Tourism Law Primer

Question: What do you do when you find three lawyers buried up to their necks in sand?  Answer: Get another foot of sand.

I generally don’t promote lawyer jokes, being one of them myself, but this one advances an article about the legal risks in the tourism industry, where lawyers have been making significant money suing businesses engaged in the tourism trade.  A good example is the Americans with Disabilities Act (ADA) which has resulted in an avalanche of litigation.

For example there is an individual in California who specializes in filing suits (more than 700 to date) alleging that toilet paper dispenser heights don’t meet the 40-inch requirement of the ADA, causing him humiliation, emotional pain and physical injuries.  These suits have made him millions of dollars from settlements.  There are many more, and even worse, examples of such “shakedown” suits.

No doubt the intent behind the ADA is good, and California businesses have spent several to hundreds of thousands of dollars each to make their businesses accessible to all.  However, the way the ADA is written and enforced, a few individuals and their attorneys seem to be making remarkable sums of money, even where building inspectors have previously signed off on all such modifications.  Many smaller businesses have simply been put out of business.

Businesses are demanding reform in this area.  A new California law establishes a process to voluntarily certify individuals as “access specialists” in an effort to aid businesses in becoming compliant with the ADA.  The California Chamber of Commerce is promoting further legislation that would create a safe harbor for businesses who utilize these access specialists.

Beyond ADA issues, those in the tourism trade need to be aware of their legal responsibilities in this current litigious environment, so that their customers enjoy their free time.  You want to see them next time on a repeat visit, not in court. 

People are incredulous to hear about the substantial numbers of specific laws and legal issues pertaining to this industry.  I will merely list some of them: licensing; pervasive regulation of health, food, alcohol, etc.; protection of a guest’s right of privacy; “diminution of holiday values” claims; personal injuries and property losses; overbooking; safety and security issues; and the list goes on and on.  A comprehensive treatment of these laws is not possible here (whew!), so the remainder of this article touches upon some of the more obscure or humorous legal issues involved, and ends with a checklist of risk mitigation recommendations. 

Did I say there were license issues?  Any hotel, restaurant, or other concern in California that manufactures a product of milk for the use of any patron or employee shall obtain a milk products plant license.  Products of milk include frozen milk confections.  Hopefully, they don’t include chocolate milk. 

Let’s visit another obscure law.  In California, if (maybe it should be “when”) there is an earthquake, flood, fire, riot, storm, or other natural disaster declared in any county or city, and for a period of 30 days following that declaration, an owner or operator of a hotel or motel may not increase the hotel or motel's regular rates, as advertised immediately prior to the declaration of emergency, by more than 10 percent, unless the owner or operator can prove that the increase in price is directly attributable to additional costs imposed on it for goods or labor used in its business, to seasonal adjustments in rates that are regularly scheduled, or to previously contracted rates.  So much for demand and supply theory!

Has a customer recently claimed loss of her fur coat in your restaurant?  Liability for such losses is often premised upon the proximity of the coat to the customer.  If, for example, the customer chooses to hang her coat on a hook within a few feet of her seat then liability rarely attaches to the restaurant for its loss.  A sign, “Watch your overcoat, we are not responsible,” if conspicuous, might get you off the hook, so to speak.

There are numerous criminal laws specifically related to the travel and hospitality industry.  For example, any person engaged in the transportation of persons by taxicab or other means of conveyance who knowingly misdirects a prospective guest of any hotel, inn, or similar, or knowingly takes such a prospective guest to a hotel, inn, or similar different from that of his instructions from such prospective guest is guilty of a misdemeanor.  Paying a driver to do so is also a misdemeanor. 

We end with ways to mitigate the legal risks of the tourism business. 

(1)  Know the law and current legal trends.  Read trade books, journals and other publications closely aligned with your business.  Attend conventions, particularly those sessions designed for risk management.  Adopt current policies, procedures and forms in writing which take into account the applicable law, so that you and your staff have a convenient source of such knowledge and safe practices. 

(2)  Audit your operations and facilities for safety issues.  If one person has been hurt, or almost hurt, others will follow.  Don’t put off fixing safety issues coming to your attention.  Prior knowledge can be used against you in court. 

(3)  Ensure that your personnel are properly trained, and that all training incorporates review and use of your firm’s current policies, procedures, and forms. 

(4)  Check that your vendors, subcontractors, and other business partners are, and remain, properly licensed, reputed, and insured.  Deal only with those who are financially stable. 

(5)  Agreements are very important.  Have a written agreement with everyone you deal with paying particular attention to performance standards and rights to terminate for breaching same.  If this is your first exposure to a particular type of agreement, seek legal counsel.  It is a good investment.  You won’t make large mistakes on the first of this particular type of agreement due to ignorance of the legal risks involved.  In addition, you will know how to do these transactions routinely in the future without legal counsel, unless you are presented with a significant departure from previous terms and conditions that you are not sure about. 

(6)  Procure and maintain good insurance coverage.  Review the policies carefully to determine if they really cover the types of specific risks your tourism business entails.  Obtain riders for significant risks not covered by the policies. 

(7)  If you have not already done so, investigate the feasibility of placing your tourism business assets and risks inside of a limited liability entity, such as a corporation or limited liability company. 

Bon voyage!

"Thank you! This is helpful.  And, so are you!  Thank you for always being available to me and [my company] when a legal matter arrises."

Who We Are

Image of Bruce Leonard Beal

The present firm arose from Bruce's move from the Los Angeles area to Dana Point, where he and his wife wanted to live since they first  discovered it. 

Bruce comes from the Senior Counsel position in a large world class international technology, engineering and construction corporation with thousands of employees, hundreds of large clients, world class projects, hundreds of affiliates, and complex transactions and litigation.  Before that, he gained significant major law firm experience, including arguments before state appellate and supreme courts.

His desire in moving to Dana Point was and still is to bring his world class experience to smaller and emerging businesses in the area.  This experience produces more valuable legal and business judgment from him than is available from newer attorneys or attorneys whose practices are more specialized and localized.  His extensive Resume is here Résumé.

Marlene wears all hats other than "Lawyer" in the firm,  including Paralegal, Marketing, Accounting, and Office Management and Assistance. Her extensive Resume is here Résumé.

Disclaimer: The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of my knowledge as of the date of the article. I have no duty to update this article. The information, examples and suggestions presented in this article have been developed from sources believed to be reliable. This article should not be viewed as a substitute for the guidance and recommendations of a retained professional and should not be construed as legal or other professional advice. In addition, I do not endorse any actions addressed herein, unless they are produced or created by me.  I recommend consultation with me or other competent legal counsel and/or other professional advisors before applying this material to any particular factual situations.