HOTEL BUSINESS REVIEW

December FOCUS: Hotel Law

 
December, 2015

Hotel Law: Legal Issues Looming Large

In an industry where people are on-property 24/7/365, the possibilities are endless for legal issues to arise stemming from hotel guest concerns. And given the sheer enormity of the international hotel industry, issues pertaining to business, franchise, investment and real estate law are equally immense. Finally, given the huge numbers of diverse people who are employed in the hospitality industry, whether in hotel operations or food and beverage, legal issues pertaining to labor, union, immigration and employment law are also significant and substantial. The expertise of all kinds of specialists and practitioners is required to administer the legal issues within the hotel industry, and though the subject areas are vast and varied, there are numerous issues which will be in the forefront in 2015 and beyond. One issue that is gaining traction is how hotels are dealing with the use of marijuana by employees, given its ever-changing legal status. The use of marijuana is now legal in 21 states and the District of Columbia for certain medical conditions. Two other states, Colorado and Washington, have legalized recreational marijuana use for individuals who are 21 years old or older, and Alaska and Oregon currently have similar legislation pending. Most state laws legalizing marijuana do not address the employment issues implicated by these statutes. Therefore, it is incumbent on all hotel operators to be aware of the laws in their states and to adjust their employment policies accordingly regarding marijuana use by their employees. Other issues that are currently looming large pertain to guest identity theft by hotel employees and the legal liabilities which ensue; issues of property surveillance versus a guest's right to privacy; and immigration reform could also be a major compliance issue. The December issue of Hotel Business Review will examine some of the more critical issues involving hotel law and how some managers are addressing them in their operations.

This month's feature articles...

John Mavros

It's that time of year again—time to don ugly sweaters and drink rum-filled egg nog while socializing with co-workers at the company holiday party. This is also the time for heightened instances of sexual harassment and liability surrounding overtime pay and holiday bonuses. READ MORE

Kathleen Pohlid

Substance abuse of alcohol and drugs, including abuse of prescription drugs and illegal drug use, costs over $400 billion annually, according to the National Institute on Drug Abuse. These costs directly impact the workplace through reduced performance, employee turnover, lower productivity, absenteeism, higher insurance and workers compensation costs, damage to property, criminal activity, and injuries and death from accidents. Developing a workplace drug abuse policy is a way to deter and reduce the incidence of employee substance abuse, to reduce the costs to your establishment, and avoid hardships to others. READ MORE

Richard J. Keating Jr.

Long ago, a hotel bar or lounge felt like a space filler on the lobby level. Since you could not realistically put another room there, you might as well put a small lounge to serve watered-down drinks and listen to piped-in music. It was a place to offer your guests, because there was nowhere else to really go. And not surprisingly, not many people would go there. Think of the Armada Room that featured Murph and the Magic Tones in the movie “Blues Brothers.” Of course resorts and five-star hotels were the exception, boasting their share of award-winning restaurants. But for most hotels, the nightlife options were never a destination on their own. READ MORE

Banks Brown

Over the past few years a new business model has taken center stage in the market for transient lodging. The fundamental nature of this new model is an internet booking platform that facilitates and participates in the short-term transient rental of private homes and apartments. Participants in the market are, for example, Airbnb, HomeAway, and onefinestay. The model is often described as part of the sharing economy, in the sense that it facilitates the “sharing” of residential space between transient guests and the primary occupant of that space. READ MORE

William A. Brewer III

Until the early 2000s, hotels were often owned by individuals, small groups of investors, or the companies under whose flag they operated. In that era - circa 1960s through the early 2000s - there was a significant alignment of interests between those traditional owners and the in-branded hotel managers. This alignment was not surprising because hotel-owning brand managers had to comply with the very policies and practices they dictated for their brand-wide standards. However, by the start of the new millennium, the players and landscape began to change as the hotel chains began divesting themselves of their hotel assets and the well-financed private equity investor became a central player. READ MORE

John R. Hunt

For the past decade, employees who earned over $23,660 per year generally were exempt from federal overtime requirements if they were paid on a salary basis and performed certain well-defined duties. The United States Department of Labor (“DOL”), however, recently proposed changing its regulations to more than double this minimum amount to $50,440 per year. If the regulation becomes final, it will have a substantial effect on how hotels pay their managers, assistant managers and supervisors. This article discusses the impact of the proposed changes. READ MORE

Becky  Bromberg

The current economic uptick has led to an extremely competitive hotel sourcing environment over the last couple of years. Both our client contacts and our team of travel buyers are facing similar challenges as we look to find adequate space for upcoming meetings, events and incentive trips. A 2015 Successful Meetings Trends Survey showed that meeting planners' second most common concern was negotiating with hoteliers in a seller's market. READ MORE

