Partner Todd Soloway, Chair of Pryor Cashman’s Real Estate Litigation Group and Co-chair of its Hotel & Hospitality practice, co-authored the New York Law Journal article entitled “Marriott/Starwood Merger: Good for Brands, Not Owners” which appeared in the December 2, 2015 issue.

The announced $12.2 billion acquisition of Starwood Hotels and Resorts by Marriott will unite two of the top 10 largest international hotel operators, creating the world’s largest hotel operator, with more than 5,500 hotels and 1.1 million rooms worldwide. Although an exciting prospect to many, this combination may present serious concerns for current owners of Marriott and Starwood-branded hotels, cutting to the very core friction between owners and operators in the hotel industry—how loyal are the brands to their owners?

Soloway notes that owners may now be faced with increased competition within their own brand umbrella and will have their hotels managed by an organization with whom they may have consciously chosen not to do business. So, what now?

As the transaction between Marriott and Starwood makes apparent, having well-tailored contract provisions setting forth the operator’s duty of loyalty, which are then secured with favorable radius clauses and anti-assignment provisions, are crucial to protecting an owner from a manager whose fundamental interests and motivation can diverge with the owner’s subsequent to execution of a management agreement.

To read the entire article, please click here.