Recognizing a Case For Lawsuits Over Bad Hotel Publicity

By Steven D. Weber Managing Partner, Stark Weber PLLC | June 10, 2018

Eventually every hospitality player is the subject of a negative news story, webpage, or some other source.  Such negative publicity may be the result of a disaster, an unfortunate occurrence, and possibly entirely of no fault of the hospitality industry player.  Evaluating how to respond to such events and circumstances is critical.  Maybe negative publicity cannot be entirely avoided, but are there circumstances when negative publicity is actionable such that any damage can be compensated for? 

Due to the internet, negative publicity may never be erased and may continue harming a hospitality brand for years to come.  Hospitality players - and all other business entities - need to understand their options when confronted with such circumstances. 

There are millions of stories in the news and on review sites about hospitality industry players.  Some of these stories or reviews take on a life of their own and can hurt a brand.  Claims may exist, like business defamation, disparagement, or tortious interference that may allow a hospitality brand to hold the maker of certain statements accountable for them.  Such claims may exist in the hospitality industry context.

In a federal case from California, Monterey Plaza Hotel v. Hotel Employees Local 483, the court recited allegations that one of the defendants filed unfair labor practice charges against the plaintiff.  In a newscast about the labor dispute, another of the defendants allegedly said that certain firings were illegal.  The plaintiff filed a complaint alleging a single cause of action for defamation against certain defendants alleging that the statement on the newcast "that the federal government had found that the firings were illegal was false and exposed plaintiff to 'hatred, contempt, and ridicule.'"  The plaintiff appealed from a lower court decision granting the defendants' motion to strike plaintiff's defamation complaint. 

On appeal, the appellate court sustained the striking of the defamation complaint.  The court reasoned that while the statement at issue could have been construed as false, the plaintiff had not met its burden of pleading a claim because the "plaintiff has failed to establish a prima facie case of slander in its pleadings and supporting declarations that defendants made a false statement with malice."  The court stated that "considering the broadcast as a whole, a viewer could not have reasonably understood [the defendant's] statement to mean that there had been a final determination that plaintiff had illegally fired the two employees."

In another case,  Hotel Saint George Assocs. v. Morgenstern, which was considered by a New York federal court, the plaintiff "alleged in its complaint that defendants have publicly and falsely accused plaintiff of failing to maintain adequate security at the Hotel and that defendants had worked to create a perception that there has been an increase in crime in and around the Hotel."  The plaintiff "alleged that these false accusations have resulted in damages reasonably believed to be in excess of seven million dollars."  Among other claims, the plaintiff asserted a defamation claim. 

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.