WASHINGTON—American Hotel & Lodging Association (AHLA) President and CEO Chip Rogers released a statement 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 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.”
The New Jersey General Assembly passed A1958 in May 2023, but the bill failed to get a hearing in the state senate.
The legislation targeted the hotel industry and would have put the government in the middle of all franchisor-franchisee business relationships. Additionally:
- It would have limited a franchisor’s ability to enforce brand standards.
- 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 allows small-business owners to grow their businesses by leveraging the hotel brand names guests know and trust. Additional insights include:
- More than 50 percent 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.
