Cendant Drops Sponsorship Of AAHOA, Disagrees With Direction Association Is Taking

ATLANTA? In the wake of Cendant Corp.?s recent withdrawal as a founding sponsor of the Asian American Hotel Owners Association, association leadership expressed remorse over the company?s actions. ?It?s with regret that Cendant withdrew membership,? said Mike Patel, chairman of AAHOA. ?We regret that they will not support AAHOA?s educational mission, which is to represent the 12 fair franchise issues. Regarding Cendant?s financial support of the association, Patel said the ?effect will be immaterial to AAHOA?s activity.? Several days before AAHOA held its annual conference here, Cendant officials mailed out a letter to association members citing AAHOA?s deviation from its mission statement as cause for withdrawal. ?We cannot and will not support an organization that has lost sight of its mission and turned its focus to interference of the business and contractual relationships between us and our valued customers (our licensees),? the letter stated, which was signed by each president of Cendant?s eight hotel brands. Patel downplayed Cendant?s claims, stressing that ?we are well within AAHOA?s mission statement.? Eric Pfeffer, chairman and CEO of Cendant Hotel Division, said there have been several instances when AAHOA leadership has interfered with ?our business? by interceding between Cendant and its franchisees. The association leadership has also publicly criticized the business practices of Cendant in ?very unprofessional? ways, Pfeffer added. Pfeffer said the company has struggled with this issue for several weeks. Although there is ?no single straw that broke the camel?s back,? Pfeffer said a recent survey of AAHOA members severely strained Cendant?s relationship with AAHOA leadership. The survey, which was published early this year, indicated that almost half of the respondents were unhappy with their decision to buy a franchise. Of the 3,000 members surveyed, 259 responded. During a press conference to announce the results of the survey, Patel said franchisee woes can be directly attributed to the hotel companies. It was this type of public griping that made it easier for Cendant to pull its membership, Pfeffer explained. ?So the message is clearly that they have crossed the line,? Pfeffer said. ?They lost sight of their mission. However, we do have excellent relationships with our licensees. And we believe a majority of [AAHOA]?s members agree with us. But as a group they probably will stick together. It?s unfortunate.? At presstime, Patel said the association was in the process of polling its members to gauge their opinions on Cendant?s actions. Although most association members withheld comment about Cendant?s policy during the conference, the overall mood was one of surprise, noted one industry observer. Speaking Bluntly Since Patel has led the association, AAHOA has stepped up its advocacy role by urging members to enter agreements that are in line with the association?s fair franchising principles. The association was formed 10 years ago to address issues of discrimination against Asian-American hoteliers. Cendant is one of 37 founding sponsors, which include AT&T, Bass Hotels & Resorts, Choice Hotels International and US Franchise Systems. Pfeffer stressed that its actions are directed toward AAHOA leadership, and not at its members. ?We will continue to listen to our customers and strive continually to enhance our relationships,? the letter stated. ?We will not, however, permit any third party to intercede between our licensees and their Brand.?

Comments are closed.