Chapter 1 PDF

LEGAL ASPECTS IN TOURISM AND
HOSPITALITY
3G E-LEARNING
LEGAL ASPECTS IN TOURISM AND HOSPITALITY
3G E-LEARNING
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EDITORIAL BOARD
Aleksandar Mratinković is born on May 5, 1988. in Arandjelovac, Serbia. He has graduated on Economic high
school (2007), The College of Tourism in Belgrade (2013), and also has a master degree of Psychology (Faculty
of Philosophy, University of Novi Sad). He has been engaged in different fields of psychology (Developmental
Psychology, Clinical Psychology, Educational Psychology and Industrial Psychology) and has published several
scientific works.
Dan Piestun (PhD) is currently a startup entrepreneur in Israel working on the interface of Agriculture and
Biomedical Sciences and was formerly president-CEO of the National Institute of Agricultural Research (INIA)
in Uruguay. Dan is a widely published scientist who has received many honours during his career including
being a two-time recipient of the Amit Golda Meir Prize from the Hebrew University of Jerusalem, his areas
of expertise includes stem cell molecular biology, plant and animal genetics and bioinformatics. Dan’s passion
for applied science and technological solutions did not stop him from pursuing a deep connection to the farmer,
his family and nature. Among some of his interest and practices counts enjoying working as a beekeeper and
onboard fishing.
Hazem Shawky Fouda has a PhD. In Agriculture Sciences, obtained his PhD. From the Faculty of Agriculture,
Alexandria University in 2008, He is working in Cotton Arbitration & Testing General Organization (CATGO).
Felecia Killings is the Founder and CEO of LiyahAmore Publishing, a publishing company committed to
providing technical and educational services and products to Christian Authors. She operates as the Senior
Editor and Writer, the Senior Writing Coach, the Content Marketing Specialist, Editor-in-Chief to the company’s
quarterly magazine, the Executive and Host of an international virtual network, and the Executive Director
of the company’s online school for Authors. She is a former high-school English instructor and professional
development professor. She possesses a Master of Arts degree in Education and a Bachelor’s degree in English
and African American studies.
Dr. Sandra El Hajj, Ph.D. in Health Sciences from Nova Southeastern University, Florida, USA is a health
professional specialized in Preventive and Global Health. With her 12 years of education obtained from one of
the most prominent universities in Beirut, in addition to two leading universities in the State of Florida (USA),
Dr. Sandra made sure to incorporate interdisciplinary and multicultural approaches in her work. Her long years
of studies helped her create her own miniature world of knowledge linking together the healthcare field with
Medical Research, Statistics, Food Technology, Environmental & Occupational Health, Preventive Health and
most noteworthy her precious last degree of Global Health. Till today, she is the first and only doctor specialized
in Global Health in the Middle East area.
Fozia Parveen has a Dphil in Sustainable Water Engineering from the University of Oxford. Prior to this she has
received MS in Environmental Sciences from National University of Science and Technology (NUST), Islamabad
Pakistan and BS in Environmental Sciences from Fatima Jinnah Women University (FJWU), Rawalpindi.
Igor Krunic 2003-2007 in the School of Economics. After graduating in 2007, he went on to study at The
College of Tourism, at the University of Belgrade where he got his bachelor degree in 2010. He was active
as a third-year student representative in the student parliament.Then he went on the Faculty of science, at the
University of Novi Sad where he successfully defended his master’s thesis in 2013. The crown of his study
was the work titled Opportunities for development of cultural tourism in Cacak“. Later on, he became part of
a multinational company where he got promoted to a deputy director of logistic. Nowadays he is a consultant
and writer of academic subjects in the field of tourism.
Dr. Jovan Pehcevski obtained his PhD in Computer Science from RMIT University in Melbourne, Australia in 2007.
His research interests include big data, business intelligence and predictive analytics, data and information science,
information retrieval, XML, web services and service-oriented architectures, and relational and NoSQL database
systems. He has published over 30 journal and conference papers and he also serves as a journal and conference
reviewer. He is currently working as a Dean and Associate Professor at European University in Skopje, Macedonia.
Dr. Tanjina Nur finished her PhD in Civil and Environmental Engineering in 2014 from University of Technology
Sydney (UTS). Now she is working as Post-Doctoral Researcher in the Centre for Technology in Water and
Wastewater (CTWW) and published about eight International journal papers with 80 citations. Her research
interest is wastewater treatment technology using adsorption process.
Stephen obtained his PhD from the University of North Carolina at Charlotte in 2013 where his graduate
research focused on cancer immunology and the tumor microenvironment. He received postdoctoral training
in regenerative and translational medicine, specifically gastrointestinal tissue engineering, at the Wake Forest
Institute of Regenerative Medicine. Currently, Stephen is an instructor for anatomy and physiology and biology
at Forsyth Technical Community College.
Michelle holds a Masters of Business Administration from the University of Phoenix, with a concentration in
Human Resources Management. She is a professional author and has had numerous articles published in the
Henry County Times and has written and revised several employee handbooks for various YMCA organizations
throughout the United States.
HOW TO USE THIS BOOK
This book has been divided into many chapters. Chapter gives the motivation for this book and the use
of templates. The text is presented in the simplest language. Each paragraph has been arranged under a
suitable heading for easy retention of concept. Keywords are the words that academics use to reveal the
internal structure of an author’s reasoning. Review questions at the end of each chapter ask students to
review or explain the concepts. References provides the reader an additional source through which he/she
can obtain more information regarding the topic. For an easier navigation and understanding, this book
contains the complete 3G curriculum of this subject and the topics.
Diet and Nutrition 3
In nutrition, diet is the sum of food consumed by a person or other organism.

