As a hotel operator, your top priority is likely on making a profit and ensuring that your guests are happy with their stay. Managers work behind the scenes, handling numerous day-to-day responsibilities for all parts of hotel operations, including sales, marketing, supervising personnel, security, maintenance and food and beverages.
Managing a hotel may also involve the potential for liability related to a wide variety of legal issues, such as negligence, tort claims, common law contract, and antitrust laws. For the most part, however, the basic legal duties for hotel operators most often leading to liability issues are those related to the manager’s role as a fiduciary to the owner and an innkeeper to the guests.
If you own or operate a hotel in the U.S. Virgin Islands, being aware of liability issues will help you protect you and your business.
Liability to hotel owners
Guidelines relating to a hotel manager’s potential liabilities to its owner did not emerge until the 1990s, when the case of Woolley v. Embassy Suites, Inc. changed the industry’s understanding of this specific legal relationship. The case established that the nature of a relationship between a hotel owner and manager is comparable to that of a principal and its agent. This means that a hotel manager owes the hotel owner fiduciary duties, including the duties of loyalty, good faith, fair dealing and full disclosure.
Although the owner does have the power to terminate the hotel manager’s employment for any reason, the manager can claim damages resulting from an early termination as long as they have not breached any fiduciary duties. If the manager has breached those duties, however, the owner can terminate the manager’s employment and follow up by seeking damages related to those breaches.
These types of lawsuits have become increasingly common since the Woolley case, resulting in managers taking greater notice of their fiduciary duties and potential liabilities.
Liability to guests
The duties of a hotel manager as an “innkeeper” have developed over many years. Under common law, an innkeeper’s duties include providing food, lodging and safe harbor for guests. In addition to common law requirements, many states and territories including the U.S. Virgin Islands have included innkeeper laws in their statues, requiring an innkeeper to provide lodging and food without discrimination(see 27 VIC 406). In addition, while an innkeeper is not directly responsible for the safety of guests, a hotel manager must still use “reasonable care” in promoting guest safety.
These principles have been brought up in numerous tort and negligence claims. The lawsuits, filed by guests, typically allege that injuries resulting from defects in the guest’s room or other unsafe hotel conditions violated the innkeeper’s duty to maintain the hotel premises in a reasonably safe condition. These lawsuits have highlighted the importance of properly maintaining hotel walkways, stairs, entrances, swimming pools and other potentially dangerous areas.
If you own or operate a hotel in the U.S. Virgin Islands and would like to learn more about your legal rights and responsibilities, speak with an experienced hospitality law attorney for further guidance.
BoltNagi is a widely respected and well-established business and hospitality law firm serving hotel owners and managers throughout the U.S. Virgin Islands.