By Brandon Vervelde
Pulling back the curtain of how a hotel works will help lawmakers advocate for our industry.
To an outsider, a hotel is a mystery. Most travelers don’t know what it takes to run a hotel, says AAHOA member Vinay Patel, president and CEO of SREE Hotels.
“Savvy travelers see what happens front of the house, but I don’t think anyone knows what goes on back of the house,” said Vinay.
Most federal lawmakers are no different. By necessity, lawmakers are generalists. They know a little about nearly everything on which the U.S. government has an impact. When it comes time for hoteliers to talk to lawmakers about issues facing the industry, it’s helpful if they’ve been exposed to more than just the façade of the hotel that most travelers see.
AAHOA pulled back the curtain for lawmakers this summer by hosting back-of-the-house tours of AAHOA member properties. Rep. Steve Chabot (R-Ohio) and Rep. Ed Royce (R-California) “spent a day in the life” of a hotelier courtesy of Vinay Patel and Dhar Patel.
If most lawmakers don’t know how a hotel operates, Chabot might be the exception. When he walked into the Homewood Suites in downtown Cincinnati this August, it was a blast from his past. Chabot worked as a night auditor while attending the College of William and Mary in Virginia.
But the hotel business has changed a lot since Chabot left the industry. AAHOA had plenty to show him.
Representing Ohio’s 1st District, Chabot is the chair of the Small Business Committee. Among the issues the committee is in charge of is access to capital for small businesses and oversight of the U.S. Small Business Administration. Chabot has also held hearings examining the National Labor Relations Board’s decision to expand the joint employer standard and the Department of Labor’s (DOL) new overtime rule, of which he has been highly critical.
“The DOL has heralded this [overtime]rule as a long-overdue action that will provide tremendous benefits to workers. However, like so many of this administration’s policies, this one-size-fits-all mandate will do far more harm than good,” he said. The rule increases the pay threshold for salaried workers exempt from overtime pay from $23,660 to $47,476 per year.
The Homewood Suites Chabot toured is one of SREE Hotel’s 20 properties. Vinay said he agreed to open up the property to Chabot because it’s important to highlight to lawmakers the career paths the hotel business provides, something that’s in jeopardy under the new overtime rule, which makes it more difficult to promote hourly workers to salaried positions.
“What other business can you get into where you can start as a housekeeper, and if you work hard and if learn the hotel business, you can move up and become a general manager?” Vinay asked. “Ours does it. Ours affords people the opportunity to move up from entry level to become middle class or upper middle class, and it’s important for our legislators to know that and in turn give our industry the credit it deserves.”
After the tour, Chabot sat for a roundtable discussion with Cincinnati-area AAHOA members. For over an hour, the hoteliers talked with Chabot about every issue on AAHOA’s priority list, like preserving like-kind exchanges.
Hoteliers educated Chabot on the benefits of like-kind exchanges and the need for it to protected under any tax reform Congress might consider. Chabot said he’d speak about it to the chair of the powerful tax-writing Ways and Means Committee, Rep. Kevin Brady (R-Texas), during their weekly meeting.
Lina Patel attended the roundtable and owns a Days Inn in Cincinnati. She’s attended AAHOA’s advocacy conferences in Washington for years, but meeting Chabot like this was a completely different experience.
“Having Chabot meet with us in our city created a platform for us to talk with him in a relaxed environment with more time to discuss issues in detail,” she said. “He was more engaged with us, and our conversations were interactive.”
Lina noted Chabot brought his top staff members with him who were taking notes and promised to follow up on several items.
Dhar echoed Lina’s sentiment about his experience hosting Rep. Ed Royce at his Fullerton, California, Holiday Inn & Suites.
“Legislators have so many groups that approach them – they don’t always understand who AAHOA is,” Dhar said. “Sometimes when you go to Capitol Hill there’s so much on their agenda that they don’t have much time to talk. Here we talked about several different things affecting hoteliers.”
Himself a small business owner, Royce has a keen understanding of the issues facing hoteliers like the overtime rule and joint employer standard. He represents the ethnically diverse 39th District of California, which covers portions of west Los Angeles County and northern Orange County.
Royce’s career in Congress has taken him in an entirely different direction, however. As the chair of the Foreign Relations Committee, he oversees all of the nation’s diplomacy and affairs abroad. An example of Royce’s responsibilities came to focus with this summer’s action by the U.S. State Department to send the country of Iran $400 million in exchange for freeing captured U.S. sailors. Royce made multiple appearances on cable news to discuss the news based on his expertise as the committee chair.
But all of his important duties in foreign affairs doesn’t mean he ignores the job creators in his district; just the opposite. Royce relished the opportunity to learn more about Dhar’s property.
“I enjoyed gaining a greater understanding of all that goes on behind the scenes to ensure a hotel runs smoothly,” said Royce. “The hospitality industry is critical to Southern California’s economy, and our community’s hotels provide opportunity for workers on every rung of the job ladder.”
One critical issue that the hotel owners discussed with Royce was the growth in frivolous lawsuits filed under the Americans with Disabilities Act against hotels and other small businesses.
Royce said he was aware of the issue but the hoteliers were able to shed new light on just how bad the situation has become for business owners, who are frequently sued with vague allegations and then asked for thousands of dollars to settle the lawsuit.
“Royce was very open to the solutions we talked about,” Dhar said. “It’s refreshing to see somebody who still has their feet on the ground, understands the grassroots of small business owners and takes that mentality to Capitol Hill.”
With their days in the life of hoteliers finished, Royce and Chabot left with a greater understanding of the business. They can advocate for hotels in Congress with first-hand knowledge of how it works. Plus, there are now at least two more savvy travelers who know what it takes to run a hotel the next time they check in. ■
Brandon VerVelde is the director of State and Local Government Affairs for the Asian American Hotel Owners Association and can be reached at [email protected].
Be prepared: New Overtime Rule is coming December 1, 2016
UPDATE: On November 22, a federal judge blocked the overtime rule from going into effect. AAHOA President and CEO Chip Rogers released the following statement on that day regarding the judge’s ruling:
“Small business owners and employees have reason to give thanks this Thanksgiving. Judge Mazzant’s injunction of the harmful overtime rule will finally give job creators and workers a breath of fresh air. The Labor Department’s overtime rule, crafted by executive order, was set to cause irreparable harm to workers, business owners, nonprofits, higher education institutions and even state governments. Now Congress can take time to craft a reasonable update to the overtime rules in 2017, based on actual economic studies and not a bureaucrat’s whim.”
President Barack Obama issued an executive order in 2014 directing the Department of Labor (DOL) to update the overtime rules for salaried employees.
The machine of government went to work, and on May 18, 2016, DOL issued the new rule. The rule increases the annual salary threshold for workers exempt from overtime. The old standard was $23,660 per year; the new standard is $47,476 per year.
Critics of the rule, including AAHOA, say that the large increase will result in fewer opportunities for workers to be promoted. If it’s such a large leap from an hourly position to an overtime-exempt salaried position, employers will only pick a select few for the jump.
Plus, for those salaried employees currently making less than the new standard, they’ll be forced to either go back to hourly positions – which will feel like a demotion – or they will have their hours limited, which in a way defeats the purpose of being a salaried employee.
Making matters worse, the salary thresholds will automatically rise every three years. AAHOA is working to roll back the rule, but, for now, it’s the law of the land.
For more information on how to comply with the rule, visit the DOL’s website at
www.dol.gov/featured/overtime.