The word diet often implies the use of specific intake of nutrition for health or
weight-management reasons (with the two often being related). Although humans
are omnivores, each culture and each person holds some food preferences or some
food taboos. This may be due to personal tastes or ethical reasons. Individual dietary
choices may be more or less healthy.
People diet for all types of reasons as there are no shortage of reasons for wanting
LEARNING OBJECTIVES
to live a healthier life. There are also a wide variety of options when it comes to
selecting a diet that might work for you. Here is a closer look at some of the different
types of diets that people are using all around the world.
CHAPTER
1
■ The Paleo Diet: This is a natural way of eating, one that almost abandons all
See what you are going to cover and what you

intake of sugar. The only sugar in a Paleo diet comes from fruit. However,
abandoning sugar is not the only stipulation. Processed foods and grains are
also eliminated from the Paleo diet. The fewer number of carbohydrates in
your system leads to a decreased amount of glucose. So your system will then
should already know at the start of each chapter.

begin to use fat as its fuel source. In a Paleo diet, dairy is also eliminated.
So what can be eaten? A Paleo diet consists of fish, fowl, vegetables, fruits,
GENETIC ENGINEERING IN FOODS nuts, oils, sweet potatoes, eggs and meat, so long as that meat is grass-fed
and not grain-fed.
■ The Blood Type Diet: Some doctors have started to research diets that coincide
with particular blood types. The premise of these diets attempts to match
people with their common dietary needs based on their blood type. For
example, individuals with type O blood are recommended to eat lots of food
that are high in protein. In order to lose weight, spinach, red meat, seafood
ABOUT THIS CHAPTER

All the food we eat - every grain of rice and kernel of corn - has LEARNING and broccoli are suggested while dairy should be avoided. Those with type
been genetically modified. None of it was here before mankind OBJECTIVES
A blood are recommended to avoid meat and place an emphasis on turkey,
learned to cultivate crops. The question isn’t whether our food
has been modified, but how. After studying this chapter, tofu, and fruit while weight loss is contingent on eating a diet that consists
you will be able to: primarily of soy, seafood and vegetables. Individuals with type B and AB
-Michael Specter 1. Discuss about blood also have their own dietary restrictions and recommendations.
An introduction is a beginning of section which

Genetically Modified
Food ■ The Vegan Diet: This diet is a form of a vegetarian diet as it eliminates meat
INTRODUCTION 2. Explain Methods Used and animal products. One of the primary effects of this diet is that it reduces
Genetically engineered food is any food product which has To Create GM Plants
the intake of cholesterol and saturated fat. It takes some planning, but if a
been altered by either adding or removing certain genes from 3. Identify Products From
states the purpose and goals of the topics which

