Lotteries. A lottery is generally defined as a promotion in which all three of the following elements are present: prize, chance, and consideration. Lotteries, except those that are state operated, are illegal under federal law and the laws of all fifty states. Lottery laws are enforced by the following:

The penalties for failure to comply with federal and local laws depend on the venue and may include: consumer redress, awarding multiple prizes, fines (may be significant), cease and desist orders from future promotions, and corrective advertising.

Sweepstakes. A sweepstakes is generally defined as a promotion involving the elements of prize and chance. That is, sweepstakes are promotions in which winners are selected at random to win a prize.

Consideration. Consideration can be monetary or non-monetary (i.e., a purchase or payment but also the expenditure of a substantial degree of effort that directly benefits the sponsor). There are many different ways to remove the element of consideration. In at least 33 states, statutes or case law clearly state or suggest that only monetary consideration will trigger a lottery law challenge; six states do not expressly limit the definition of consideration to a monetary requirement; the remaining states do not clearly define consideration. This is an evolving issue (e.g., not long ago, requiring internet access to enter a promotion was deemed consideration in some states). Current “hot topics” include text messaging, user-generated content and social networking sites which may require a fee or action on behalf of the entrant.

Alternative Method of Entry “AMOE”. A chance promotion with a viable, free AMOE which does not place the entrant at any real or perceived disadvantage vis-à-vis those who pay to play should not run afoul of lottery laws. Key considerations to avoid: (a) lack of universal availability; (b) separate deadline dates (especially problematic for mail-in entries); (c) separate prize pools; (d) disparity in number of chances to win; (e) insufficient number of free entry opportunities/methods; (f) real or perceived disadvantage to those who enter via AMOE; (g) burdensome entry requirements compared to purchase entries. The AMOE must have “equal dignity” to the purchase entries.

Contests. Contests are promotions in which winners are selected to win a prize on the basis of bona fide skill or objective criteria. Several state prize promotion/gambling laws prohibit requiring consideration, even in bona fide skill contests. In determining whether or not a promotion is a skill contest, states generally employ one of three tests: any chance test; dominant element test; material element test; or gambling instinct test. The hotel should focus on ensuring there are qualified judges and that any judging criteria applied to entries is objective.

Official rules. Official rules serve as the contract between the sponsor and the consumer. They are the most crucial element of any promotion and should include:

Abbreviated rules must appear in all advertisements, entry forms, and promotional materials. Procedural Requirements. Hotels considering a promotion should know that there may be registration requirements in AZ, FL, NY, and RI and bonding requirements FL and NY.

However, in using social media to promote one’s business, there are a number of pitfalls that one must avoid. Using social media in relation to a business is not the same as using it for personal, non-commercial use. While it may seem like everything online is fair game, it is not. Just because something is found online does not mean that it is ok to use. Trouble can and does arise rather quickly…

There are three primary legal considerations when using social media and they fall within the realm of intellectual property—copyrights, right of publicity and trademarks. Often times, it is difficult to distinguish whether you are using someone else’s intellectual property—one must be cautious not to do so when posting on social media. The issues with using someone else’s copyright, likeness and trademark in social media to promote one’s business is that one is profiting off of someone else’s property that does not belong to them and that can and does create a significant amount of conflict. Profiting from another’s property is what separates the use of social media in business from just personal use.

Copyrights protect works of authorship that are original and fixed in a tangible form or medium. This includes photographs, pictures, drawings, designs, songs, poems and other works. Many times, brand owners see pictures of celebrities out in public wearing their clothes on various blogs and websites. Although this can be extremely exciting for the brand owner, it is unwise to share these photos on social media without clearing it first.

Often times, those pictures found online are copyrighted. The photographers obtain copyright registrations for those photos and retain attorneys to protect their intellectual property. Attorneys have been known to use reverse image search software to find where those photos were posted online. If the photos appear on a business’s social media account, they will often times send a cease and desist letter and request compensation of $7,000 – $14,000. If you refuse to submit to their demands you will most likely be threatened with a lawsuit against you, or worse, they will just go ahead and file a lawsuit against you. Sadly, while it does seem disingenuous, many times they have a colorable case since their client has a copyright registration and their client’s photo was used without authorization for commercial purposes.

