New York City Hotels Face New Rules After Council Passes Licensing Law

The New York City Council on Wednesday passed a hotel licensing bill that has sparked an intense debate between supporters who claim it will improve safety and working conditions and opponents who argue it will hobble the hotel industry.

The 45-to-4 vote, with one abstention, was a veto-proof supermajority — meaning the bill will become law and Mayor Eric Adams can’t veto it. It requires hotels to obtain a new license to operate in the city.

“Licensing is a critical regulatory tool … [but] oversight of the hotel industry has essentially been laissez-faire,” said Manhattan City Council Member Julie Menin, who introduced the bill.

What the Hotel Licenses Require

Since its introduction in July, lawmakers have modified the bill’s language in response to an uproar from many hotel industry members.

In its final form, the Safe Hotels Act requires a new license that costs $350, lasts for two years, and comes with new operating restrictions. Here are a few highlights.

• Must maintain continuous front desk coverage round the clock with at least one employee. In a compromise compared to the original version of the legislation, the law will let hotels substitute front desk staff with a trained security guard when staff isn’t available.

• Hotels with over 100 rooms must directly employ all “core employees” (housekeeping, front desk, front service staff). This new requirement is a boon to unions and will upset the operating model of many hotels that rely on outside contractors. Smaller “mom-and-pop” hotels are excluded from the rule.

• Hotels must provide daily room cleaning and trash removal (unless the guest declines). Hotels can’t charge fees for daily room cleaning or offer incentives to skip it.

• Cannot accept reservations for less than 4 hours (except airport hotels).

• The legislation includes penalties for violations, ranging from $500 for first violations to $5,000 for subsequent violations within a two-year period.

“Hotel-related complaints to DCWP [NYC Department of Consumer and Worker Protection] have doubled in the past four years,” Menin said. “There have also been over 14,000 criminal complaints to the NYPD [New York Police Department] about hotels and motels and 39 murders [in them].”

Mixed Reception

Some hotel owners and lobbyists accepted the revised law.

“After hard-fought negotiation and necessary adjustments that exempt small hotels from onerous costs and all hotels from arbitrary licensing rules, the legislation passed today by the City Council will create a fair and practical standard for hotels that will protect both our industry and employees – and also provide the best possible experience for our guests,” said Vijay Dandapani, president and CEO of the Hotel Association of New York.

However, some other hotel owners and lobbyists protested the new law. They said the new provision requiring constant staffing would spike operational costs, causing them to raise rates and lose guests. Some also complain of potential staffing and training challenges in the city’s tight labor market.

“It will do nothing to make anyone safer, yet it will force many small, independent, particularly minority-owned, hotels to close, kill thousands of jobs, and cause room rates across the city to skyrocket, making New York unaffordable for tourists,” said Mukesh Patel, a member of the NYC Minority Hotel Association.