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Why Is Law Important in Hospitality Industry?

What is the importance of law in hospitality industry? What is the importance of hospitality law?

The Hospitality industry is the most volatile industry in relation to law suits. This is why if you are working in this arena it is important that you have a good understanding of the law relating to hospitality. From the time you decide to go on a holiday to the time you complete and come back home, a whole series of unfortunate incidents can arise that might spoil your well deserved break.

If you are working with an airline company; or travel and tourism agency; or hotels and tourist transportation, it is worth your measure of salt to know what you can do to prevent a potentially expensive lawsuit that might bankrupt you or your company.

What is Hospitality Law?

The most basic definition of hospitality law is the legal aspects of the hospitality industry. This refers to any laws and regulations that are specific to this industry – whether they are at the federal level, state level, or municipal level. A perfect example of hospitality law in practice is the Americans with Disabilities Act (ADA) which provides specific guidelines on how facilities and businesses must accommodate people with disabilities. These are the types of laws that exist because the people in the industry need special protection – something that is different than other businesses are likely to need. There are some general legal areas that are important to all businesses, but hospitality laws are something that applies very specifically to this industry.

Why Is Hospitality Law Important?

Hotels and other types of hospitality businesses are in the business of serving others, which makes this industry one that requires a significant amount of legal compliance. From hiring employees to contracting with vendors, hospitality businesses must follow a series of laws and regulations that protect both guests and employees. Moreover, hospitality businesses must also work to protect themselves by understanding how laws and regulations can be used to their advantage.

From hiring policies to intellectual property rights, there are many different laws that must be taken into consideration. Additionally, hospitality law also involves many different types of businesses, such as hotels, restaurants, and cruise ships. Therefore, it is important to understand how these laws apply to your business.

The context of the law relating to hospitality can be categorised into three types. The first is the law of tort, the second is the law of contract and the third is the law of agency. In this article we will analyse the law of tort.

The law of tort relates to areas such as trespass to person, land and personal property. The other area in the law of tort relates to the law of negligence.

An Example to Understand The Importance of Hospitality Law:

An Example to Understand The Importance of Hospitality Law:

If you were a hotel manager and discovered that a non-registered person is using the swimming pool, what would you do?

The simple answer is that you can evict the person from the premise as he or she is a trespasser. But what if as a trespasser and whilst using the pool, he or she was injured because the pool area was wet and slippery and lacked proper maintenance?

Obviously if the person injured was a guest, he could certainly bring an action against your hotel in negligence. This is because as the management of the hotel you owe a duty to your guest and by you not maintaining your premise there was a breach of this duty of care. The guest having suffered an injury will suffice for him to bring an action in the law of tort. This is quite certain. But what is uncertain is whether the same level of protection from the law can apply to a person who is a trespasser in the hotel premise. This is something that requires a deeper analysis.

If this matter goes to court, the probable test the court will apply is based on a concept called causation. This is to look at the situation objectively and decide based on what lawyers famously would like to brag called the 'reasonable man' argument. (We will discuss this in another article). Based on this concept, what it means is that whether the person injured was a guest or trespasser - the key question would be whether the injury caused, was it by the direct negligence on the part of the hotel in not maintaining its premises?

If the answer is that the injury was caused by the negligence of the hotel in not maintaining the premise then this would be enough grounds for the both the guest and the trespasser to sue.

But of course it is not as simple as that. There are other considerations to analyse. Such as how and why the trespasser was able to access the swimming pool? And the concept of the innocent trespasser!

This is just one example of the important of law in the hospitality industry. There are other factors to consider as well. 

Service and Employment Contracts

One of the first legal documents that any new business owner needs to create is a service agreement or employee contract. These can be tailored to the specific situation in your business, but they provide a written record of the expectations that you have for those employees and vice versa. Things like hours of operation, benefits, and wages are often laid out in this type of contract. An even more important part of this service agreement is the termination clause. You’ll want to include a series of steps for either party to end the contract. This should be specified in detail, including information like the date of the termination, the effective date, and what the terms of the termination are. This can be used to terminate contracts or provide a level of protection if someone tries to sue you.

Intellectual Property Protection

The only way you can make significant money from your business is if you are protected from others stealing your ideas. This is where knowing about intellectual property law is important – it helps you protect the information and processes that are unique to your business. The most common types of IP law for businesses are copyright and trademark law. The reason these are important for the hospitality industry is that many businesses in this field rely on original recipes for their food or drinks. A copyright allows you to protect those recipes by written down the exact steps of making them. It’s also important to protect other aspects of your business that may be unique – whether it’s the decor, the marketing materials, or even the layout of the building. Anything that is unique to your business is also something that someone could try to steal.

Food and Beverage Safety

While it’s important for any business to be careful with food safety, it’s particularly important for the hospitality industry. You’ll want to make sure you have the proper temperature control, cleanliness standards, and food handling process in place. In fact, you’ll need to meet the specific standards set by health departments in your state – something known as the “health code” or “health laws”. You may have heard about the foodborne illnesses outbreaks that have been in the news lately. This is one of the reasons why food safety is now being regulated at a federal level. The Food Safety Modernization Act was enacted by the FDA in 2011 and requires all businesses to have a food safety plan in place. You can find the specific requirements for your business by looking at the FDA’s website.

FAQ Section: Importance of Law in the Hospitality Industry

FAQ Section: Importance of Law in the Hospitality Industry

1. Why is understanding the law crucial for those in the hospitality industry?

The hospitality industry is particularly susceptible to legal disputes. Whether you're involved with an airline, travel agency, hotel, or tourist transportation, understanding the law can prevent costly lawsuits that could jeopardize your business. From the moment a guest plans a vacation to their return home, numerous incidents can occur that might lead to legal complications.

2. What is hospitality law?

Hospitality law pertains to the legal aspects specific to the hospitality industry. This includes laws and regulations at federal, state, or municipal levels tailored to the unique needs of this sector. For instance, the Americans with Disabilities Act (ADA) provides guidelines for accommodating individuals with disabilities, a requirement distinct to the hospitality industry.

3. How does hospitality law differ from other business laws?

While there are general legal areas applicable to all businesses, hospitality laws are tailored to the specific challenges and requirements of the hospitality sector. These laws address the unique interactions between businesses and their guests, ensuring both parties' protection.

4. Can you provide an example illustrating the importance of hospitality law?

Imagine a scenario where a non-registered individual uses a hotel's swimming pool and gets injured due to poor maintenance. If the injured person was a guest, they could sue the hotel for negligence. However, if the individual was trespassing, the legal implications become more complex. This example underscores the intricate nature of hospitality law and the need for businesses to be well-versed in it.

5. How does hospitality law protect businesses?

Hospitality law offers guidelines on various aspects, from hiring policies to intellectual property rights. For instance, service and employment contracts lay out expectations for employees, while intellectual property law safeguards unique business ideas. Understanding these laws helps businesses in the hospitality sector protect themselves from potential legal disputes.


Think about how you can protect yourself from potential lawsuits if you are working in the hospitality industry. How relevant do you think an understanding of the law will ensure that you know what to do when any form of unfortunate event were to occur.

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