Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
THERE ARE MANY challenges for hotels operating under the COVID-19 pandemic and its ensuing travel restrictions. It is a unique situation and, therefore, one that presents unique legal problems for hospitality businesses.
It may be advisable to have an attorney available to avoid or resolve issues that may otherwise produce costly results.
The Patel|Gaines law firm in San Antonio, Texas, has a page on its website dedicated to COVID-19 legal issues, and Rahul Patel, managing partner, has been taking on cases stemming from the pandemic. The main topics include property taxes, the application of “force majeure” clauses to escape contractual obligations and relief from commercial mortgage backed securities loans.
The tax man will cometh
Property taxes are, and the possibility of relief from them, are important subjects for Patel’s clients. In a March 27 property tax podcast he conducted with the firm’s Senior Associate Attorney Kathlyn Hufstetler on the tax situation in Texas, the question was raised about whether this year’s taxes would be collected.
There are a lot of discussions being held about 2020 property taxes, Patel said. For one thing, all property tax values for 2020 listed in the state’s plan are dated as of Jan. 31.
“As of Jan. 31, most businesses were not impacted by the coronavirus or COVID-19, so therefore you would not really see a lot of impact negatively or downward assessment on your 2020 taxes,” he said. “However, lots of counties are taking this into consideration and know that you will have a problem paying your taxes when they become due later in the year or Jan. 31, 2021.”
It’s still too early to say what solutions are out there yet, but they are monitoring the situation, Patel said.
“More will be known as time passes what will happen for 2020,” he said.
Of course, Patel said, property tax laws are different from state to state.
“I do think a lot of commonalities will apply when it comes to property tax and different tax-related issues in that we’re doing everything we can as a country to pump dollars back to business owners, but at some point it’s going to come from somewhere, right?” he said. “We know that, and it’s going to come in the form of taxes at some point, whether that’s income taxes, sales tax, property taxes, occupancy taxes, whatever you call it it’s going to come back.”
Hotels should be aware of that so they can mitigate the impact on their bottom lines.
“I see state sales tax across the country probably starting to increase. I think property taxes will probably start to increase as well,” he said.
Acts of God
Another possible source of relief, but one with possible legal complications, is the “force majeure” clause found in most contracts. The clauses, also known as “Act of God” clauses, essentially state that certain unforeseen events or circumstances can occur that are beyond control and may excuse or suspend a party’s obligations under the specific contract, according the Patel|Gaines website.
“They call them an ‘Act of God’ provision because it’s for something that was out of the breaching party’s control,” Patel said. “But is the pandemic an act of God? Would that negate my requirements to fulfill my contracts?”
The force majeure clause can include specific legal procedures for invoking its protection, including providing notice that it has occurred, spelling out how it might affect performance and taking steps to mitigate that impact. But actually implementing the clause encompasses accounting for many different circumstances that may or may not be spelled out.
“Let’s say you have a hotel with a big banquet hall and you had agreed to do a wedding. What if they still wanted to do the wedding and you’re not able to do it?” Patel said. “What if you’re not able to provide the food and services necessary. What if you and the other party don’t want to do it and they’re asking for a refund and you’re telling them it’s a credit?”
In other cases, he said, many hotels have leasing agreements with restaurant owners that they can no longer honor because the hotel is closed.
“Those are the types of things where force majeure is starting to come up. A lot of people are having questions about it,” he said “Generally I call it a ‘It depends’ legal argument, but it truly does depend on how it’s crafted and what the situation it’s being brought up in.”
Furthermore, nobody alive has lived through a major pandemic like this, he said.
“When was the last time something like this has come up? I think that’s where a lot of litigation will stem from,” Patel said. “I see, more or less, right now people trying to find ways to better their business situation regardless of what side they’re on.”
Business interruption coverage may not come through
Some hotel owners may be planning to cash in on business interruption insurance policies. Don’t count on it, Patel said.