How does one avoid these situations? Determine where the photo came from. Get a license for the photo. Look to see if the photo is in the public domain. Do not just repost the photo. This happens not only with celebrity photos, but also with photos that appear to be stock photos online. Unless there is a license that comes with a photo, you should not use what you find online. Feel free to post all the photos you take, but be cautious when it comes to posting photos from unknown sources.

In addition to a potential copyright claim over the use of a celebrity’s photo, there could be a right of publicity claim. Right of publicity is the right to use one’s name, likeness or identity for a commercial purpose. It applies when someone uses a celebrity’s name, likeness or voice and can range anywhere from a picture or silhouette to a well-known quote. Thus, if you post a picture of a celebrity wearing your goods, a quote from them or anther item that would refer to them, it may create a false and misleading impression that they are endorsing your product. A famous person does not need to be alive for a claim to be made, their estate can still make the claim for them. The laws vary from state to state and the applicable law is determined by where the celebrity resides or died. In general, you should not use the image, name, likeness or even quotes from a celebrity to promote your products as it may cause a false impression that they have an affiliation with your company. If you would like to do that, contact them, speak with their agent and try to obtain a license or endorsement.

The last social media concern is trademarks. Trademarks protect brands and their identity. Trademarks can be a simple word, slogan, logo, design or even sound. Trademarks are used as source identifiers to help consumers identify where a particular product originates from.

Ideally, one does not wish to cause any confusion with another brand owner. Thus, in using social media, be aware of the potential trademarks of others. Do not use anyone’s brand name.1 There may be a funny slogan or brand name that you want to make a play on, but if there is a possibility consumers will immediately think of the other brand owner and be confused, then do not do it. It could cause the other brand owner to bring forth trademark infringement claims. It does not take much for someone to send a cease and desist letter.

In sum, while social media is a great marketing tool, exercise caution when using it. One must look to where they are obtaining their posts, pictures and inspiration from and one must review whether their post would cause any confusion with or false association with another. If there are any questions or potential confusion in one’s commercial use of social media, then it is best simply not to do it, but if you must, consult with an experienced attorney.

It is sometimes debated who actually was the pioneer who developed the first of what has become generally known as contemporary boutique hotels, in the United States. But clearly, the concept did not come from the mainstream hotel industry. Depending on to whom you talk, Ian Schrager, starting with Morgan’s Hotel in New York, gets the credit; others will say that Bill Kimpton was the founder, converting broken down old small hotels in San Francisco into “gems”, with “hot” restaurants next door.

However, the “winner” may very well have been a gentleman by the name of Ashkenazy, who converted several vintage apartment buildings in the West Hollywood district of Los Angeles into genuine, high style boutique hotels back in the 1970’s; one of which was the original Mondrian on Sunset Boulevard, now one of the most notable and successful boutique hotels owned by the Morgans Group, and originally redeveloped by Ian Schrager.

All three of these gentlemen were visionaries, highly creative, and none came from either a hospitality or even corporate background. Also, the hotel industry at large was moving in an entirely different direction; but these entrepeneurs weren’t taking notice. They were following their passions and instincts, with no track record or “feasibility studies” to support their initial projects. Many of the properties weren’t instant successes, but these hoteliers pressed on nonetheless, knowing that they were onto something that would bear fruit in the years to come.

What’s most noteworthy, however, is that the ultimate success of the segment that these brave men launched arguably was derived from an entrepeneural vision of one individual; as opposed to flowing from a corporate, risk-averse, large public, or even private, hotel company. The idiosyncracies that made at least a couple of these hoteliers challenging with whom to deal, were the same ones that were vital to the singular vitality and innovation of their respective products. The concepts were not formed by committees, work groups, or brand teams, as they typically are today. Despite the obvious advantages of “group think”, and gleaning opinions and recommendations from a variety of people with complementary disciplines, I would contend that at the end of the day the final result may not have the leading edge ‘push the envelope’ attributes of those derived from one brilliant, take no prisoners, pioneer, with no shareholders of Boards of Directors to whom to account.

For most of the period during which the boutique hotel concept was forming and growing, the industry at large generally regarded this product type as an oddball, replete with challenges that the legacy chains found to be too daunting to take on. The conventional wisdom maintained that boutique hotels were: too small to be truly profitable, couldn’t stamp them out and thus too expensive to build, couldn’t compete effectively with a chain affiliation’s marketing clout, difficult to finance, didn’t perform as well in an economic downturn, etc. So the chains allowed the niche operators to dominate this segment, while they watched from the sidelines.

