As Vanessa Sinders kicks off the weekly government affairs meeting at the American Hotel & Lodging Association offices in Washington D.C., dysfunction has hit a high watermark in our nation’s capital. On the Hill, Congressional leaders have spent the past week playing hot potato with the speaker of the house job while the country careens toward default. Now Congress is left with only a few days to raise the debt ceiling before immediately turning to an expiring highway bill and a new budget measure that will keep the government from shutting down in December. This is after spending the better part of the month failing to come together on anything more than designating October as “Filipino American History Month” and the first week of November as “National Veterans Small Business Week.” And while our elected representatives steer an entire branch of government wildly from one crisis to the next, the courts and local governments have stepped in to fill the void left by a legislative body that can’t get out of its own way to legislate.
In this new normal, advocacy and engagement on all fronts have largely supplanted traditional lobbying efforts on the Hill. As Sinders, AH&LA’s SVP of governmental affairs, goes around the table getting updates from each member of her staff, it’s apparent how deeply the association is involved in the issues impacting the industry. From pushing back against the National Labor Relations Board’s new interpretations of franchising to making sure short-term online rental marketplaces like Airbnb aren’t picking and choosing which regulations to follow and what taxes to pay, her team deftly moves from updates on federal regulatory agencies and city councils, to the latest rulings from appeals courts to Congress and the Administration. Each issue they discuss is a multilayered puzzle that needs to be worked on a daily basis.
The payoff of the AH&LA’s multilayered approach is a voice that matches the massive economic footprint of the lodging industry. A good example of this is how the association called attention to the deceptive practices of third-party booking sites this year. The move put hotels back on the offensive when it comes to the OTAs and it educated consumers and government leaders on the complicated relationship booking sites have with hotels. While it’s true that many travel sites are well heeled when it comes to working with hotel companies, some are intentionally out to con the average consumer by posing as an actual hotel website with a similar URL or a false phone number. Even more common are the sites that make it hard for consumers to see if they’re getting the best available room or that their reservation is non-refundable and they won’t receive loyalty points for their stay. “It started with our members,” Sinders says. “Even before we got members of Congress to weigh in and we started this whole media campaign, which has been extraordinary, some of our members explained to the FTC how booking through a third party could lead to confusion.” Before that, she added, the situation wasn’t entirely understood by legislators or regulators.
AH&LA’s concerted push against deceptive online practices took a page from how national political campaigns use clear and strategic narratives that can be propagated in the media. In the current era of a 24-hour media machine, tactics like these leverage the unique strengths of the business interests tied up in the lodging space. It’s also an effective way to tell the story of the importance of the lodging industry. “We represent an industry of 2 million jobs and we’re in every state and every congressional district,” Sinders says. “We couldn’t have a better story to tell.” With the way government operates becoming increasingly unfriendly to businesses, AH&LA’s role as industry advocate is more crucial than ever.
Politics is Local
Sinders came to the AH&LA after working for eight years at the Campaign to Fix the Debt, a bipartisan organization seeking to bring Congress and the administration together to forge a long-term debt deal. Before that she was chief of staff for former Sen. Scott Brown and a policy director for ex-Sen. Judd Gregg. Her deep relationships across both sides of the aisle have shaped her approach to advocacy. When Sinders and AH&LA President and CEO Katherine Lugar assembled the new government affairs team, they brought in people who had similarly deep backgrounds and experience in key policy areas.
“We have some big issues facing us—labor, short-term online rentals, and the evolving distribution landscape—so we identified one policy lead for each of these issues,” Sinders says. While one VP of government affairs, Brian Crawford, focuses on workforce and labor issues, another, Maryam Cope, concentrates her efforts on distribution and technology, and a third, Craig Kalkut, lends his expertise to business issues, travel and tourism, and short-term online rentals. Given their backgrounds, the approach made a lot of sense. “Brian had been chief of staff to a senior member of the house and worked on both the political side and the policy side, while Maryam had worked for a tech association and for the Senate commerce committee. And Craig had worked for two influential Senate Democrats—Sen. Conrad and Sen. Klobuchar.” Leveraging their expertise has been key to allowing the association to cover so much ground. “This approach helps us divide and conquer,” Sinders says. Another staff member, VP of state and local government affairs Troy Flanagan, works directly with AH&LA’s partner state associations to stay on top of the issues playing out on the local level.
No industry association focuses solely on national issues anymore, which is why state associations are so crucial to AH&LA’s success. “We deal with every level of government.” Sinders says. She points to what’s happening with Airbnb regulation as an example. “Just a year ago, there was little awareness of the issues surrounding Airbnb outside of big cities, and now, a year in, there’s action in 175 different locales around the country,” Sinders says. “And in 2014 there were only a handful of states considering legislation to regulate Airbnb. This year, there are 20 states, and that number is only going to increase.” It helps that AH&LA has worked with partner state associations to clearly communicate to local governments how short-term online rental marketplaces impact hotels in their cities. “Our partner state associations deserve a ton of the credit because they’re the ones on the ground who are pushing that legislation, but we’re providing the tools and resources and kind of national perspective that allows them to talk to their legislator or attorney general or whomever to put this item on the agenda.”
