City council members are proposing new hotel regulations that could increase room rates in the Big Apple, a move officials say would be a “nuclear bomb” for the hotel industry.
The bill, introduced by Councillor Julie Menin, would either ban hotels from outsourcing essential services or force them to directly employ most workers on union contracts.
Hoteliers say the proposed law is micromanagement run wild.
“This is like a nuclear bomb. It’s going to destroy a major part of the industry. This is a bazooka to kill gnats,” said Vijay Dandapani, president and CEO of the New York City Hotel Association.
The average hotel rate in Gotham is about $300 a night, making it the second cheapest after Boston. CheapHotels.org.
More than 150 of the city’s hotels have been converted into shelters for migrants, reducing the number of available rooms and driving up already high hotel prices.
The proposed new regulations have the backing of the powerful National Council of Hotel Workers Unions.
Of the city’s 700 hotels, 400 are not unionized.
The bill would require hotels to obtain a one-year license from the Department of Consumer and Worker Production and apply for renewal annually.
Industry insiders say the one-year detention or temporary suspension could jeopardize hotel financing.
Currently, hotels in the city can open after receiving an occupancy permit from the Buildings Department and safety approval from the Fire Department, but they are not required to obtain a business license, as is the case in many other cities.
Supporters of the bill point out that other industries, such as restaurants, are licensed in New York.
The bill states that hotels can only hire one management company for services and cannot subcontract work unless a “majority of all core and essential employees” — including front desk staff, maintenance, cooks, food handlers and security guards — are “covered by a collective bargaining agreement.”
That would mean employees would have to sign union contracts or be represented by a union, industry sources said.
Mennin and the Hotel Labour Council, which is lobbying for the bill, argued the bill is pro-safety, pro-consumer and pro-worker.
“Frankly, licensing is one of the most powerful and effective tools we have to regulate businesses,” Mennin said. “Hotels are a key economic driver in our city and we want to make sure they are properly regulated in a way that benefits everyone.”
“My bill would ensure that all hotels in the city are operated in a responsible manner by imposing fines on bad hoteliers operating in the city,” said Menin, who served as consumer affairs commissioner under former Mayor Bill de Blasio and chairs the City Council’s Consumer Protection Committee.
She argued that reported crime at hotels has increased dramatically over the past 20 years and that a lack of oversight and accountability is part of the problem.
She cited the tragic incident in the early hours of New Year’s Day 2021, when a young man was shot outside a troubled Queens hotel.
“At the beginning of 2021, New York City experienced its first homicide of the year at the Umbrella Hotel at Kew Gardens, despite numerous complaints from local residents about the hotel prior to the murder,” Mennin said.
“The city literally has no jurisdiction over the hotel, so they couldn’t take any action. The hotel ended up closing in 2021, but that was management’s decision, not the city’s.”
The Hotel Industry Council argued that well-run hotels that don’t cut corners on service or security have nothing to worry about.
“This bill is problematic for hotels that turn a blind eye to human trafficking, prostitution, dangerous crime and other health and safety issues that plague the hospitality industry,” HTC spokesman Austin Shafran said.
“But if you’re a reputable hotelier who wants common-sense regulation of bad hotels to protect consumers, communities and workers, this is exactly what the doctor prescribed.”
Mennin said Wednesday he had heard from hoteliers who had expressed legitimate concerns and had already agreed to amend the bill on staffing requirements.
For example, her bill would have required security staffing requirements, such as one guard per 100 rooms.
“We are open to change,” she said.
An earlier version of the bill was introduced in 2019 by then-City Councilman Donovan Richards, who is now Queens Borough President.
But the plans were thwarted when the COVID-19 pandemic devastated the city and hotels were closed.
The current proposed bill has more than 20 sponsors.
