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from another.12 We have followed the parties’ lead and addressed
the Hyatt International group’s patterns of operation as carried
out by HIC, HHK, HS, and certain other master hotel management
and support services subsidiaries.
The Hyatt International group consists of numerous related
companies engaged in the business of hotel management. Hyatt
Domestic’s principal shareholders established HIC and started the
Hyatt International group operations by hiring an experienced
hotelier from the Hilton hotel chain, who in turn hired other
experienced individuals, many of whom were also from the Hilton
hotel chain. HIC entered into an agreement with Hyatt Domestic
providing for the licensing of the Hyatt trade names and marks to
HIC. Under the agreement, HIC was to pay Hyatt Domestic $10,000
for each Hyatt International hotel that HIC opened. The Hyatt
International group and Hyatt Domestic exchanged reservations and
marketing services for their mutual benefit.
The Hyatt International group established separate legal
entities for the management of and/or the provision of various
services to hotels. Foremost among the hotel management
subsidiaries were HHK and HS. HESA, another management entity,
12 Although respondent’s deficiency notice determinations
utilized different amounts for each year in computing the per-
hotel allowances for petitioner AIC’s management fee adjustment,
for purposes of trial, respondent’s methodology no longer relies
on differing annual amounts.
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