Issues Are National
In August, AH&LA took a stand in opposition to the merger of Expedia and Orbitz on the grounds that it would create a duopoly in which more than 95 percent of OTA bookings in the United States would be controlled by two competitors, Expedia and Priceline. It was a necessary move. “There’s a lot of opportunity to partner with tech companies like these, we just want to make sure that the rules for the road are not so tilted in any one direction,” says Maryam Cope. “While that’s not the most inspiring win, it’s worth the effort.” The Department of Justice ultimately approved the merger, but AH&LA’s move called attention to the potential negative impact this move would have on consumer choice and on the bad position it would put small and independent operators who already pay high commissions—as high as 25 percent—in their distribution. “We think the online marketplace is extremely important to the industry, but there should be a choice,” Sinders says. “The combination of Expedia and Orbitz would make up 75 percent of the U.S. OTA market. For us, that’s bad for consumers and bad for our hoteliers.”
The move generated a lot of attention, especially when Sens. Amy Klobuchar and Mike Lee wrote a joint letter calling on the Department of Justice to scrutinize the merger. “It was a good notice to the DOJ that this merger was something beyond our industry,” Sinders says. “It was going to affect consumers.”
“We looked at the numbers and found that the hotel industry was responsible for 15 percent of all e-commerce in the United States,” Cope says. “That translates into $154 billion in online transactions last year just from booking hotel rooms.” She adds that being able to present data like this helped the agencies looking at the merger to understand the lodging industry’s role in e-commerce. “They were able to see that not only are we a huge presence in e-commerce, but that our voice wasn’t been represented in these policy circles and on these policy issues.”
Letter writing backed up by data proof also helped AH&LA get the FTC to take notice of the deceptive practices of misleading online booking sites. “After hearing from our members how important this issue was, we knew needed to get the FTC to take action,” Sinders says. “You get the FTC to take action by getting members of Congress to weigh in and send letters.” Joining in the letter writing campaign was the entire Florida house delegation and Sens. Marco Rubio and Bill Nelson. While Sinders and Cope admit that initiatives like these take a lot of work to get moving, they also have the biggest payoff when it comes to educating Washington on the importance of the lodging industry.” In this case the FTC issued highly publicized alerts on deceptive online bookings that included advice on how consumers could make sure they were booking directly with a hotel.
Labor Pains
In August, the National Labor Relations Board issued a decision that expanded the definition of joint employer to include workers who are employed by an outsourced agency. While the case applies specifically to a waste management company (Browning-Ferris) and its subcontracted employees, the decision is raising concerns for franchisees, on which the hospitality industry relies heavily. These small business owners were already feeling attacked after the NLRB ruled McDonald’s a joint employer when it came to unfair labor practice charges, grouping McDonald’s Corporate with McDonald’s franchisees. In both rulings, the NLRB went out of its way to establish a new precedent, instead of using the joint employer standard that’s been around for 30 years, which requires there to be direct control to connect the two entities.
“Both decisions have very real potential consequences for hoteliers,” says Brian Crawford. “There’s legislation that’s been introduced in both the House and the Senate to codify the existing joint employer standard. Those bills have had Legislative hearings. Our goal is to get votes on those bills before the end of the year, though the President’s likely to veto them.” He adds that the McDonald’s case will likely take three to four years to litigate, but the battle is worth it. “Once there’s legal precedence, for all intents and purposes, the definition of a joint employer will have changed,” Crawford says. “That’s going to overturn 30 years of labor law and everything that people have known about who their bosses are.”
The other labor battle dominating Crawford’s to-do list is the Department of Labor’s proposed ruling that raises the threshold of overtime pay for salaried employees working more than 40 hours per week from $23,660 to $50,440. “So this may not be a big deal in San Francisco or New York because the vast majority of salaried employees are probably making above that, but it is in a place like Montana,” Crawford says. “I recently heard from a member in Billings, Montana, that the only way he’s going to be able to deal with this is to move the vast majority of his employees from salaried to hourly. This potentially limits their benefits and their hours, all because the administration has placed this new mandate on them.”
When it comes to pushing back on the NLRB and DOJ rulings, Crawford says that AH&LA has already put the wheels in motion. Sinders echoes his assessment and adds a note of optimism to the prospect of getting legislation through Congress codifying the longstanding joint employer standard. “We have a lot of support within the industry and when we have issues, we get people to mobilize.”
Making an Impact
In the end, AH&LA’s advocacy efforts pay off when the lodging industry’s interests are recognized on all levels of government. Sinders stresses how important it is for the association to be engaged at the earliest part of policy debates so it can influence the conversation in a way that ultimately benefits the lodging sector. That way hotels don’t take a back seat when new laws and regulations are being enacted.
