HOTEL BUSINESS REVIEW

December FOCUS: Hotel Law

 
December, 2019

Hotel Law: A Labor Crisis and Cyber Security

According to a recent study, the hospitality industry accounted for 2.9 trillion dollars in sales and in the U.S. alone, was responsible for 1 in 9 jobs. In an industry of that scope and dimension, legal issues touch every aspect of a hotel's operation, and legal services are required in order to conform to all prevailing laws and regulations. Though not all hotels face the same issues, there are some industry-wide subjects that are of concern more broadly. One of those matters is the issue of immigration and how it affects the ability of hotels to recruit qualified employees. The hotel industry is currently facing a labor crisis; the U.S. Labor Department estimates that there are 600,000 unfilled jobs in the industry. Part of the problem contributing to this labor shortage is the lack of H2B visas for low-skilled workers, combined with the difficulty in obtaining J-1 visas for temporary workers. Because comprehensive immigration reform is not being addressed politically, hotel managers expect things are going to get worse before they get better. Corporate cyber security is another major legal issue the industry must address. Hotels are under enormous pressure in this area given the large volume of customer financial transactions they handle daily. Recently, a federal court ruled that the Federal Trade Commission had the power to regulate corporate cyber security, so it is incumbent on hotels to establish data security programs in order to prevent data breaches. The lack of such programs could cause hotels to face legal threats from government agencies, class action lawsuits, and damage to their brand image if a data breach should occur. These are just two of the critical issues that the December issue of Hotel Business Review will examine in the area of hotel law.

This month's feature articles...

Megan Walker

The California legislature recently passed SB 970, which requires hotel and motel employers in the state to provide 20 minutes of human trafficking awareness training to all employees by Jan. 1, 2020. While the penalties for non-compliance are minor (an order mandating compliance), no establishment wants to become a hotbed for trafficking activities. In this article, Attorney Megan E. Walker reviews the issue of trafficking in hotels, the new training requirements under SB 970 and indicators of trafficking that may be helpful for hotel staff to identify victims. READ MORE

James O'Brien

These days, there is a lot of negativity surrounding U.S. immigration, and it couldn't come at a worse time. The hospitality industry is straining for qualified human resources in what is otherwise a golden age of expansion and record profits. From stricter new approval standards, visa caps, and government processing delays, to caravans and divisive border wall politics, it's difficult in this environment to find reasons to be optimistic about acquiring talent from abroad and being able to secure lawful employment-authorized status for them. But the U.S. immigration system, which many observers perceive to be "broken," nevertheless still offers opportunities for astute hospitality executives to help keep up with the talent demand curve. READ MORE

Bruce Liebman

Hotels are increasingly being hit with lawsuits claiming discrimination against disabled individuals in violation of Title III of the Americans with Disabilities Act. The lawsuits are being filed by what are called ADA testers-individuals who visit businesses intentionally looking for non-compliance with the requirements of the ADA. Common complaints involve architectural barriers in the parking lot (e.g., inadequate or no handicap parking spaces) and lack of handicap accessible restrooms). This article evaluates access claims under the ADA in the hospitality industry, how to defend these claims and the significance and impact of a recent decision on future hotel-related ADA discrimination cases. READ MORE

Ashley Halberda

In light of the "Me Too" and "Times Up" movement, recently passed County Hotel Worker Protection Act of 2018 will be requiring hotels to develop, maintain, and comply with new sexual harassment policies. With this new industry-wide pledge, hotel leaders agreed to enforce stronger safety and security measures for hotel employees. One of the ways they plan to carry this mission is through the use of safety devices known as "panic buttons." These new laws and regulations come at a pretty steep price to hotel employers, we want you to know what you can do to ensure you're protected. READ MORE

Dana Kravetz

Hotel and resorts are jumping on the gig economy bandwagon, satisfying their short-term employment needs by (literally) tapping into the ever-growing pool of freelance hospitality workers available via app or online. But as more and more hoteliers avail themselves to the flexibility and considerable costs savings that are part and parcel to the on-demand staffing model, they are wading into potentially perilous waters, with legal and reputational issues lurking just below the surface. Here, a light is shined on would-be problems inherent in the gig economy that management should be mindful of. READ MORE

John R. Hunt

In recent years, employers in the hospitality industry have faced an onslaught of claims and litigation under the Fair Labor Standards Act, the federal law that establishes minimum wage and overtime requirements. Among the kinds of cases that employers have confronted are those alleging violations of the Department of Labor's "80/20" rule for tipped employees. This "rule" provided that an employer could not take a "tip credit" where a tipped employee spent over 20 percent of his or her time on activities that did not directly generate tips. The following discusses the rule and the significant changes made by the DOL. READ MORE