“I think that there are probably some strong legal provisions that state that your insurance should or does cover this type of situation. But the flip side to that is, whether it says that or not, or whether it’s covered or not, isn’t really the situation. The situation is how long is it going to take for you to find relief under that?” he said. “Do you believe that insurance companies are going to bend over and say ‘Hey, $20,000, let’s just pay the claim.’ No, because there’s going to be thousands of claims. I told someone that it might not be a bad angle to pursue, but if you’re relying on that to come in next month then you’ve got a problem.”
Actually getting paid by the insurance companies will probably take five years and legislative as well as legal action, he said.
“You better rest assured that the insurance company lobbying arm is bigger than most, so you can expect them to argue and lobby pretty hard that business interruption doesn’t apply to a national pandemic such as this,” Patel said.
More complicated than you think
The firm’s website also contains a checklist of documents a hotel may need to seek relief from commercial mortgage backed securities loan. However, CMBS loans are more complicated than regular loans, as discussed in a recent AAHOA webinar featuring Peter Berk, president of PMZ Realty Capital LLC Hotel Finance Group.
“CMBS is going to be more of a challenge right now. You have to work through servicers, you have to work through special servicers. It’s not like your local bank,” Patel said. “When there’s a downturn in the economy, people are not going to be ready for what will happen because they haven’t really understood CMBS loans.”
Patel wrote an article in 2018 on the potential for problems with the CMBS loan market. One issue was the highly structured cash management process that comes with a CMBS loan that may not appear to be a problem while the economy is good and the hotel owner can make their payments.
“But if the hotel suffers a downturn, the lender essentially takes control of cash flow until it returns to pre-set levels. In short, the CMBS borrower gives up a lot of control over the property’s finances,” Patel wrote.
And a CMBS borrower can be considered in default even if they are making their monthly payment if their debt service coverage ratio drops too low.
“Certainly, we’ve all seen what can happen when excessive optimism mixes with excessive leverage,” he wrote.
At the end of the article, Patel concluded that hoteliers consider “funding channels that are more suited to the world of 2018” when the threats to the industry came from over supply and OTAs. In the world of the current pandemic, many may wish they had heeded that advice.
“Many of the lodging folks haven’t really understood how CMBS loans are structured, they just believe it’s a normal loan,” he said. “They’re not a normal loan. [Some hoteliers are] not ready for this.”
A PETITION FOR a referendum on Los Angeles’s proposed “Olympic Wage” ordinance, requiring a $30 minimum wage for hospitality workers by the 2028 Olympic Games, lacked sufficient signatures, according to the Los Angeles County Registrar. The ordinance will take effect, raising hotel worker wages from the current $22.50 to $25 next year, $27.50 in 2027 and $30 in 2028.
Mandatory health care benefits payments will also begin in 2026.
The L.A. Alliance for Tourism, Jobs and Progress sought a referendum to repeal the ordinance, approved by the city council four months ago. The petition needed about 93,000 signatures but fell short by about 9,000, according to Interim City Clerk Petty Santos.
The council approved the minimum wage increase for tourism workers in May 2023, despite opposition from business leaders citing a decline in international travel. The ordinance requires hotels with more than 60 rooms and businesses at Los Angeles International Airport to pay workers $30 an hour by 2028. It passed on a 12 to 3 vote, with Councilmembers John Lee, Traci Park and Monica Rodriguez opposed.
The L.A. Alliance submitted more than 140,000 signatures in June opposing the tourism wage ordinance, triggering a June 2026 repeal vote supported by airlines, hotels and concession businesses.
AAHOA called the ruling a setback for Los Angeles hotel owners, who will bear the costs of the mandate.
"This ruling is a major setback for Los Angeles' small business hotel owners, who will shoulder the burden of this mandate," said Kamalesh “KP” Patel, AAHOA chairman. "Instead of working with industry leaders, the city moved forward with a policy that ignores economic realities and jeopardizes the jobs and businesses that keep this city's hospitality sector operating and supporting economic growth. Family-owned hotels now face choices—cutting staff, halting hiring, or raising rates—just as Los Angeles prepares to host millions of visitors for the World Cup and 2028 Olympics. You can't build a city by breaking the backs of the small businesses that make it run."