its makeup. This is done in a laboratory in order to give food Genetically Modified vegan diet is rationed out properly, it can have many positive effects. Studies
products certain characteristics. For instance, some genetically Organisms have proven that those who practice a vegan diet minimize their overall risk
engineered food is injected with certain bacteria or cells which of coronary heart disease, obesity and high blood pressure. To compensate
make it naturally pest-resistant. The use and consumption of for a lack of meat, vegans must find a way to incorporate more sources of
are discussed in the chapter. It also starts the topics protein and vitamin B-12 into their diets.
genetically modified foods is heavily debated amongst health
advocates and environmental agencies alike.
■ The South Beach Diet: This diet was first introduced in 2003 and is based on
the premise of changing one’s overall eating habits by balancing out one’s
in brief.
everyday diet. Certain carbohydrates are completely avoided. It does not
eliminate carbohydrates altogether, but aims to educate dieters on which carbs
3G E-LEARNING
REMEMBER 2 Food Science and Health: Diet and Disease
but also for all the functions of the body we may not even Throughout most of the world, protein supplies between
Diet and Nutrition 7
think about. Processes like breathing, pumping blood around 8 and 16 % of the energy in the diet, although there are
This revitalizes a must read information of the

the body and thinking also require calories. wide variations in the proportions of fat and carbohydrate in
So, foods and drinks provide the calories we need to go different populations. In more prosperous communities about
about our daily lives, but consuming more calories than we 12 to 15 % of energy is typically derived from protein, 30 to 40
% from fat, and 50 to 60 % from carbohydrate. On the other
topic.
need over a period of time will cause weight gain. This is
because, any extra calories we consume but we don’t use, hand, in many poorer agricultural societies, where cereals
will just be stored as fat. comprise the bulk of the diet, carbohydrate provides an even
larger %age of energy, with protein and fat providing less. The
Healthy eating is one of the best things you can do to
human body is remarkably adaptable and can survive, and even
prevent and control health problems such as heart disease,
thrive, on widely divergent diets. However, different dietary
high blood pressure, type 2 diabetes, and some types of cancer.
patterns are associated with particular health consequences.
1.1 HUMAN NUTRITION 1.1.2 BMR and REE: Energy Balance
KEYWORDS
Human nutrition, process by which substances in food are
Energy is needed not only when a person is physically active
Keyword transformed into body tissues and provide energy for the
but even when the body is lying motionless. Depending on Remember
full range of physical and mental activities that make up
Malnutrition is a
an individual’s level of physical activity, between 50 and
human life. Body fat helps our
condition that results 80 % of the energy expended each day is devoted to basic
The study of human nutrition is interdisciplinary in body to maintain body
metabolic processes (basal metabolism), which enable the body
This section contains some important definitions

from eating a diet in temperature, insulating
which one or more character, involving not only physiology, biochemistry, and to stay warm, breathe, pump blood, and conduct numerous body organs against
nutrients are either molecular biology but also fields such as psychology and physiological and biosynthetic activities, including synthesis shock. It also promotes
not enough or are too anthropology, which explore the influence of attitudes, beliefs, of new tissue in growing children and in pregnant and healthy cell functions
preferences, and cultural traditions on food choices. Human
that are discussed in the chapter. A keyword is

much such that the diet lactating women. Digestion and subsequent processing of of our body. Fat plays
causes health problems. nutrition further touches on economics and political science food by the body also uses energy and produces heat. This a vital role as a buffer
as the world community recognizes and responds to the phenomenon, known as the thermic effect of food (or diet- to isolate and store
suffering and death caused by malnutrition. The ultimate induced thermogenesis), accounts for about 10 % of daily any offending unsafe
an index entry that identifies a specific record

goal of nutritional science is to promote optimal health and energy expenditure, varying somewhat with the composition substances in our
reduce the risk of chronic diseases such as cardiovascular of the diet and prior dietary practices. Adaptive thermogenesis, system into a new fat
disease and cancer as well as to prevent classic nutritional tissue until removed
another small but important component of energy expenditure,
deficiency diseases such as kwashiorkor and pellagra. from body.
or document. It also gives the extra information

reflects alterations in metabolism due to changes in ambient
temperature, hormone production, emotional stress, or other
factors. Finally, the most variable component in energy
expenditure is physical activity, which includes exercise and
to the reader and an easy way to remember the

other voluntary activities as well as involuntary activities such
as fidgeting, shivering, and maintaining posture. Physical
activity accounts for 20 to 40 % of the total energy expenditure,
even less in a very sedentary person and more in someone
word definition. who is extremely active.
3G E-LEARNING 3G E-LEARNING
v
DID YOU KNOW 10 Food Science and Health: Diet and Disease
of eating will result in excess fat being stored around the