Todd Soloway

Corporate mergers and acquisitions activity (M&A) has skyrocketed in recent years. By some estimates, global deals are projected to surpass $4 trillion by the end of 2018, which would be the highest amount ever recorded in a single year. The hospitality industry has seen a similar surge in mega-deals over the last several years. While economic factors have contributed to this rise, hospitality has also been shaped by industry-specific influences that are driving companies to acquire and consolidate with others. This article will examine common legal issues that arise during M&A transactions involving hospitality companies and will offer guidance on how both sides of a deal should address the risks and liabilities. READ MORE

John Mavros

Hotels go to great lengths to present a carefully crafted image to their guests and, hotel employees play an integral role in making a mere marketing strategy become a revenue generating reality. One way to ensure that employees effectively communicate the hotel's desired image can be accomplished by a written dress code and personal appearance policy. This policy can be as detailed as management desires. Regardless, to avoid liability, hotels need to be aware of both state and federal laws that govern gender, gender identity, gender expression and religious expression, in the workplace and how those laws interact with their dress code policy. READ MORE

Robert E. Braun

The California Consumer Privacy Act of 2018 is a threshold event that will change how all businesses collect, retain and treat personal information. No industry is more challenged by the law than the hospitality industry, where the "heads in beds" part of the equation is driven by guest data. The Act will impact how hotels do business, ranging from their reservation procedures to new challenges on their ability to implement guest loyalty programs, one of the key means of creating brand loyalty. Hotel companies, whether they be owners, managers or brands, must act now to comply with the Act. READ MORE

Dwayne McKenzie

The California Legislature had a busy year in 2019, once again enacting a number of new laws that significantly affect California employers and their businesses, most of which will take effect on January 1, 2020. With the new year fast approaching, hotel executives and human resource professionals should take the time to educate themselves about these new laws, review their employee handbooks and evaluate current practices to ensure they are in compliance. Cox, Castle & Nicholson attorneys Dwayne McKenzie and Cathy Moses provide a brief summary of the most notable laws as well as best practices for hospitality companies. READ MORE

Arthur Tacchino

Businesses in the hotel industry, and the executives that lead them, face countless challenges each day: navigating the ebbs and flows of the market, employee retention, managing inventory, and remaining compliant with all IRS regulations and reporting. And, these challenges are compounded by the very nature of the hotel business. Shift work, seasonality and employees working across multiple locations increase the complexity of meeting requirements, especially those mandated by the Affordable Care Act. This article will discuss what leaders in the hotel industry can do to successfully navigate the nuances of Affordable Care Act compliance and avoid any costly fines. READ MORE

John R. Hunt

A persistent criticism of American business is that a significant gap exists between the wages paid to men and women for performing similar work. According to a report from the U.S. Department of Labor, a variety of occupations in the hospitality industry suffer from this problem. Although federal legislation guaranteeing equal pay regardless of gender has existed for years, commentators claim that these measures are inadequate. A proposed law is pending in Congress that would substantially rewrite the current federal requirements governing equal pay. A number of states have pushed ahead in this area and enacted their own laws. A hotel manager today faces the challenge of staying abreast of rapidly changing equal pay obligations at the federal, state and local levels. READ MORE

Robert Lannan

Some of the worst news a hotel owner can receive is that guestrooms or other facilities within the hotel are noticeably contaminated by excessive mold growth. This article, written by an industrial hygienist and an attorney, explores the physical dangers and legal liability caused by excessive mold growth in hotels, means of preventing this problem, and steps hotel owners and operators should take to minimize damage and liability upon discovery of excessive mold growth. READ MORE

Gregory A. Hearing

The U.S. unemployment rate is at a near record low yet the hospitality industry is facing a massive labor shortage. There are many incentives which hospitality industry employers can offer their employees to maintain their current workforce but taking a lax approach to employee discipline should not be one of them. Engaging in disparate disciplinary treatment likely will result in the filing of employment lawsuits or labor grievances which otherwise may have been avoidable. Lodging industry professionals should ensure that their management team consistently administers disciplinary policies and procedures in an evenhanded manner and provide training which identifies and explains the consequences of disparate discipline. READ MORE

