De/Re Flagging in the Hotels Industry

CMS and Drees & Sommer are delighted to invite you to our upcoming Hotels sector event.

The past 18 months have seen some high profile cases where the brand over the hotel door has been changed. Where the brand has been removed, this is referred to as “de-flagging”, and where it has been swapped for another brand, this is “re-flagging”.

There are a variety of drivers for this – sometimes operators look to rebrand under a different flag within their portfolio which may be better suited to the asset and location. Other times the owner might drive the change as a result of either the operator not performing as expected, or the owner believing that an alternative operator, or even the owner itself, could perform better. One consequence of this is that owners are now taking a more considered view of the terms they are willing to agree with operators, to build in more flexibility on the owner’s side to drive change and maximise potential of their assets during the life of the hotel.

This session takes a closer look at what is driving this change and the financial, practical and legal implications of de-flagging or re-flagging a hotel. We also take the opportunity to provide some updates on digitisation in the hospitality sector, and examine some common issues arising in relation to the latter stages of construction of hotels.