To most of the chains, the byword was “segmentation” and branding; clarity of delineation of brand attributes to the consumer who, they felt, wanted and expected “no suprises”. Their first priority was to create sub-brands in specific segments (limited service, extended stay, hard budget, etc) offered by their big name competitors. The chains were for the most part playing ‘follow the leader’, as opposed to undergoing groundbreaking efforts to create new and highly unique lodging products that could appeal to a hidden target customer that would flee the big box hotels in large numbers, if they had a choice. That’s not to say that there wasn’t innovation going on; there certainly was. The Courtyard concept redefined limited service in its time; Embassy Suites went against the developer’s conventional wisdom of squeezing as many keys as you can into a site, opting for creating a more residential and spacious experience for its customers, as well as inventing the free cocktail hour/breakfast concept; all of which presented significant ‘value added’ for both the mid level corporate as well as family leisure traveler, to great success. But “cool”, hip, non-flagged hotels, with trendy, free-standing, and stylish restaurants and bars; with less than 200 rooms worth of revenue to flow to the bottom line? No thank you! Meanwhile, Schrager and Kimpton hotels were slowly, under the radar screen, grabbing up market share and their own customer “brand loyalty”, resulting in Revpar indexes in many markets heading north of 100% against competitive sets made up of the full service chain brands.

But not everyone was just watching and waiting. Barry Sternlicht saw the potential of combining the allure of the lifestyle concept with the marketing and financial clout of a large hotel company. So Barry followed his vision and created W; and in the process, defied and proved wrong the Kimpton and Schrager mantra that boutique hotels and a hard brand could not co-habitate successfully.

The W phenomenon proved that, under the right circumstances, a successful niche lifestyle brand could be developed and rolled out by a large, brand-oriented hotel organization. As a result, some of the legacy chains have now hit the drawing boards to design their own lifestyle brands, so as not to be left in the dust by continuing to ignore this product type; with its success being fueled by ever more sophisticated and affluent travelers with time and money on their hands; yes, the famous ‘baby boomers’ and ‘gen-exers’; the key target lifestyle hotel consumers, who are now coming out of the woodwork as a dominant consumer of literally every type of product and service, in addition to travel and leisure.

However, I would challenge the big boys to take care regarding how they develop, and who is made responsible for developing their lifestyle hotel prototype. Designing a brand that can compete successfully with the W’s and Kimptons of the world requires a change of mindset and approach. This task is far different from creating the brand which is, for the most part, a variant of the traditional hotel product. It is a leap of faith to believe that the same executive team that has made a living rolling out and operating legacy brands can all of a sudden reinvent themselves and magically alter what may be their more traditional viewpoint of the industry. Everyone knows that the pioneers within Kimpton, now the dominant player in the segment, most of which are still with the company, were, for the most part, home-grown entrepreneurial types who left the chains to follow Bill Kimpton’s vision ; and no one would accuse Ian Schrager’s original team of being conventional hoteliers.

Many people don’t realize that W was not born from the Sheraton and Westin brand teams, but from a hand-picked group of “outsiders” that operated virtually independently from the White Plains team, and taking direction from Barry himself. In fact, many of the people initially responsible for designing the look and feel of W were from the lifestyle retail industry, from companies such as Pottery Barn, as Barry felt that retail and fashion veterans were inherently more creative and marketing savvy than many of their hotel industry counterparts. Who knows what W would have become if Barry didn’t take this “hothouse” and groundbreaking approach to birthing this brand?

So, I would suggest that the legacy chains not ignore the unique dynamics, as well as the profiles of the people themselves, that have been behind the successful evolution of the lifestyle segment. I would take a long, hard look in the mirror, and take inventory of the tools in their company’s toolbox before embarking on developing a boutique brand. After all, hammers and nails are great for building a house, but won’t work too well for carving a sculpture. The same brand attributes that attract the traditional corporate “road warrior” and family leisure customer don’t cut it for the prototype lifestyle hotel target demographic It will take more than an interesting design package, and young employees dressed all in black, to lure away loyal customers from the dominant boutique brands. It is the “soul” of a true lifestyle hotel, not the body, which is its true differentiation. The legacy chains will need to find that “soul” within their organization, or import it from the outside, to become real players in this fascinating and growing segment of our industry.

Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.