Laura Lee Blake, AAHOA president and CEO, said members are proud to create jobs in their communities, but the ordinance imposes costs that will affect the entire city.
“Even with a delayed rollout, the mandate represents a 70 percent wage increase above California's 2025 minimum wage,” she said. “This approach could remove more than $114 million each year from hotels, funds that could instead be invested in keeping workers employed and ensuring Los Angeles remains a competitive destination. The mandate increases the risk of closures, layoffs and a weaker Los Angeles."
A recent report from the American Hotel & Lodging Association found Los Angeles is still dealing with the effects of the pandemic and recent wildfires. International visitation remains below 2019 levels, more than in any other major U.S. city.
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AHLA Foundation is partnering with ICHRIE and ACPHA to support hospitality education.
The collaborations align academic programs with industry workforce needs.
It will provide data, faculty development, and student engagement opportunities.
THE AHLA FOUNDATION, International Council on Hotel, Restaurant and Institutional Education and the Accreditation Commission for Programs in Hospitality Administration work to expand education opportunities for students pursuing hospitality careers. The alliances aim to provide data, faculty development and student engagement opportunities.
Their efforts build on the foundation’s scholarships and link academics to workforce needs, AHLA said in a statement.
"We're not just funding education—we're investing in the alignment between academic learning and professional readiness," said Kevin Carey, AHLA Foundation president and CEO. "These partnerships give us the insights needed to support students and programs that effectively prepare graduates to enter the evolving hospitality industry."
ACPHA will provide annual reports on participating schools’ performance, enabling the Foundation to direct resources to programs with curricula aligned to industry needs, the Foundation said.
Thomas Kube, incoming ACPHA executive director, said the partnership shows academia and industry working together for hospitality students. The collaboration with ICHRIE includes program analysis, engagement through more than 40 Eta Sigma Delta Honor Society chapters and faculty development.
“Together, we are strengthening pathways to academic excellence, professional development and industry engagement,” said Donna Albano, chair of the ICHRIE Eta Sigma Delta Board of Governors.
Fragmented systems, poor integration limit hotels’ data access, according to a survey.
Most hotel professionals use data daily but struggle to access it for revenue and operations.
AI and automation could provide dynamic pricing, personalization and efficiency.
FRAGMENTED SYSTEMS, INACCURATE information and limited integration remain barriers to hotels seeking better data access to improve guest experiences and revenue, according to a newly released survey. Although most hotel professionals use data daily, the survey found 49 percent struggle to access what they need for revenue and operational decisions.
“The Future of Hotel Data” report, published by hospitality data platform Hapi and direct booking platform Revinate, found that 40 percent of hoteliers cite disconnected systems as their biggest obstacle. Nearly one in five said poor data quality prevents personalization, limiting satisfaction, loyalty and upsell opportunities.
“Data is the foundation for every company, but most hotels still struggle to access and connect it effectively,” said Luis Segredo, Hapi’s cofounder and CEO. “This report shows there’s a clear path forward: integrate systems, improve data accuracy and embrace AI to unlock real-time insights. Hotels that can remove these technology barriers will operate more efficiently, drive loyalty, boost revenue and ultimately gain a competitive edge in a tight market.”
AI and automation could transform hospitality through dynamic pricing, real-time personalization and operational efficiency, but require standardized, integrated and reliable data to succeed, the report said.
Around 19 percent of respondents cited communication delays as a major issue, while 18 percent pointed to ineffective marketing, the survey found. About 10 percent reported challenges with enterprise initiatives and 15 percent said they struggled to understand guest needs. Nearly 46 percent identified CRM and loyalty systems as the top priority for data quality improvements, followed by sales and upselling at 17 percent, operations at 10 percent and customer service at 7 percent.