Banks Brown

The push and pull of music licensing in the hotel industry has always been somewhat emotional. Because it is a devilish task to determine the value of music to the industry, it is easy for the hotels to conclude they pay too much and easy for the licensing companies to conclude that they, and the artists they represent, are entitled to more. Over the years, the hotel industry and the music industry have gradually gotten accustomed to each other and some of the companies in the industries involved have truly understood how they can help each other. This article is an attempt to explain what is going on. READ MORE

Mark Melodia

The hospitality sector relies heavily on service providers and supply chains. Cybersecurity risk management and data privacy considerations are increasingly a critical factor in those relationships, both to deter poor vendor practices as well as to mitigate exposure in the event of a cyber incident. This article explains how cybersecurity is a risk management function that can be applied to all aspects of a vendor relationship, along with overarching practices for such relationships. The article focuses on cybersecurity considerations in vendor contracts and offers a practical "cybersecurity checklist" that can be used to vet contracts and ensure that cybersecurity and related considerations are being tended to. READ MORE

Christine Samsel

Navigating through Paid Time Off (PTO) benefits for multi-jurisdictional employers can be challenging. Christine Samsel of Brownstein Hyatt Farber Schreck provides a summary of several key issues to consider, from combining different types of PTO into a single category to different states' handling of PTO as a vested wage entitlement or a contract matter between employers and employees, and the impact that has on PTO policies. She also dissects the interplay of PTO and paid sick leave laws, and outlines some of the pitfalls of a recent trend - unlimited PTO policies. READ MORE

Stacy Kula

The obscure maze of alcohol licensing becomes even more confusing as the hotelier encounters different state laws. Because states are vested with the authority to create their own alcohol laws, there is often no uniformity in laws from state to state. As hoteliers build their portfolio in new territories, it can be difficult to remember what law applies. This article does not teach the laws of any state, rather it identifies the legal issues that hoteliers face when making application for an alcohol license in the various states. It is these questions that create the foundation of understanding of the specific state alcohol regimes for the hotelier. READ MORE

John  Farley

One of the world's largest hotel chains experienced a massive cyberattack in which a hacker exploited their lack of adequate IT security controls, exposing the private data and travel details of nearly 500 million people. Security threats can come from a number of touch points, such as hotel Wi-Fi, credit card reservations/sales, loyalty programs, guest services and interconnections with vendors. Adding to such vulnerabilities is a labor shortage. The U.S. Department of Labor estimates the hotel industry will experience a 600,000-worker shortfall. Couple this with the dearth of qualified cyber security professionals, and you see an industry at a peak point of stress. READ MORE

Michael B. Newman

With the constant flow of hotel acquisitions and investments, global conglomerates, private equity funds, and venture capitalists regularly find themselves navigating alcohol beverage laws and regulations enacted from a bygone era and drafted in response to societal abuses and evils at that time. Alcohol beverage tied-house laws serve to prevent manufacturers and distributors from holding interests in or exercising control over retailers and prevent cross-ownership or investment in different tiers in the alcohol beverage industry. While some may question their relevancy today, "tied-house laws" separating the three tiers of the industry remain a legal hurdle to acquisitions of, or investments in, hotel businesses to be reckoned with. READ MORE

Bonnie Knutson

Instagram is simply a social networking site that is now part of our marketing lexicon. Developed in 2010 by Kevin Systrom and Mike Krieger, the app was sold to Facebook about two years later and is now part of the Facebook empire. At its core, Instagram is simply an app that enables its users to upload (i.e. "post") photos and videos clips. These posts can then be viewed by other users who can "like" them as well as "follow" a user or a brand. Instagram is all about sharing visually. In this article, you discover how being on Instagram can add incredible value to your hotel. READ MORE

David Torres

Creating a large and loyal fan base is a brand's ultimate goal, and it is clear that beach resorts have some of the best products in the world for attracting repeat customers. Some amenities and services are more obviously enticing than others and some might even be overlooked when trying to attain and maintain popularity among guests, but all in all it might not even be what you would expect. Excellence Resorts has come up with a short list of our successful branding and customer service approach when it comes to bringing the same guests back year after year. READ MORE

Veljko Savic

Veljko Savic, Spa Director at the Coronado Island Marriott Resort & Spa discusses how wellness travel has transitioned from luxury to expectation of many travelers. He provides eight ways in which wellness experiences can be integrated throughout a hotel and raises the idea that by incorporating amenities, spaces and facilities focused on wellness, creates happier guests. From meeting spaces, to culinary offerings, Wellness Concierge and beyond, the Art of Living Well does not need to be thought of as intimidating for either travelers or hotels, but rather a part of day-to-day life and easy integration into the everyday hotel experience. READ MORE

