NYC hotel owners do about-face and support bill that critics call ‘nuclear bomb’ on industry

Some Big Apple hotel owners did an about-face to support a City Council plan that critics called a “nuclear bomb” on the lodging industry that would drive up city room rates.

The Hotel Association of New York City has signed off on a proposal that would create new licensing requirements for lodging businesses after some modifications — though some smaller hotels are still holding out on the controversial plan.

The association’s president has previously called the bill a “nuclear bomb” and some owners united in an effort to raise $20 million to lobby against the plan .

“We listened to stakeholders, prioritized their feedback and now look forward to a hearing on this vital legislation which protects hotel guests, workers and the broader community,” said Councilwoman Julie Menin, the bill’s sponsor.

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The Hotel Trade Union, a union for the city’s hotel workers, has supported the legislation, which would ban establishments from contracting out most services — meaning they’d have to directly employ many workers.

The latest version of the bill clarifies that the Department of Consumer Affairs commissioner cannot rescind a license for a temporary service disruption, such as a leak.

Menin, who served as the Department of Consumer Affairs commissioner from 2014 to 2016, said hotel stakeholders were concerned that minor disruptions in service would cause them to lose their licenses.

The council member, a former regulatory attorney, said the bill was intended to increase safety at hotels by adding panic buttons and other safety requirements.

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Other modifications to the bill included narrowing a subcontracting ban to exclude engineers and other technical workers.

A subcontracting ban still exists for front desk workers and housekeeping, but an amendment added to the bill grandfathers in existing subcontracts.

Hotels are required to rehire the front desk staff and housekeepers who work for subcontractors under a pre-existing law called the Worker Retention Bill, Menin said

But smaller hotel owners said the modifications aren’t enough.

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Mukesh Patel, a New York City hotelier and a founding member of the NYC Minority Hotel Association, said the bill will have “disastrous impacts.”

“The new bill does nothing to protect our small businesses and their families, and will have disastrous impacts on our livelihoods,” Patel said in a written statement shortly after the changes were announced.

Kevin Carey, interim president and CEO of the American Hotel and Lodging Association, said if the bill passes, it would bring “significant economic harm” to small hotels.

“While we appreciate the Councilwoman’s willingness to listen to industry feedback and work toward more sensible outcomes for New York City’s hotels, the new version of the legislation still contains language that will cause significant economic harm — primarily to small, family-owned hotels and the largely immigrant and minority-owned businesses that support them,” Carey said.

“There is no question that this bill, if passed, will cause many of New York City’s small businesses to close and thousands of hard-working New Yorkers to lose their jobs,” Carey added. “We cannot accept any legislation that causes such disparate impacts across the industry.”

Thirty-six of the chamber’s 51 members have already signed on to support the bill.

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