Stress Diet Nutrition 201
1.1.3 Body Mass, Body Fat, And Body

upper half of your body (mainly the abdomen). This type of
This section equip readers the interesting facts and

Water
fat around the abdomen can lead to serious health problems,
The human body consists of materials similar to those found mainly concerning the heart. Continued stress will only make
in foods; however, the relative proportions differ, according this problem worse.
figures of the topic. to genetic dictates as well as to the unique life experience of
the individual. The body of a healthy lean man is composed
of roughly 62 % water, 16 % fat, 16 % protein, 6 % minerals,
Poor Health and Immune System
Under stress, the body’s natural defenses can be severely
and less than 1 % carbohydrate, along with very small amounts
affected and leave the person with a weaker immune system.
of vitamins and other miscellaneous substances. Females
This leaves the person more prone to contracting illnesses.
usually carry more fat (about 22 % in a healthy lean woman)
If the stressed person falls ill, then this will only lead to an
and slightly less of the other components than do males of
increased amount of stress inflicted on the body.
comparable weight. Although many
EXAMPLE
The body’s different compartments—lean body mass, body Imbalances in the Blood Sugar techniques have
fat, and body water—are constantly adjusting to changes in the traditionally been
internal and external environment so that a state of dynamic When someone stressed does not eat the right amount of food developed to deal
equilibrium (homeostasis) is maintained. Tissues in the body or the correct amount of nutrients, they will start to encounter with the consequences
of stress, considerable
The book cabinets’ examples to illustrate specific

are continuously being broken down (catabolism) and built inconsistencies in their blood sugars. These inconsistencies lead
research has also been
up (anabolism) at varying rates. to the person not behaving as they normally would.
conducted on the
Examples include: prevention of stress, a
ideas in each chapter.

The epithelial cells lining the digestive tract are replaced at a dizzying speed of ■ Tiredness subject closely related
every three or four days, while the life span of red blood cells is 120 days, and to psychological
connective tissueis renewed over the course of several years.
■ Lapses of concentration resilience-building.
■ Mood swings
If stress is not dealt with properly in the short term, the
Although estimates of the %age of body fat can be made by body will suffer in the long haul with blood sugar problems
direct inspection, this approach is imprecise. Body fat can be that are much more serious, such as diabetes.
measured indirectly using fairly precise but costly methods,
such as underwater weighing, total body potassium counting,
and dual-energy X-ray absorptiometry (DXA). However, more 5.4. COMBATING STRESS WITH A NUTRITIONAL
practical, albeit less accurate, methods are often used, such as MANAGEMENT PROGRAM
anthropometry, in which subcutaneous fat at various sites is
measured using skinfold calipers; bioelectrical impedance, in The impact that stress can have on your health is very serious
which resistance to a low-intensity electrical current is used and can cause problems to every major system in your body.
to estimate body fat; and near infrared interactance, in which We have mentioned previous that improper means of dealing
an infrared light aimed at the biceps is used to assess fat and with stress can result in conditions such as heart disease,
protein interaction. Direct measurement of the body’s various headaches, weight gain and cancer. With the right nutrition,
compartments can only be performed on cadavers. you can reduce the impact that stress has on your body and
effectively repair any damage that has been done prior to this.
What a balanced nutrition also does is prepare your body for
stress that may be thrust upon your body in the future.
ROLE MODEL 166 Food Science and Health: Diet and Disease Diet and Nutrition 39
ROLE MODEL CASE STUDY

