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HB ON THE SCENE: Law Conference Examines Global Operations

Tuesday February 11th, 2014 - 5:42PM

HOUSTON—At the 2014 Hospitality Law Conference, held here at the Omni Houston Hotel, Bhavana Boggs, VP and assistant general counsel, The Ritz-Carlton Hotel Company, and Veronique Lanthier, senior counsel, Marriott International, Inc., discussed the problems and challenges associated with operating hotels overseas in a session titled “Operating in a Global Environment.” Banks Brown, a partner in McDermott Will & Emery LLP, moderated it.

“I’ve come to the conclusion that operating in a global environment is very much like having teenagers,” said Boggs. “It sounds great in theory, but there are unpredictable situations on a regular basis.”

Lanthier noted that even if a company has in-house counsel, they often can’t practice in these countries, so it’s “hugely important to get a local attorney.” She added that many of these emerging areas do not have well-developed franchise law, so it can be hard to gain clarity on issues. Lanthier also noted that it’s important to make sure you understand what the attorney/client privilege is in these countries. “In the U.S., privilege is sacrosanct, she said, “but overseas, that’s not always the case.”

Boggs noted that it’s also important to understand you’re dealing with different entities. “Even though an agreement says that the operator has complete control, the reality is significantly different there,” she said, noting that owners in many of these countries could very well be a king or a political leader. “They feel they should have more control,” she said.

Both noted that data privacy in the global market is a big issue for hoteliers. Lanthier said that in comparison to Europe, the U.S. is “pretty loose” when it comes to what is private and what isn’t. “In the EU, there is a directive in place that regulates the collection, the transfer, the storage and use of personal information,” she said. She noted that each EU country then took that directive and created its own law. “When you do business in the EU, you have to take into account the national law of the 28 member states in figuring out where your servers are, what your marketing is, what can go in an email blast. It can be an incredibly complicated thing,” said Lanthier. She noted that the EU is looking at making this uniform, taking the highest standard of the individual countries, which is supposed to go into effect in 2014, but may be delayed.

“It’s burdensome,” said Boggs, noting that a lot of the existing technology is not necessarily geared to deal with that. “It’s an enormous undertaking for a U.S. company. You have to be aware of how business is being conducted: not only where the data is gathered, but where it’s being transferred.”