Mark Ricketts

In our busy day in hospitality, we are constantly talking, texting, posting or emailing to another individual or a group of recipients. However, is anyone listening or understanding what we are saying? Being a great communicator is a core skill and function of our hospitality world. Some people are naturals at communications but it is something that all hospitality organizations must also cultivate for all of its members, including frontline staff. The result is strong relationships with our guests, our vendors and partners, and others in our own group. READ MORE

Cristine Henderson

Whether you love them, or love to hate them, millennials are often characterized as disruptors across many industries. This generation has definitely made its mark on the hotel industry, especially where design is concerned. Known for innovation, affinity to technology, and often associated with the advent of social media, millennials are making changes throughout the consumer landscape. Read ahead to see how all these characteristics are translating into the future of our industry. And don't worry, short-term rental services are not quite the death sentence they are painted to be. From selfies to sleek finishes, millennials are shaking things up. READ MORE

Bonnie Knutson

Eleven years from now the U.S. population will reach a tipping point. The year 2030 will mark the moment when all baby boomers will be at least 65 years of age; in other words, 20 percent of our population will be of retirement age. Jonathan Vespa, a U.S. demographer, puts it this way: "The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history. By 2035, there will be 78 million people 65 years and older compared to 76.7 million under the age of 18." So, what does this have to do with hotels? A lot. In this article, you read about two unique opportunities for your hotel to take advantage of the longevity trend. READ MORE

Mark Heymann

A persistent labor shortage means the hospitality industry is facing tough workforce questions: How can a hotel deliver the level of service it promises with a smaller staff? Will tougher competition for workers impact average wage rates in a historically low-paying industry? What solutions, like cross-utilization, can hotels implement now? And what solutions will require larger-scale legal and societal change? Among the more transformational ideas this article will explore are rethinking current minimum shift requirements and looking to nontraditional sources, from retirees to training the formerly incarcerated, for future hospitality work. READ MORE

John Tess

In the competitive hotel industry, it is sometimes hard to successfully market a property's history and heritage in a cost-effective manner. In 1989, the National Trust for Historic Preservation created Historic Hotels of America, a marketing organization specifically charged with capturing the heritage tourism market. Thirty years forward, the organization has grown to represent 300 properties nationwide, including nearly every major brand. The success of HHA can also be found in the average daily room rate and per room revenues. This article explores both the growth of heritage hotels and the programs of HHA. READ MORE

Jeff Hart

Jeff Hart, General Manager of the Los Angeles Airport Marriott explores airport hotels and their unique advantage to meetings and events. Hart discusses tactical tips and strategies that airport properties can take to stand out as a premier event destination. From challenges to opportunities, Hart gives a 360-degree look at the unique ways in which travel hubs can bring a destination to life and tell a story to potential clients that extends beyond near convenience and proximity to the airport. According to Hart and the team at the Los Angeles Airport Marriott, airport hotels are raising the bar, and now is the time for properties to look at the ways (small or large) in which they can level up their spaces, offerings and approach. READ MORE

Court Williams

Hotel brands these days have much to gain by integrating a corporate social responsibility (CSR) program into their core business strategy. Doing so benefits their profitability, increases trust with their target audience, and can significantly boost a hotel or chain's reputation. A strong CSR program enhances brand awareness and traveler loyalty, while providing the essential ingredients to build a competitive advantage in the market. Employees also benefit from the opportunities offered to give back to the community, and CSR can be a powerful way to retain top hotel talent. Discover some of the novel ways different types of hospitality properties have implemented CSR strategies, and how their activities are benefitting local (and not-so-local) communities. READ MORE

Mark Allvey

Niquesa Travel is dedicated to providing clients with hyper-bespoke travel experiences, aimed less at where they want to go and more at how they want to feel while there. It believes that travel should be transformational, attending to each desire or need of guests. These intensely personal requirements demand an exemplary level of client care; gaining their confidence and intuiting their needs to curate the experience that they are seeking. Mark Allvey, Managing Director and Founder of Niquesa Travel, outlines its approach to guest service which goes above and beyond the expected from the outset. READ MORE