A biography of someone who has/had acquired HEALTHY NEST NUTRITION-CASE STUDY, FOOD
remarkable success in their respective field as FREDERICK ALLEN
In the history of diabetes Frederick Madison Allen (1876-
INTOLERANCE & SENSITIVITY
A Glimpse into How Healthy Nest Works with Food Intolerance or Sensitivity &
Role Models are important because they give us 1964) will always be associated with the “starvation diet”
which kept some patients with juvenile-onset diabetes alive
until they could receive insulin. Fasting was not a new
Digestive Distress
the ability to imagine our future selves. treatment but the novel aspect of Allen’s was his insistence
that the severest diabetics should be kept permanently
underweight. The previous philosophy had been that,
after glycosuria had been abolished by fasting, the patient
should be fattened up. Allen received tremendous publicity and support from the
foremost diabetes specialist of the time, Elliot Joslin. Yet, it is difficult to work out in
retrospect how successful his treatment was because of his habit of attributing deaths
CASE STUDY
to infractions by patients. Critics thought his regimen was heartless and cruel and his
biographer Alfred Henderson wrote that he ‘attempted to exercise control over his
patients like his laboratory animals’. Client: Male, 32 Years Old
Allen was born in Iowa and trained in medicine in California where he served
This reveals what students need to create and his internship in 1907-8. He also attended the University of Chicago medical school PROBLEM: Client had very bad gas & bloating—no matter what he ate. By the end of
where he was greatly influenced by the physiologists Anton Carlson and George N the day, he would feel like his stomach was HUGE. The problem was persistent and
Stewart. Between 1909 and 1912, he worked in the newly developed Department of getting progressively worse, causing embarrassing moments with friends and family.
provide an opportunity for the development of key Public Health and Hygiene at Harvard, first as a volunteer and then with a poorly
paid fellowship which turned into three years intensive research on diabetes. Because
his papers were so long, no journal would publish them and he borrowed $5000 from
These issues would cause large amounts of time in the bathroom with either bouts of
explosive diarrhea. Brain fog was also an increasing problem.
skills such as communication, group working and his father to print Studies Concerning Glycosuria and Diabetes (1913), a tome of 1,179
pages in which he gave an exhaustive review of the literature on metabolism in general and
Session 1
Client came to Healthy Nest Nutrition with 3 days of diet written down in a the
diabetes in particular.
problem solving. One of his early experiments used cats to find out if sustained hyperglycaemia
caused diabetic complications. The animals were given daily injections of 100ml dextrose
Healthy Nest Food Log. He also had filled out the Healthy Nest Client Intake which
is a bit of history about himself and his family as well as a metabolic assessment form
which gauges relative strengths and weaknesses all along the digestive tract.
subcutaneously for 17 months. Conclusions from the autopsy were that long-standing
hyperglycaemia did not cause lowered resistance to infection, skin troubles, cataract, FOOD: Client was eating a standard American diet. He was eating cereal for
diabetic symptoms, acidosis or proteinuria. Allen’s work which led to the principle breakfast, Mountain Dew as an afternoon pick-me-up and ramen for dinner several
of alimentary rest was based on animal experiments in which he removed varying days per week. He was eating Chipotle burritos many days for lunch.
amounts of the pancreas to produce the equivalents of mild or severe human diabetes.
Dogs left with 20 per cent of their pancreas or more did not develop diabetes. The fate Change Recommendation
of those with 80–90 per cent of their pancreas removed depended on what they ate.
A therapeutic smoothie with micro-greens was suggested which he just LOVED! It
On a low-carbohydrate diet, they remained relatively well, like middle-aged humans
tasted great, filled him up and gave him so much energy that he didn’t need the
with diabetes — since Eskimos lived on very little carbohydrate, Allen called this an
Mountain Dew in the afternoons. Also, we changed his go-to foods for lunch & dinner.
216 Food Science and Health: Diet and Disease 218 Food Science and Health: Diet and Disease
KNOWLEDGE CHECK KNOWLEDGE CHECK REVIEW QUESTIONS

1. Which of the following statements is true 1. How stress impacts nutrition? Explain.
This is given to the students for progress check a.

b.
In small quantities, stress is good
Too much stress is harmful
2.
3.
Why do we get stressed?
Discuss about effects of stress.
at the end of each chapter.

c. All stress is bad 4. What do you understand by stress and diet?
d. Only ‘a’ & ‘b’ are right 5. How can a nutritionist help with stress and diet?
2. Stress management is about learning 6. Discuss about superfoods for stress relief.
a. How to avoid the pressures of life 7. Explain the nutrient and stress management.
b. How to develop skills that would enhance our body’s adjustment when we
are subjected to the pressures of life
Check Your Result
c. Both ‘a’ & ‘b’ are true
REVIEW QUESTIONS 3.
d. None of the above
Which of the following statements is true about stress management
1. (d)
7. (e)
2. (b)
8. (d)
3. (d)
9. (d)
4. (e)
10. (d)
5. (e)
11. (d)
6. (e)
12. (d)
a. Stress management is learning about the connection between mind and body
This section is to analyze the knowledge and ability b.

