H Group Holding, Inc. and Subsidiaries - Page 102




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          brand was valuable and, to some extent, was a drawing factor for             
          potential customers.  The affiliation with a major chain also has            
          a beneficial effect on Hyatt hotel owners’ attempts to secure                
          financing.  Petitioners’ experts minimized and attempted to play             
          down the fact that some Hyatt International hotel guests were                
          from the United States.24  Hyatt Domestic’s promotion of the                 
          Hyatt name and referral of guests to Hyatt International                     
          contributed some value to the Hyatt trade names and marks to                 
          Hyatt International, especially when viewed 10 years out and                 
          later.25  Overall, we disagree with petitioners and hold that the            
          Hyatt trade names and marks had some importance or value to the              
          Hyatt International group.                                                   
               In the event that we might decide the Hyatt names and marks             
          had value, petitioners advanced the alternative argument that the            
          Hyatt International group’s use of the names and marks represents            
          the arm’s-length consideration and provides reciprocal benefits              
          to Hyatt Domestic.  While it is possible that a similar benefit              

               24  As would be expected, the percentage varied from                    
          location to location, particularly in Mexico, Puerto Rico, and               
          Central America.                                                             
               25  We reiterate that $10,000 was paid for each hotel                   
          without regard for the time value of money or the passage of                 
          time.  As of the years under consideration, when the number of               
          hotels had increased and the name use and recognition must have              
          increased, the $10,000 was the standard, unchanged from 1968.  In            
          1975 there were 19 hotels, and by 1988 about 40 (without                     
          considering those in Mexico).  From 1975 to 1988 HIC's gross                 
          management revenue increased fivefold.                                       





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