State and Local Laws that Challenge a Hotel's Existence: Alcohol License Regimes
By James Dervin Associate, Freeman Mathis & Gary, LLP | December 15, 2013
Co-authored by Dana K. Maine, Partner, Freeman Mathis & Gary, LLP
Anyone who has applied for and obtained an alcohol license for a hotel knows that the process can be arduous. In addition to filling out paperwork and providing extensive documentation, the application review process can go on for several weeks to several months. However, once the hotel has secured an alcohol license, this is only the starting point for potential legal pitfalls. As a hotel executive, it is incumbent upon you understand the boundaries of your alcohol license.
The alcohol license is after all a valuable asset for the hotel. Hotel guests expect to be able to purchase and consume alcohol at their convenience within the hotel. Maintaining an alcohol license allows your hotel to provide this service to guests and can make the difference between whether the hotel's restaurant and bar are profit centers or liabilities. Alcohol licenses are also scarce commodities. State laws often permit local governments to restrict the number of alcohol licenses that may be issued, and hotels are not necessarily exempt from these quotas. Furthermore, if your hotel exceeds the bounds of the alcohol license, the hotel could face stiff civil penalties, individual employees may face prosecution under state or local law, and you risk the possibility that your license will be revoked or simply not renewed in the future.
Consequently, once your hotel has obtained an alcohol license, you should be concerned with how to maintain the license without interruption. The following are common questions that a hotel executive may have regarding his/her hotel's alcohol license.
What Is the Scope and Limit of My Existing License?
It varies by permit type and jurisdiction - Location, location, location… the often repeated real estate mantra is important to remember when considering the bounds of your alcohol license. Your license does not permit the sale of alcohol throughout the entire hotel and encompassed property. The alcohol license grants the holder rights within the "licensed premises." This term may be defined explicitly in the license, or it may reference state/local definitions. For example, in South Carolina, "licensed premises" refers to "areas normally used by the licensee to conduct his or her business." This definition would not permit the license holder to sell and serve alcohol on sidewalks or the hotel parking lot for special events. Be aware that your current license may not extend coverage to all areas where you wish to serve alcohol.
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