Justin R. Bragiel

The scene is a common one in hotels across the nation: A police officer is standing at the front desk, asking the clerk whether a particular guest checked in. The officer wants to see a list of guests' names, and even asks for a copy of the security camera footage. The clerk summons the front office manager, and the police officer points out that the city ordinance regulating hotel operations requires hotel compliance with requests to review hotel records. Should the manager turn over the information? What are the hotel's obligations to the guest? READ MORE

Ben  Hanuka

The vast majority of franchise systems, including hotel systems, depend on operating standards, procedures and policies. These requirements are typically contained in a franchise operating manual that is separate from a franchise agreement. Particularly in established hotel franchise systems, operating manuals tend to be comprehensive and often complex documents. They may contain extensive requirements with respect to virtually every aspect of the operation of the hotel, from the brand and quality assurance, to the use of technology. READ MORE

Theodore C. Max

Coco Chanel said that “Fashion is not something that exists in dresses only. Fashion is in the sky, in the street, fashion has to do with ideas, the way we live, what is happening.” Social media and the Internet have put global fashion at consumers' fingertips. Fashion is no longer an industry of just brands, but also one of lifestyle choices and luxury experiences. Fashion can be food and dining experiences. One can now enjoy a Ralph Lauren hamburger in Paris at Ralph's, drink a Cavalli vodka martini at the Cavalli Club in Dubai, or feast on Scottish oysters on Alfred Dunhill's “Oyster Night at Alfie's” in Shanghai. Chanel, Dsquared 2, Ralph Lauren, Bulgari, Armani, and Cavalli all have luxury restaurants at hot spots around the world. READ MORE

Marc Stephen Shuster

Last night over 50,000 people rented an accommodation from a service that offers 250,000 rooms in 30,000 cities in 192 countries, and yesterday alone people used a driving service for more than 1 million trips. They chose their rooms, arranged for their rides, and paid for everything online. But, perhaps surprisingly, their overnight accommodations and rides were provided by private individuals rather than a hotel chain or a traditional taxi service; hosts and guests, drivers and riders, were matched up by Airbnb and Uber which have both emerged as viable mainstream alternatives to traditional hotels and taxi service providers, and their entry into the market has and will continue to have a measurable and quantifiable impact on the traditional hotel industry and the transit business. What's at work here? The underpinning is literally the fight to control logistics for the world! While Apple, Google and Amazon battle in the news for who will be the first driverless car, a quieter war wages where hotels and taxicab companies may well be the victims. READ MORE

Michael Wildes

With the 2016 presidential election in full swing, one of the main talking points for the majority of candidates is immigration reform and how to address our broken immigration system. Although politicians often focus on the arguments concerning the 11 million undocumented individuals in this country, there is little discourse on employment-based visas and the need for a massive overhaul pertaining to skilled and non-skilled workers who are the driving force of the United States economy. Recent action taken by President Obama has been helpful in addressing some of these issues, but, simply put, the only way to address this issue is for Congress to take action on our broken immigration system. READ MORE

Robert E. Braun

The basics of the hotel business have traditionally been simple: good location, fair prices, appropriate amenities and good service were the keys to success. While those factors are important today, hotels are no longer simply a “heads in beds” business; hotels are increasingly brand-oriented. Brands focus not only on the services and products they sell, but on developing the perception and recognition of the brand associated with those goods and services. That means that hotels, like all brands, need to focus more and more on understanding their customers and how to reach them, whether through loyalty programs, advertising, social media or otherwise. READ MORE

Justin Thompson

A couple of notable recent legal developments have paved the way for a resurgence in developer interest in condo hotel projects. This is especially true in major luxury markets across the U.S., such as Los Angeles, San Francisco, Miami and New York, where numerous condo hotel projects are in the development and pre-sale phases. By way of background, a condo hotel is a condominium project located immediately adjacent to or within a hotel. In a condo hotel project, the condominium unit owners are entitled to certain hotel amenities by virtue of their unit ownership. Many unit owners elect or are restricted from living in their condo hotel unit year round; when the unit is not occupied, it is rented. READ MORE

Rob Elvin

There have been a significant number of cases reported in the press recently in relation to hotels that are being prosecuted for health and safety breaches. The increased visibility of such cases highlights a need for stronger emphasis on compliance within the industry. This article aims to increase awareness of health and safety issues amongst hoteliers by examining key health and safety obligations in relations to hotels; considering the legal, reputational and financial impact of failures to comply with health and safety duties; and providing some practical examples of how to ensure compliance with legal obligations. READ MORE

Lema Khorshid

With new players constantly opening their doors, the hotel industry has become an extremely competitive game. One day, a hotel is the only one of its kind in its ZIP code, and the next, one opens around the corner and another right across the street. Hotel companies and operations constantly innovate novel and differentiated concepts to draw new customers in, and as a result the hospitality industry bears a surplus of very comparable brands. Whatever the concept and whatever the location, hotel executives need to differentiate their properties from the mass of competition. Using both the law and business of brands is the best tool at the hotel executive's disposal. READ MORE

Coming up in March 1970...