Joshua Bernstein, Hospitality Sector Team Co-Chair, spoke to Hotel Business about the legal issues that the hotel industry is facing as a result of the COVID-19 pandemic. According to the publication, eight in 10 hotel rooms across the U.S. are empty, and 70 percent of hotel employees have been laid off.
Bernstein pointed out that in moving forward, hoteliers’ franchise and management agreements must include “obligations to operate, the effect of a closure on the duration of the agreement, the effect of the closure on performance tests, and any impact to the obligation to pay fees to the brand. Owners should also examine whether their agreements contain force majeure clauses and their impact on the obligations of the brands.”