Check-in - January 2019
Written By
Of Counsel
UK
I am a member of the Real Estate Group at Bird & Bird. I have many years' experience in real estate transactions and I also lead Bird & Bird's international Hotels, Hospitality and Leisure team, specialising in the acquisition, development and disposal of all types of hotels, from budget to luxury and in the negotiation of hotel management agreements.
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Welcome to your quarterly newsletter from Bird & Bird's Hotels & Leisure team
We are delighted to share the first edition of Check-in, which is launching one year after Karen Friebe joined Bird & Bird to lead our international Hotels & Leisure team.
The newsletter will focus on hot topics and legal developments impacting on various aspects of the sector. It will also feature Market Spotlights, where we will provide insight into particular international markets, highlighting local trends and industry updates.
At the end of the newsletter, you can also find details of some of our upcoming events and recent news, which we think might be of interest to you and your team.
Please get in touch if you would like to discuss any of the issues raised in these articles, or visit our webpage for more information about Bird & Bird's Hotels & Leisure team.
Technology
New technologies in the hotel sector
The days of rummaging around in your bag for your plastic hotel room key card may be over. New technologies are presenting fantastic new opportunities in the hotel sector, but it is important that they are used carefully - both from a legal and commercial perspective. We take a closer look at three new technologies that are on the up in the hotel sector: virtual assistant, self-service check-in and mobile keys, and personalisation.
The potential implications of blockchain on the hotel sector
There is no doubting that blockchain technology is still in its infancy. Commentators have compared the current state of blockchain technology to the internet in the early 2000s.
Whilst the internet was clearly a revolutionary concept at the time, nobody could have predicted the scale with which it has grown, and the use-cases that have evolved in the past 15-20 years. In the same vein, the potential use cases of the blockchain are almost limitless.
In the hotel and leisure industry, even at this early stage of its lifecycle, there are a number of areas where the technology could have a real impact (and, in some cases, has already begun to showcase its potential.) We have touched upon a few possible areas in this article.
Food & Beverage
Food allergens labelling requirements in hospitality services
Food allergies are a common but serious issue that may have life-threatening consequences, and for that reason regulatory measures are in place that are intended to make sure consumers are aware of the presence of allergens in foods they consume. In hotels and resorts, food is served to customers in various settings: restaurant areas, room service and snack dispensers are a few examples of places where customers have the possibility to purchase food, which means there are many situations in which customers may get exposed to an allergy hazard.
An interview with Simon Prideaux of VQ Limited
The Bird & Bird Real Estate team undertakes a lot of work for VQ Limited, a London-based restaurant brand which has a number of USPs. Associate Emma Brindley-Raynes recently interviewed Simon Prideaux, Managing Director of VQ Limited, to get his insights into current market trends in the F&B sector and the company's strategy in the pre-Brexit economic climate.
Employment & Immigration
New employers liability for National Minimum Wage underpayments after TUPE transfer
HMRC has confirmed that it will now enforce outstanding liabilities and penalties for failing to pay the National Minimum Wage (NMW) to employees subject to a TUPE transfer against their new employer – the transferee.
NMW compliance is a particular problem in the hotel sector, with hospitality employers near the top of the list of offenders published by HMRC in 2018. This change in practice will therefore be of particular importance to businesses looking to acquire hotels.
Low Pay Commission names hospitality employees most likely to be underpaid
The Low Pay Commission has recently published its independent report on underpayment of the National Minimum Wage (NMW) during 2017/18. The Commission found that over 200,000 workers were underpaid by a cumulative total of £15.6m in this year.
The report states that it is estimated that the hospitality sector continues to have the highest number of jobs paid below the minimum wage, at around 54,000.
Post-Brexit EEA migration in the hospitality sector
In December 2018, employers and EU citizens welcomed the UK Government's White Paper on immigration, which detailed their vision of a future migration landscape providing the basis for the hospitality sector to employ workers from abroad, after Brexit.
Set against a backdrop of speculation and uncertainty, the White Paper is a valuable roadmap of post-Brexit policy for employers and workers alike. Although the highly anticipated policy document is not binding on future legislation, it is considered to be the substantive basis for a Bill.
Data Protection
Data and cyber breaches - a new risk landscape
Not all 2018 data protection planning was about GDPR compliance programs. Those who operate hotels and those whose brands or buildings are used in such operations also need to consider what contractual obligations are appropriate between them.
The BA and Marriott breaches highlight the potential risks posed by group litigation and by GDPR and NIS Directive fines, and the need for those in the Travel and Hotel & Leisure sectors to ensure that their compliance programs were set broadly enough to cope with all three.
Tax
Key considerations for hotels in light of recent HMRC announcements
HMRC Policy change regarding the VAT treatment of retained payments:
On 14 December 2018, HMRC announced a change to its policy on the VAT treatment of payments for unfulfilled supplies (i.e. a deposit for a hotel room that the customer fails to make use of). Under the new policy that will take effect from 1 March 2019, HMRC will seek to recover the VAT on all cancellation fees, deposits and no show charges (unless the customer receives a full refund).
Profit Diversion Compliance Facility ("PDCF"):
On 10 January 2019, HMRC announced a new voluntary disclosure facility that gives companies an opportunity to disclose and correct any tax inaccuracies relating to profits diverted out of the UK. The PDCF is intended to encourage companies, such as multinational hotels, to review their current cross border arrangements and provides them with the opportunity to bring their UK tax affairs up to date by making a disclosure and paying any tax liabilities and penalties where errors are identified.
Market Spotlight: Spain
Hotel investment in Spain
The importance of hotel investment in Spain is unquestionable, as evidenced by recent data and statistics. Year after year the specialized press highlights the healthy market situation in Spain, and recent research of Colliers International shows that 2018 concluded with the new record of 4.8 billion euros in hotel investment.
Our Spanish Hotels & Leisure team looks at recent market activity and some investment forecasts for the year ahead.
Interview with Laura Hernando of Colliers International Spain
Our Spanish Hotels & Leisure team takes a look at the Spanish hotel sector with Laura Hernando, Managing Director of the Hotels Department at Colliers International Spain.
Laura advises on hotel sales, as well as on the sale/purchase of debt portfolios secured by hotel assets and company sales. She has experience in structuring financing for the acquisition and development of hotels, in financial restructuring for hotel and real estate groups and in strategic consultancy for companies with hotel investments, including the negotiation of management contracts with hotel chains.
News & Events
Meet the team at this year's Hotel Investment Forum in Berlin
Members of our international Hotels & Leisure team will be at the IHIF in March - we hope to see you there!
Watch the first in our new series of video blogs addressing key developments and issues facing hotels
In the first video blog, sector head Karen Friebe speaks with Employment associate Alison Dixon, who provides insight into some of the issues currently facing employers in the Hotels & Leisure sector.
You can watch the video here.
Save the date for our "Fuelling Productivity" conference with EP Magazine on 16 May
The conference, taking place at Bird & Bird's London office on 16 May, will showcase the power of food in daily life. We will be joined by speakers from the hospitality sector and beyond, who will explore the concept of "health is the new wealth."
Register your interest here and you will receive an invitation nearer the time.
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