NYC Council Passes Legislation Requiring License for Hotel's to Operate

Hotel operators in New York City will be required to obtain a license to operate in the metro area with the Safe Hotels Act passing – and there are more provisions that industry leaders fear could lead to financial pain.

Under the law, first introduced by city council Julie Menin, the application carries a two-year term and comes with a $350 fee.

Also, there are a number of safety and health provisions included in the Act. For example, unless the service is waived by lodgers, hotel operators must provide daily scheduling of cleaning for every room.

Employees would get human trafficking recognition training and panic buttons. Core workers will need to be directly employed by hotels – unless they are considered smaller operators, which are classified as properties with less than 100 rooms.

Hotels will be mandated to keep scheduled staff at their front desks for “continuous coverage,” the act said. Bigger ones must have a security guard to oversee the premises when rooms are occupied.

According to the details of the new program, hotel operators that violate the licensing terms will be “subject to civil penalties.”

“The journey to this point has been one of collaboration. We’ve engaged in extensive negotiations, listened carefully to stakeholders from all sectors, and refined the bill to address concerns without losing sight of its core objective of public safety and worker protection,” Menin said in a statement.

“The result is a piece of legislation that will make our city safer and our workers protected. It is a testament to what we can achieve together.”

The bill of course did not come without pushback from the lodging industry before becoming a law. Specifically, the Asian American Hotel Owners Association (AAHOA) and industry leaders spoke out against the provisions.

Miraj Patel, chair of the AAHOA claimed in a rally this month that if the action passed it would result in NYC operators “shutting their doors” and “eliminating thousands of jobs.” Moreover, Mitesh Ahir, AAHOA member from New York expressed and vented more concerns regarding the financial impact.

“Requiring us to further regulate our operations and limit our flexibility in management and employee contracts would only increase the already high room rates in the city and surrounding area,” Ahir said.

“Forcing us to increase our rates would severely diminish our overall occupancy, thus lowering the overall revenue of the hotel businesses, which would then lead to lower tax collection. Therefore, this bill does not only hurt our business but also hurts the states and city’s budget allocation.”

It’s unclear when the Safe Hotels Act would take effect exactly.