-dining restaurants in France and Switzerland. Audette replaces Björn Rowland who, effective January 1, 2010, will become president of Rational USA and will be responsible for the U.S. subsidiary’s day-to-day operations. He will also continue in his role as vice-president of North America, overseeing the Canadian operation. Rowland filled a similar dual role serving as president of Rational Canada for the past year. Rowland has worked in various roles in multiple countries in his eight-plus years with Rational.

Andrew Stull New VP of Operations, Hawthorn Suites by Wyndham
Andrew Stull has been appointed vice-president of Operations for the 90-property Hawthorn Suites by Wyndham brand, which is part of the Parsippany, N.Y.-based Wyndham Hotel Group. An industry veteran, Stull’s experience in management and director-level operations includes more than 13 years with Extended Stay Hotels and the operation of 68 schools throughout the state of New Jersey for Philadelphia-based Aramark Education. Hawthorn Suites by Wyndham is the new name of the affiliation of Hawthorn Suites with Wyndham Hotels and Resorts, designed to leverage marketing, sales and training across the brands while broadening the overall consumer base. A refreshed red and orange brand logo that incorporates key design elements of the Wyndham logo is now being developed.

Granville Island Brewing Sold to Creemore, a Molson Company
Vancouver’s Granville Island Brewing has been sold by Ontario-based Andrew Pelleter Limited for an undisclosed price, to Creemore Springs Brewing, a Molson-owned microbrewery located in Creemore, Ont. Established in 1984, the Vancouver outfit was Canada’s first microbrewery. Creemore Springs was established in 1987. Walter Cosman, director of Marketing and Sales for Granville Island Brewing, said, “Creemore is committed to keeping the unique formula that has made Granville Island Brewing what it is today — the finest quality ingredients, unpasteurized product, brewed locally in British Columbia by dedicated people — while leveraging its abilities to enable more and more people to enjoy our West-Coast inspired craft brews.”

ORHMA Demands Wholesale Liquor Pricing, Reduced Mark-Up Fee
The Ontario Restaurant Hotel & Motel Association (ORHMA) has asked the Ontario government to provide much needed relief for bars, restaurants and hotels by eliminating the six per cent mark-up fee as well as adding true wholesale prices for licensee liquor purchases. In a meeting with the Ministry of Finance to discuss the proposed Harmonized Sales Tax (HST) and changes to the alcohol tax structure, ORHMA challenged plans to make adjustments and increase current alcohol fees, levies and charges to licensees. Currently, the province collects tax from licensed establishments at the rate of 10 per cent and on alcoholic beverages sold through retail stores at the rate of 12 per cent. Under the HST, the provincial rate would fall to eight per cent. The Ministry of Finance is considering recouping lost revenues through the new fees. President and CEO Tony Elenis said, “The ORHMA is seeking assurances from the government that any increase in taxes charged to licensees will be offset by other measures, so the expense burden for a licensee is not negatively impacted with a move to the HST.”

Discarded Food, Trimmings to be Converted into Electricity
Starting in late 2010, under an agreement between Loblaw Companies Ltd, Brampton, Ont., and Canadian biogas developer and operator, StormFisher Biogas, based in Toronto, discarded food and organic trimmings from 47 Loblaw grocery stores will be converted into electricity. The five-year plan will see 15,000 tonnes a year of discarded food and other organics from stores in the Windsor-to-Waterloo corridor processed at a plant to be built near London, Ont. The facility is expected to generate 2.8 megawatts of continuous power. Loblaw organics are expected to generate enough electricity for about 225 homes annually, while reducing more than 300 tonnes of CO2 equivalents. Three-year-old StormFisher expects to convert organic materials into renewable energy by using oxygen-free anaerobic digestion, which is powered by different types of micro-organisms — the same process as the stomach employs. A bi-product of the process is a nutrient-rich, organic, natural fertilizer that can be used in agriculture to reduce dependence on chemical fertilizer.

Ontario Greenhouse Growers Publish Cookbook
The Ontario Greenhouse Vegetable Growers (OGVG) celebrated the launch of its new cookbook, A Taste of Ontario, with a presentation and dinner at McEwan, the recently opened take-away fine foods and grocery emporium created by renowned chef Mark McEwan in Don Mills, a suburb of Toronto. The beautifully illustrated and stylishly presented 80-page publication offers more than 40 recipes featuring Ontario ingredients with a focus on the wide variety of tomatoes, cucumbers and peppers grown by OGVG members. Edited by well-known chef Anthony-John Dalupan, a culinary instructor at St. Clair College of Arts & Technology, and his wife Kathleen Hart, the complete book is available here. The Leamington, Ont.-based OGVG organization represents about 250 members who produce tomatoes, cucumbers and sweet peppers, 70 per cent of which is exported to the U.S. For information: Laura Brinkmann, Tel: 519-326-2604 or brinkman@ontariogreenhouse.com.

CCGD Ontario Conference, Nov. 17, Toronto
The Ontario Conference of the Canadian Council of Grocery Distributors will be held November 17 at the Toronto Congress Centre. The event will feature retailer briefings by senior executives of Loblaw, Metro, Sobeys and Walmart. General Rick Hillier will be the keynote speaker and the Neilson Company will present an industry update. For information: Jeanette Lee, Tel: 416-922-6228 x331 or jlee@ccgd.ca.

B.C. Hospitality Industry Conference, Nov. 22-24, Vancouver
The B.C. Hospitality Industry Conference & Exposition will be held November 22-24 at the Fairmont Waterfront Hotel in Vancouver. The concurrent Hospitality Trade Exposition will take place at the adjacent Vancouver Convention and Exhibition Centre. The conference is hosted jointly by the British Columbia Hotel Association (BCHA), the Alliance of Beverage Licensees of B.C. (ABLE-BC), the British Columbia Restaurant Foodservice Association (BCRFA), and the B.C. Lodging and Campgrounds Association. For information on the conference, contact: Nora Cumming, Chemistry Consulting Group Inc., Tel: 250-382-3303 x204 or conferencemanager@hospitality-trade.com; for the trade exposition, contact: George Acs, Executive Event Production Inc, Tel: 604-736-3118 or george@bchospitalityexpo.com.

CTHRC’s Tourism HR Forum, Nov. 23-25, Montreal
The 8th annual Tourism HR Forum 2009 will take place November 23 to 25 at the Delta Centre-Ville hotel in Montreal. Managed by The Bowering Group for the Canadian Tourism Human Resource Council, the theme of the forum is, “On Your Mark! Get Set! Change!” The event will focus on critical issues related to tourism and hospitality recruitment, retention and staff development in the current economic environment. For information, Tel: 204.958.7540.

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