When politics enter the conversation, discussions about the role of government and regulatory impact on the hotel industry become polarizing and partisan depending on political affiliations.
The role of government in handling the national economic crisis? Liberals assert the economic downturn would have been much worse without government intervention while conservatives contend that ham-fisted bumbling failed to improve the situation—and quite possibly even made things worse.
The trend toward beefing up regulatory agencies and strengthening mechanisms for government oversight? Conservatives argue it is a reactionary, unnecessary, anti-business stance; liberals counter it is a necessary correction after years of lax regulation.
These bipolar debates, driven by perspectives on either end of the political spectrum, are rarely productive. On the ground of the hotel industry, hospitality professionals do not have the luxury of getting into philosophical discussions about the appropriate role of government. Whatever our personal politics might be, when it comes to supporting and growing our industry, it is all business. From health-care reform and immigration policy, to taxes and organized labor, government programs and policies have a profound impact on the health and prosperity of the hotel industry.
Hotel owners and operators have a vested interest not only in those policies that directly address their concerns but also in any significant piece of business-related legislation. By staying informed and engaged with legislative trends, owners can monitor their economic and political fortunes in some very important ways.
The state of the industry
So where does the industry stand right now? The good news is that concerns for a double-dip recession have eased somewhat in recent weeks, and while most analysts are trimming their 2012 growth predictions a bit, the general sense is that the worst is behind us.
The recovery might not happen quite as fast as we would like, but things do seem to be headed in the right direction. Revenue-per-available-room numbers are up, the worrying supply-and-demand imbalance is being corrected and surveys show that hotel owners and operators increasingly are optimistic about the future of the industry.
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Politically, however, the forecast is somewhat cloudier. There is increased staffing in virtually every government agency that interacts with business. From the Occupational Safety and Health Administration to the National Labor Relations Board, a number of prominent organizations and agencies are becoming more active and more politically assertive. Though many of the goals of these groups are commendable, it’s the poorly thought-out policies and unnecessarily punitive legislation that often stifles the industry and the economy.
While there remains a political backstop in Congress that is preventing reactive and hasty legislation from getting pushed through, there has been a strong administrative push that is contributing to an unmistakable overall trend: The number of U.S. Immigration and Customs Enforcement audits is up, and OSHA recently announced stricter enforcement standards. With the controversial Employee Free Choice Act seemingly dead in the water, activist components of the NLRB are working to achieve those same goals through administrative actions. In fact, the NLRB recently approved a proposal to allow union elections in as little as 10 days after a petition is filed.
Even indirect government action can have a potentially significant impact on the industry. For example, the White House is asking all agencies to watch their travel spending and reduce or eliminate non-essential travel. Hospitality professionals already are seeing a waning of government participation in trade shows, conventions and government meetings, not to mention the troubling message that travel is merely a luxury.
Yet, this administration deserves recognition for passing the Travel Promotion Act, a landmark piece of legislation signed into law 4 March 2010 that was intended to address the significant and costly decline in U.S. tourism from international visitors over the last decade. The Act created the Corporation for Travel Promotion, which in November rebranded itself as Brand USA in conjunction with the launch of a new international marketing campaign.
Unfortunately, despite bright spots like the Travel Promotion Act, the political climate is fostering a pro-regulation environment. With a presidential election coming up in 2012, it is likely the incumbent establishment will cater more to their political base, and moderation and middle-of-the-road policies will be an election-year casualty. Compromise seems to be a dirty word in Washington these days and that shows no sign of changing for the foreseeable future.
A call to action
From an industry perspective, it is important we continue to work hard to promote awareness, get involved and do our part to encourage a relationship with Federal and state governments; a collaborative and productive relationship is more prosperous than a contentious and adversarial one.
For individuals or organizations looking to get involved, groups like the American Hotel & Lodging Association are a great place to get started. The AH&LA is a national organization working to push back against the regulatory burden and to serve and promote the interests of hoteliers everywhere from the front desk to Washington. Like other groups, the AH&LA only is as strong as its members, and the more that industry professionals understand that these issues have a meaningful and profound impact on everyone’s bottom line, the more that membership will continue to grow.
As an industry, we are starting to wake up to the fact that we cannot be silent. Because if we do not tell our story about the economic importance of tourism and hospitality, and if we do not provide a counterweight to the smothering impact of policies that do not adequately take our interests into account, who will?
First Hospitality Group Inc. has been involved in the development, ownership, and management of hotels since 1985. Currently, the First Hospitality Group, Inc. portfolio of over 52 hotels consists primarily of Hilton and Marriott affiliated assets. In addition, First Hospitality Group, Inc. has ownership interests and manages hotels affiliated with InterContinental, Hyatt, and Carlson. For further information, visit www.fhginc.com.
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