c.
Stress management helps us control our health in a positive sense
Stress management teaches us to avoid all kinds of stress
REFERENCES
1. Amin T, Нakur M (2014) A Comparative Study on Proximate Composition,
of the reader.
Phytochemical Screening, Antioxidant and Antimicrobial Activities of Linum
d. Only ‘a’ & ‘b’ are right usitatisimum L. (flaxseeds). International Journal of Current Microbiology and
4. Which of the following are the basic sources of stress Applied Sciences 3: 465-481.
a. The Environment 2. Bourre JM (2004) Roles of unsaturated fatty acids (especially omega-3 fatty acids)
b. Social Stressors in the brain at various ages and during ageing. J Nutr Health Aging 8: 163-174.
c. Physiological 3. Bravo JA1, Forsythe P, Chew MV, Escaravage E, Savignac HM, et al. (2011)
Ingestion of Lactobacillus strain regulates emotional behavior and central GABA
d. Thoughts
REFERENCES
receptor expression in a mouse via the vagus nerve. Proc Natl Acad Sci U S A
e. All of the above 108: 16050-16055.
5. Examples of environmental stressors are 4. Bravoa JA, Forsythe P, Chewb MV, Escaravageb E, Savignaca HM, et al. (2011)
a. Weather Ingestion of Lactobacillus strain regulates emotional behavior and central GABA
References refer those books which discuss the b.

c.
Traffic
Financial problems
5.
receptor expression in a mouse via the vagus nerve. National Academy of Sciences
of the United States of America. Raleigh.
Brody S, Preut R, Schommer K, Schürmeyer T (2002) A randomized controlled
topics given in the chapters in almost same manner.

d. Substandard housing
trial of high dose ascorbic acid for reduction of blood pressure, cortisol, and
e. Only ‘a’ , ‘b’ & ‘d’ are right subjective responses to psychological stress. Psychopharmacology (Berl) 159:
6. Examples of social stressors are 319-324.
a. Financial problems 6. Goldberg JA, Guzman JN, Estep CM, Ilijic E, Kondapalli J, et al. (2012) Calcium
b. Divorce entry induces mitochondrial oxidant stress in vagal neurons at risk in Parkinson’s
disease. Nat Neurosci 15: 1414-1421
c. Loss of a loved one
vi
TABLE OF
CONTENTS
Preface xi
Chapter 1 Introduction to Hotel Law 1

Introduction 1
1.1 An Overview of Hotel and Catering Law 3
1.1.1 Important Laws Applicable to the Hotel Industry 9
1.1.2 Hotels and Motels Law and Legal Definition 10
1.1.3 Leisure and Hospitality Law 11
1.1.4 Laws Governing Hotel Industry 13
1.1.5 Importance of Knowledge of Laws in the Hospitality Industry 16
1.2 Hotel Business: Licensing and Registration Requirements 18
1.2.1 Licenses Required to start a Restaurant 18
1.2.2 Hotel Tariff and Basis of Charging Rooms 21
1.2.3 Hospitality Labor Laws 24
1.2.4 Service Tax for Hotel Industry 26
1.2.5 Expenditure Tax in Hotels or Restaurants 30
Summary 34
Knowledge Check 35
Review Questions 37
References 38
Chapter 2 Overview of Applicable Acts & Laws 41

Introduction 41
2.1 Laws Applicable to the Industry 42
2.1.1 Some of the Important Licenses Required by Hotels under Various Acts 43
2.1.2 The Many Laws that Hotel Owners must observe 44
2.1.3 Assess Contracts 46
2.2 Contract Act 47
2.2.1 What is a Contract? 48
2.2.2 What is Agreement? 48
2.2.3 What is Promise? 48
2.2.4 Essential Elements of Contract 48
2.2.5 Important Rules Relating to an Offer, as Provided in
the Contract Act 50
2.3 The Factories Act 51
2.3.1 Applicability of the Act 52
2.3.2 Scheme of the Act 52
2.3.3 Important Provisions the Act 52
2.3.4 Amendments related to Factories Act 56
2.3.5 Hotel industry included under Factories Act 57
2.4 Sale of Goods Act 58
2.4.1 Who is Responsible? 58
2.4.2 Returning Faulty Goods 59
2.4.3 Faulty Goods Replaced or Repaired 59
2.4.4 Proving Your Claim for Faulty Goods 60
2.4.5 Experts’ Reports 60
2.4.6 Rights and Duties of the Seller 60
2.4.7 The Consumer Rights Act 62
2.5 Prevention of Food Adulteration Act 66
2.5.1 The Payment of Wages Act 71
2.5.2 Object of the Act 71
2.5.3 Responsibility for Payment of Wages 74
2.5.4 Fixation of wage-periods. 74
2.5.5 Time of Payment of Wages. 74
2.5.6 Provision for Timely Payment of Wages 75
2.5.7 Deductions from Wages 76
2.6 The Employees’ Provident Funds and Miscellaneous Provisions Act 77
2.6.1 The Workmen’s Compensation 81
Summary 88
Knowledge Check 89
Review Questions 90
References 91
Chapter 3 Hotel- Guest Relationship 93

