NYC hoteliers warn City Council’s new ‘nuclear bomb’ rules will drive up lodging prices
City lawmakers are pitching new hotel rules that could drive up room rates in the Big Apple – a move officials say would be a “nuclear bomb” on the hospitality industry.
The bill advanced by Councilwoman Julie Menin would ban hotels from contracting out critical services or push hotels to directly employ most workers with union contracts.
The proposed law is micro-management run amok, hoteliers said.
“This is like a nuclear bomb. It will destroy a major segment of the industry. This is a bazooka to kill a gnat,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City.
The average cost of a hotel in Gotham is about $300 a night, trailing only Boston, according to cheaphotels.org.
More than 150 of the city’s hotels have been converted into migrant shelters, reducing the number of available rooms, which is also driving up the already sky high room rates.
The proposed new red tape has the backing of the powerful Hotel Trades Council union.
Of the city’s 700 hotels, 400 are non-union.
The bill would require a hotel to obtain a one-year license and apply for renewal every year from the Department of Consumer.and Worker Production.
The one-year leash and even temporary suspensions could jeopardize financing of hotels, industry sources said.
Currently, city hotels can open after getting a certificate of occupancy from the Buildings Department and safety approvals from the Fire Department — but they are not required to obtain an operating license, as is the case in many other cities.
Other industries in New York, such as restaurants are licensed, backers of the bill note.
The measure states that hotels can only contract out services to one management company and can’t subcontract out work unless “a majority of all core and critical employees” — such as front desk, maintenance, cooks, food handlers and security are “covered by a collective bargaining agreement.”
That would mean employees have to have a union contract or be represented by a union, industry sources said.
Menin, and the Hotel Trades Council, which is lobbying for the bill, defended it as pro-safety, pro-consumer and pro-worker.
“Licensing, quite frankly, is one of the most powerful and effective tools we have to regulate business.” Menin said. “Hotels are an important economic driver of this city and we want to make sure that they are properly regulated in a way that benefits all.
“My bill is about ensuring all hotels in our city are operated in a responsible manner by charging the bad actors that are operating in our city,” said Menin, who served as consumer affairs commissioner under former Mayor Bill de Blasio and chairs the council’s Consumer Protection Committee.
She said reported crimes have increased dramatically at hotels over the past two decades, and claimed the lack of oversight and accountability are part of the problem.
She cited the tragic shooting of a young man outside a trouble-plagued Queens hotel early New Year’s Day 2021.
“At the beginning of 2021 New York City experienced its first homicide of the year at the Umbrella hotel in Kew Gardens — despite numerous complaints made by community members about this hotel prior to the murder,” Menin said.
“No action could be taken because the city literally has no jurisdiction over the hotel. That hotel ended up closing in 2021 but it was the management’s not the city’s decision to do so.”
The Hotel Trades Council insisted that hotels that operate properly and don’t skim on service and security have nothing to worry about.
“If you’re a hotel that’s comfortable turning a blind eye to human trafficking, prostitution, dangerous crimes and other health and safety issues plaguing the hospitality industry, then this bill is a problem for you,” said HTC spokesman Austin Shaffran.
“But if you’re a reputable hotel owner that wants to see common-sense regulation of bad hotels to protect consumers, communities and workers, then it’s just what the doctor ordered.”
Menin said Wednesday she has heard from hoteliers who have raised legitimate concerns, and she already agreed to revise the bill regarding staffing requirements.
For example, her bill called for security staffing requirements, such as one security guard required for every 100 rooms.
“We’re open to making changes,” she said.
An earlier version of the bill was introduced in 2019 by then-Councilman Donovan Richards, now the Queens borough president.
It was derailed after the COVID-19 pandemic ravaged the city and led to the closure of hotels.
The current proposal bill has more than two dozen sponsors.
