NABCA 18th Annual Symposium on
Alcohol Beverage Law & Regulation
Regulating the Non-Traditional Business:
A Hotel Management Company’s Perspective
David Manderscheid
Vice President & Assistant General Counsel
Marriott International, Inc. Law Department
March 8, 2011
The Common Goals of NABCA and Marriott
•
Safe and legal sale and service of
alcohol by retailers
•
Responsible consumption of alcohol by
guests and patrons
What makes a Marriott hotel a unique alcohol outlet?
•
Our guests typically do not leave our
premises after being served.
•
Our hotels have a general duty to take
reasonable steps to protect the safety
and security of our guests.
•
Marriott’s founding principle: “Take
good care of your employees and they'll
take good care of your customers, and
the customers will come back.”
Marriott’s U.S. Operations w/Alcohol Beverage Sales
•
More than 700 Marriott-operated
properties
•
With more than 1,400 licenses
•
In more than 40 jurisdictions
Marriott’s Compliance Efforts: Legal Resources
•
In-House Legal Resources:
5 individuals provide approximately 2.5
to 3.0 full-time equivalent (FTE) paralegal
support, under supervision of a senior
manager and an attorney.
•
Outside Legal Resources:
More than 30 law firms specializing in
liquor law represent Marriott on an
annual basis.
Marriott’s Compliance Efforts: Mandatory Alcohol
Awareness Programs
•
Marriott is committed to the safe and lawful
service of alcoholic beverages.
•
Marriott requires that all associates who sell,
serve, or supervise those who sell or serve
alcohol receive formal training in the
responsible services of alcohol.
•
This training is provided by TIPS (Training for
Intervention ProcedureS) and other nationally
or regionally recognized training programs,
such as those recommended by local or state
government liquor licensing regulatory
agencies or local police departments.
Two Recurring Compliance Challenges
1.
Identifying the party to hold the liquor license.
•
Is it Marriott, the “owner” of the business, the party
that selects, trains and employs the alcohol servers
and has exclusive supervision, direction and control
over hotel operations?
•
Or is it the “owner” of the hotel asset, the party that
contracts with Marriott to run Marriott’s self-branded
lodging and F&B operations at that location? If so,
who is that “asset owner”? See attached sample
ownership chart.
Sample Ownership Chart
Fund
Investors
Profitable Hotel
Investments
LLC
2%
98%
Profitable Hotel
Investors LP
(Fund)
100% OF
COMMON
STOCK
Profitable Hotel
Investments LLC
Profitable Hotel
Investors Trust
2%
MI Investor
LLC
90%
8%
Profitable
Hotel
Investors LLC
100%
PHI MI
Lessee Holding
LLC
100%
PHI
Hotel
LLC
100%
PHI
Hotel
Lessee
LLC
Operating
Lease
Two Recurring Compliance Challenges
2.
Adapting to the evolving nature of the business.
•
For centuries, lodging establishments were mostly
small inns in towns and along roadsides.
•
The first half of the 20th century gave rise to large,
urban hotels with full-service restaurants and bars.
•
In the last two decades of the 20th century, there has
been an explosive growth of medium-sized hotels with
limited F&B that have blurred the line between a bar, a
restaurant, and an off-premise outlet.
•
In the first decade of the 21st century, numerous new
mixed use developments have blurred the line between
a hotel, a residential condominium and a time-share.
The Common Goals of NABCA and Marriott
•
Safe and legal sale and service of
alcohol by retailers
•
Responsible consumption of alcohol by
guests and patrons
NABCA 18th Annual Symposium on
Alcohol Beverage Law & Regulation
Regulating the Non-Traditional Business:
A Hotel Management Company’s Perspective
David Manderscheid
Vice President & Assistant General Counsel
Marriott International, Inc. Law Department
March 8, 2011