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December 11, 2001
Entrepreneur Snaps Up Unused Hotel Credits For Resale To Meeting Planners
Combine a new idea with excellent timing, and you get MyHotelBroker, a company that offers a different twist on savings at hotels.
When an organization has to cancel an event, as is happening more frequently these days, the cancellation fee paid to a hotel is often kept as a credit that the group can redeem for future bookings within a certain time frame.
But many groups wind up never rebooking with the property, and so lose tens or even hundreds of thousands of dollars of credit. MyHotelBroker's patent-pending business model is to buy these credits and resell them, at a steep discount, to other groups.
Jay Fortgang, the founder, pays 10% to 40% of the total value of the credits, depending on factors like when they expire (within 12 months), and what they can be spent on. Another negotiable item is whether the seller of the credits receives cash up front, or only after the credits are sold by Fortgang.
The hotels have an opportunity to attract new customers, and they can demonstrate to holders of credits that they are doing everything they can to assist them out of their financial predicament. And they can obtain incremental revenue--the credit might bring a very attractive piece of business into the hotel.
Practical Business Thinking Overcomes Diplomatic Relations
Japan does not have diplomatic relations with North Korea. But that's not going to keep the two countries from launching a barter deal that makes sense for both countries.
Thinned wood and scrap wood from the Sea of Japan will be sent to North Korea by ship, and then the ship will be loaded with fine quality sea sand and river sand, which are no longer sufficient in Japan, for the return trip home.
Lawsuits Can Pave Way For Barter Transactions
When Alcoa Inc. agreed to buy aluminum-making rival Reynolds Metals Co., a pesky federal antitrust suit by McCook Metals, a smaller metal-maker, stood in the way. To settle, Alcoa delivered its Longview, Washington, aluminum smelter to McCook in exchange for dropping the litigation.
Indeed, these days such outcomes as cross-licensing provisions and the assignment of equity stakes frequently result from legal settlements.
"When you're dealing with business people, there's the opportunity to get things done that they wouldn't be able to get from the lawsuit itself," says Eugene Lynch, a retired federal judge in San Francisco who has been resolving cases for 40 years. (Lynch says 40% of his cases incorporate some type of non-cash solution into the settlement terms.)
Global Strategies Being Reassessed
Major companies around the world are carefully looking at their global plans, and the result is that cross-border mergers are down 50% since this time last year. And flows of direct foreign investment around the world are expected to drop this year by 40% from 2000.
Two noticeable exceptions in the slowdown are the NAFTA region and China--a new member of the World Trade Organization. (Investments that would have gone into many Asian countries is now flowing into China.)
Hopefully this slowdown is temporary, as global economic development will give poorer nations the chance to become something other than breeding grounds for frustration and violence.
Here And There. . .
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