Introduction 93
3.1 Role of Innkeepers 94
3.1.1 Duty to Receive Guests 97
3.1.2 Right to Evict Persons Admitted as Guests 98
3.1.3 Right to Evict Persons Admitted as Guests 99
3.1.4 Duty to Persons Who Are Not Guests 100
3.1.5 Duty to Provide Safe Premises 100
3.2 Removal of Guests 103
3.2.1 A Hotel Guests’ Bill of Rights 105
3.3 Hotel Keeper’s Duties on Hotel Guest’s Privacy Protection 106
3.3.1 Respect of the Guest Room Privacy 107
viii
3.3.2 Registration of the Guest under the False Name 108
3.3.3 Non-Receiving Certain Guests or Persons 108
3.3.4 Discretion of the Hotel Staff 109
3.3.5 Hotel-Keeper’s Contractual Liability for Non-Proprietary Dam-Age
to Violation of Hotel Guest’s Privacy 110
3.4 Guest Relation Officer 112
3.4.1 Guest Relation Officer Duties and Responsibilities 113
3.4.2 Guest Relation Officer Skills 114
3.4.3 Role of a Guest Relations Manager 115
Summary 123
Knowledge Check 124
Review Questions 125
References 126
Chapter 4 Laws governing Lost and Found Property 129

Introduction 129
4.1 Concept of Lost and Found Property 131
4.1.1 Title to Lost or Misplaced Personal Property 131
4.1.2 Statutes and Local Ordinances Governing Lost and Found Property 132
4.1.3 Internal Procedure for Handling Lost and Found Property 135
4.1.4 Hotel Lost And Found Procedures 135
4.2 Lost, Mislaid, and Abandoned Property 137
4.2.1 Lost Property 138
4.2.2 Mislaid Property 142
4.2.3 Abandoned Property Law 143
4.2.4 Reporting Lost Property 147
4.3 Hotel Defenses to Liability Claims 148
4.3.1 Claim Property 150
4.3.2 Hospitality Law 152
4.3.3 Contracts and Reservations 152
4.3.4 Risk Management 154
4.4 Statutory Limits on Hotel’s Liability 156
4.4.1 Liability for Damage or Loss to Guest Property 157
4.4.2 Guest Reservations 159
4.4.3 Harm or Damage Caused by Other Guests 161
4.4.4 Harm or Damage Caused by Third Persons 162
4.4.5 Natural Disasters, Acts of God, Public Enemies,
Catastrophic Exposures 163
4.4.6 Removal of Guests and Guests of Guests 167
Summary 171
Knowledge Check 172
References 174
ix
Chapter 5 Food Law and Regulation 175
Introduction 175
5.1 Overview of Food Law 176
5.1.1 Risk analysis Principle 177
5.1.2 Transparency 179
5.2 The Structure of Food Law 179
5.3 Food Regulations 181
5.3.1 The Regulatory Status of Food Ingredients and Additives 184
5.3.2 Adulteration and Misbranding 185
5.3.3 The Global Food Trade: Risk from Adulterated and Misbranded Foods 190
5.3.4 US Department of Agriculture programs 192
5.3.5 Environmental Protection Agency programs 198
5.5.6 The Food Safety Modernization Act 199
Summary 216
Knowledge Check 217
References 220
Chapter 6 Liquor Legislation 221

