WASHINGTON (Jan. 10, 2024) – American Hotel & Lodging Association (AHLA) President & CEO Chip Rogers released the following statement today after legislation that would have destroyed the hotel industry’s franchise model stalled in the New Jersey State Senate.
“New Jersey state senators made the right choice in letting S3165/A1958 stall in the legislative session that concluded late Monday. The legislation would have severely limited hotels’ ability to enforce the quality, service, and safety guidelines guests know and trust. In doing so, it would have destroyed the hotel industry’s franchise model – a beacon of success that has created millions of jobs and helped thousands of Americans realize the dream of owning their own business,” said AHLA President & CEO Chip Rogers. “Moving forward, AHLA is committed to working with lawmakers to protect the hotel industry from similar legislation, which could drive well-known and respected hotels out of New Jersey and cost the state thousands of jobs.”
Background info
The New Jersey General Assembly passed A1958 in May 2023, but the bill failed to even get a hearing in the state senate.
The legislation unfairly targeted the hotel industry and would have put the government in the middle of all franchisor-franchisee business relationships. Additionally:
- It would have severely limited a franchisor’s ability to enforce brand standards – the quality, service, and safety guidelines guests know and trust.
- It could have led hotel brands to discontinue their loyalty point programs in New Jersey.
- It conflicted with federal trademark law and would have led to costly litigation between hotel brands and hotel owners.
The current hotel franchise model gives small-business owners the opportunity to grow their businesses quickly by leveraging the hotel brand names guests know and trust.
- More than 50% of all U.S. hotels are franchised
- Franchised hotels supported more than 2.5 million U.S. jobs in 2023
- Franchised hotels were expected to generate nearly $25 billion in state and local tax revenue in 2023
- More info about S3165/A1958
- More info about hotel franchising