John Welty

No business is immune to a cyberattack. Hotels handle guest personal information and credit card information. They also handle numerous transactions in person and via the Internet. If one hotel employee were to fall victim to a sophisticated phishing scam, the hotel's reputation and revenue stream could be deeply affected. To avoid this, hotel owners and operators need to identify and understand their risk exposures. As hackers get more sophisticated with each passing day, it's important to reevaluate a business's risk regularly. In this article, we discuss recent cyberattacks affecting hotels and the repercussions, as well as what hotel owners and operators can do about it. READ MORE

Kristi  Dickinson

The annual budgeting process should involve much more than preparing a simple operations budget. An effective budget is a tool to communicate both goals and expectations. Budgets provide operational objectives for your team and help them stay on track and they are both a standard for comparison and a baseline for future planning. A well-organized budget involves a business plan that includes marketing and new programming, as well as capital expenditures which contribute to the long-term vision beyond the next operational year. In this article I outline a plan of action that every hotel spa director can benefit from. READ MORE

Nate Lane

Google's continually evolving ecosystem presents both a challenge and an opportunity to business owners looking to maximize their impact and increase visualization on the web. Today, the algorithms behind Google are designed to make recommendations based on a user's intent rather than direct keyword matches, a trend observant hoteliers are taking advantage of. This article will outline the cornerstones of a strong search engine optimization plan, how business owners can adopt an intent-based search process, and why these strategies are integral to your future success. READ MORE

Mostafa Sayyadi

Hotel executives realize that knowledge is the most strategic factor for empowering the capabilities of a hotel and improving its competitive advantage in the marketplace. Knowledge is shared and synthesized with an aim to providing higher quality services. However, this is still not enough for hotel executives because knowledge is quite elusive and is changing on a day-to-day basis with discontinued services and the ever changing vast array of environmental issues. The key is for hotel executives to integrate risk management, knowledge management and talent management within hotels so that information can be found and used instantaneously. READ MORE

S. Lakshmi Narasimhan

So, what does the future hold in store for the wedding event as well as business? The hospitality industry is currently going through what can be termed as the guest experience customization craze. No one wants a cookie cutter stay in a hotel. They want their stay to be a memorable experience. Well, if that is the requirement, wedding events have a lot going for them. To begin with, they are already clear, important events in any one's life. Thus, the motivation to make it something to remember is already there. What new initiatives would you bring to your target market's wedding or anniversary events? READ MORE

David Ashen

Of all areas affected by changes in the way people live, work and play, public spaces are chief among them. David Ashen, president & CEO of interior design and brand consulting firm dash design, explores what's behind the shift, including generational preferences, an increase in remote and co-working environments and a need to surprise and delight guest like never before. Ashen explores how hotel brands can stay relevant to leisure and business guests by reimagining meeting spaces and ballrooms to make way for fresh possibilities and a world of flexibility. READ MORE

Adrian Kurre

Tourism in Canada is on the rise, leading to a bevy of opportunities for hotel brands, developers and owners. For the All Suites brands by Hilton, comprised of Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton, the state of the market combined with the use of multi-brand builds and flexible prototypes has led to great success, with the category recently opening its milestone 30th Canadian property. With a robust pipeline and recognitions such as Great Place to Work®'s 2019 Best Workplaces™ in Canada, it's no wonder the brands are seeing continued growth in Canada. READ MORE

Dave Llorens

Over the past few decades, the environmental movement in the U.S. has gained quite a bit of momentum and started to impact more facets of everyday life. Spurred on by the interconnectivity of the internet and social media, consumers have become more demanding of their favorite companies - they want those brands to echo their own social and environmental values. To prioritize the energy efficiency that consumers demand, companies will need to make some major changes. While overhauling your organization to be more environmentally friendly sounds daunting, these changes don't need to interrupt daily operations or break the bank. READ MORE

Coming up in September 2022...

Hotel Group Meetings: The Great Outdoors


There is some welcome good news in the Hotel Group Meetings sector. There seems to be a resurgence in activity - across all sectors and all sizes - from small board meetings to large in-person groups. However, hotels must remain flexible and proactive, as they seek to provide venues and programs that are productive, comfortable, and safe to all parties. One major development is the expansion of outdoor meeting activities. This trend not only serves to meet regulatory health standards, but it also promotes an environment of well-being. According to a recent study from WorldHealth.net, spending just 29 minutes outdoors can result in a 45% increase in productivity; and 63% of employees reportedly felt invigorated after being in fresh air. Combined with guided physical activities and healthy food and beverage offerings, a sense of wellness and productivity are established. The September Hotel Business Review will report on what some hotels are doing to accommodate the revitalization of group meeting business in their operations.