Governor Gavin Newsom has vetoed legislation opposed by the California Chamber of Commerce that would have imposed additional burdens and costs on the lodging industry.

The vetoed bill, AB 1074 (Lorena Gonzalez; D-San Diego), had the potential to cause further harm to the hospitality industry by forcing a new service provider for a hotel to hire the previous contracted provider’s employees and navigate statutory barriers erected around operational positions, staffing redundancies, technical abilities, and staffs’ general ability to meet the hotel’s needs. The mandate would have increased operating costs, threatened small businesses, and represented a significant shift in how the law approaches contracting.

The hospitality industry has been one of the hardest hit during the COVID-19 pandemic. More than 20% of all hotels closed. According to the Employment Development Department, the Leisure and Hospitality industry lost 24% of its workforce in 2020, which was the highest job loss percent/per industry. Over 120,000 hotel workers were laid off. It is estimated that it will take hotels at least three to five years to financially recover, even longer in certain areas of the state. State and local “right to recall” mandates have slowed down hotels’ abilities to reopen. Now is not the time to place another burden on the industry.