Owners Beware: Hotels Face Increased Brand and Liability Risks for Human Trafficking

By William Shepherd Partner, Holland & Knight LLP | April 15, 2018

In February of this year, Marriott's CEO, Arne Sorenson, took the courageous step of highlighting the human trafficking dangers that exist within the hotel industry. He referred to the story a Marriott employee who, when presented with the situation of two suspicious men in the company of a 12-year old boy, did not stand by idly. Instead, she reached out to her supervisor and together they alerted authorities.

As it turns out, the boy had been missing for three days. The hotel employee's quick thinking was the only thing that prevented an awful situation from becoming even worse.

Sorenson told this success story both to draw attention to the dangers of human trafficking and to also illustrate the steps that his company was undertaking to combat the issue. First and foremost, Marriott has developed a training program to educate all new associates on human trafficking. Secondly, the company has implemented anti-human trafficking policies, so that all employees know what the company protocol is for dealing with potential human trafficking.

Marriott's affirmative steps put it in line with the growing national and international trend toward requiring companies to weed out trafficking from both their own businesses and along their supply chains. This article traces that trend and points out how these various laws apply to the hotel industry.

Domestic Laws

The most recent legislative effort to hold businesses, including hotels, accountable for the actions of third-party traffickers is the Fight Online Sex Traffickers Act (FOSTA). The Senate passed FOSTA in March and it now awaits the President's signature. FOSTA would make it illegal to, either knowingly or with reckless disregard, support, assist, or facilitate sex trafficking. While FOSTA's primary focus is to target websites that permit sex ads, ultimately, its reckless disregard standard could apply to hotels that turn a blind eye to trafficking that occurs within their facilities. Consequently, if a hotel does not train or otherwise educate their employees on how to handle human trafficking, it might find itself liable under FOSTA.

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Revenue Management: Getting it Right

Revenue Management has evolved into an indispensable area of hotel operations, chiefly responsible for setting forecasting and pricing strategies. Because the profession is relatively new to the hotel and hospitality industries, a clear-cut definition of what exactly Hotel Revenue Management is has only recently emerged - Selling the Right Room to the Right Client at the Right Moment at the Right Price on the Right Distribution Channel with the best commission efficiency. Though the profession can be summed up in a single sentence, that doesn't mean it's easy. In fact, it's an incredibly complicated and complex endeavor, relying on mountains of data from a wide range of sources that must be analyzed and interpreted in order to formulate concrete pricing strategies. To accomplish this, Revenue Managers rely on an array of sophisticated technology systems and software tools that generate a multitude of reports that are central to effective decision-making. As valuable as these current technology systems are, much of the information that's collected is based on past historical trends and performance. What's new is the coming of big, data-driven, predictive software and analytics, which is likely to be a game-changer for Revenue Managers. The software has the capacity to analyze all the relevant data and predict occupancy levels and room rates, maximizing hotel profitability in the process. Another new trend that some larger hotel chains are embracing is an emphasis on Booking Direct. For Revenue Managers, this is another new channel with its own sales and costs that have to be figured into the mix. The October issue of the Hotel Business Review will address these developments and document how some leading hotels are executing their revenue management strategies.