Meanwhile, hotels see opportunities in stronger CRM and loyalty systems, integrated platforms and AI, the report said. Priorities include improving data quality for personalized engagement, using integrated systems for real-time insights, applying AI for offers, marketing and service and leveraging dynamic pricing and automation to boost efficiency, conversion and profitability.
“Clean, connected data is the key to truly understanding the needs of guests, driving amazing marketing campaigns and delivering direct booking revenue,” said Bryson Koehler, Revinate's CEO. “Looking ahead, hotels that transform fragmented data into connected data systems will be able to leverage guest intelligence data and gain a significant advantage. With the right technology, they can personalize every interaction, shift share to direct channels and drive profitability in ways that weren’t possible before. The future belongs to hotels that harness their data to operate smarter, delight guests and grow revenue.”
In June, The State of Distribution 2025 reported a widening gap between technology potential and operational readiness, with many hotel teams still early in using AI and developing training, systems, and workflows.
Hyatt partners with Way to unify guest experiences on one platform.
Members can earn and redeem points on experiences booked through Hyatt websites.
Way’s technology supports translation, payments and data insights for Hyatt.
HYATT HOTELS CORP. is working with Austin-based startup Way to consolidate ancillary services, loyalty experiences and on-property programming on one platform across its global portfolio. The collaboration integrates Way’s system into Hyatt.com, the World of Hyatt app, property websites and FIND Experiences to create a centralized booking platform.
World of Hyatt members can earn and redeem points on experiences booked through Hyatt websites, including wellness programs, cultural activities, ticketed events and local collaborations, the companies said in a statement. Members can also access FIND Experiences, which includes activities and auctions where points can be used to bid on events.
"In our search for an on-brand platform to power experiences and tap into ancillary revenue opportunities, Way's collaboration has been a true unlock for us," said Arlie Sisson, Hyatt’s senior vice president and global head of digital. "After a thorough evaluation of potential solutions, Hyatt chose Way to power the next chapter of our digital strategy by streamlining operations, elevating brand differentiation, enhancing personalization and, most importantly, delivering care at every touchpoint in the guest journey."
The Way initiative spans Hyatt’s portfolio, covering cabana rentals, in-room amenities and partnerships with local providers, the statement said. Way’s technology supports real-time translation, more than 100 currencies, multiple payment methods and data insights to help Hyatt manage operations globally.
"Hyatt set a high bar and Way is proud to bring their vision to life," said Michael Stocker, Way’s co-founder and CEO.
"The platform supports enterprise needs while preserving the guest experience."
U.S. CMBS delinquency rate rose 10 bps to 7.23 percent in July.
Multifamily was the only property type to increase, reaching 6.15 percent.
Office remained above 11 percent, while lodging and retail fell.
THE U.S. COMMERCIAL mortgage-backed securities delinquency rate rose for the fifth consecutive month in July, climbing 10 basis points to 7.23 percent, according to Trepp. The delinquent balance reached $43.3 billion, up from $42.3 billion in June.
Trepp’s “CMBS Delinquency Report July” showed multifamily led the increase, with its delinquency rate rising 24 basis points to 6.15 percent. Lodging fell 22 basis points to 6.59 percent and retail declined 16 basis points to 6.90 percent. Office delinquencies edged down to 11.04 percent after hitting a record 11.08 percent in June.
Loan-level analysis showed $4.4 billion in loans became newly delinquent in July, exceeding $3 billion that cured. Mixed-use, retail and office each accounted for more than $800 million of newly delinquent loans.
The seriously delinquent share, 60+ days, foreclosure, REO, or non-performing balloons, rose to 6.93 percent, Trepp said. Excluding defeased loans, the overall delinquency rate would be 7.41 percent.
A separate report from Lodging Econometrics showed the global hotel pipeline at 15,871 projects, up 3 percent year-over-year, totaling 2,436,225 rooms, up 2 percent.