NYC Hotel Licensing Law's Costs May Outweigh Its Benefits

New York Real Estate Practice Group Leader Stuart Saft authored an article for Law360 analyzing the Safe Hotels Act, recently passed by the New York City Council. This bill, also known as Intro 991-C, requires hotel operators to obtain a license to operate in the city, with an application term of two years. Hotel operators will also have to ensure continuous coverage of their front desks — and continuous coverage by a security guard for large hotels with more than 400 guest rooms — in addition to maintaining cleanliness in all rooms, equipping core employees with panic buttons and training core employees to recognize and respond to human trafficking. Mr. Saft explains that the biggest issue he sees with the bill is that compliance is determined by the commissioner of the New York City Department of Consumer Affairs and Worker Protection, which puts non-unionized hotels in the difficult position of having to demonstrate adequate safeguards. He also points out other controversial provisions, such as heightened liability risks related to human trafficking activity and a provision for staff retention based on seniority rather than competence. All of this, he says, means legal professionals will have to advise clients whether the cost of complying with the bill outweighs the cost of joining the union.

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