Introduction 221
6.1 Concept of Liquor Act 222
6.1.1 Objectives of the Liquor Act 223
6.1.2 Objectives of the Gaming and Liquor Administration Act 224
6.1.3 Liquor License 226
6.2 Bar Operations 229
6.2.1 Classification of Bar 230
6.2.2 Large Underbars and Back Bar Equipment’s 239
6.2.3 Other Large Equipment’s 241
6.2.4 Bar Staffing 242
6.3 Responsible Beverage Service 254
6.3.1 Effects of Alcohol 256
6.3.2 Social Concern 257
6.3.3 Legal Concern 258
Summary 260
Knowledge Check 261
References 263
Index 265
x
PREFACE
Tourism is a give and take traffic, which presupposes an exchange of tourism
arrivals between countries although to varying extents. Business law, business
ethics, and legal aspects are the subjects that include in the business and related-
business curriculum. The importance of legal and ethics components in the
hospitality and tourism curricula has long been studied in the past decades.
Hospitality law is important to the many food, travel, and lodging industries
because it ensures that these industries comply with: employment regulations,
employee/customer/food safety, licenses for events, customer treatment/
accommodations, and industry regulations. Hospitality laws were made to
ensure that restaurants, hotels, motels, and other public accommodations are
providing safety measures within their establishments to ensure the security of
their patrons. People are expecting to eat good foods when they visit a restaurant.
When lodging at a hotel or motel, people are expecting a good night’s stay free
from any type of harm. They should be protected from any type of criminal
activity, such as robbery or assault. What protect us from harm are the laws in
place to lessen the chances of these things occurring.
Organization of the Book

This book is methodically divided into Six Chapters. In this book, you will learn
more about hospitality laws and the regulatory bodies that govern them. You will
be given examples for clarity of hospitality laws and how they are used to protect
you in public accommodations.
Chapter One starts with an overview of hotel and catering law. This chapter
provides the essential background on licensing and registration requirements.
Chapter Two explain laws applicable to the hospitality industry related to food
service, travel, and lodging industries. It governs the various nuances of the hotel,
restaurant, bar, spa, country club, meeting, and convention industries.
Chapter Three is aimed to hotel- guest relationship. Hotel guests should be aware of certain laws
and regulations or policies that could impact their visits. This chapter will examine the role of
innkeepers, removal of guests, and hotel keeper’s duties on hotel guest’s privacy protection.
The roles and responsibilities of a guest relation officer are presented in last section.
Chapter Four presents insight into laws governing lost and found property. The basic theory
behind this distinction is that owners of mislaid property are more likely to remember where
the property is. Allowing property owners to keep it makes it easier for the true owner to
recover the property.
Chapter Five is intended to cover food law and its regulations to encourage the production
of safe and wholesome foods, and to prohibit the sale of foods that are unsafe or fraudulent.
These laws and regulations, together with food control organizations, ensure the safety of
domestically produced, imported, and exported food products.
Chapter Six presents an understanding of Liquor Act which regulates and controls the sale
and supply of alcohol and certain aspects of the use of premises on which alcohol is sold or
supplied.
xii
CHAPTER
1
INTRODUCTION TO HOTEL LAW
Hospitality is central to the restaurant business, yet it is a LEARNING

hard idea to define precisely. Mostly, it involves being nice to OBJECTIVES
people and making them feel welcome. You notice it when it is
After studying this chapter, you
there, and you particularly notice it when it is not. A single will be able to:
significant lapse in this area can be your dominant impression
of an entire meal. 1. Give An overview of Hotel
and Catering Law
- John Lanchester 2. Discuss about Hotel Business:
Licensing and Registration
Requirements
INTRODUCTION
Hospitality law is a legal and social practice related to the
treatment of a person’s guests or those who patronize a
place of business. Related to the concept of legal liability,
hospitality laws are intended to protect both hosts and guests
against injury, whether accidental or intentional. Hospitality
laws is relate to food service, travel, and lodging industries.
2 Legal Aspects in Tourism and Hospitality
It governs the various nuances of the hotel, restaurant, bar, spa, country club, meeting,
and convention industries.
Hospitality laws were created to ensure that restaurants, hotels, motels, and other
public accommodations are providing safety measures within their establishments to
ensure the well-being of their patrons. People are expecting to eat good foods when
they visit a restaurant. When lodging at a hotel or motel, people are expecting a good
night›s stay free from any type of harm. They should be protected from any type of
criminal activity, such as robbery or assault. What protects us from harm are the laws
in place to lessen the chances of these things occurring.
A hotel is a commercial establishment offering lodging to travelers and sometimes

to permanent residents, and often having restaurants, meeting rooms, stores, etc., which
may be used by the general public. Most states require restaurant and inn owners to
apply for and receive a license to operate such facilities. The owner is under a duty to
furnish proper accommodations, and to exercise proper care for the safety and peaceful
stay of the guest, while the guest must exercise due care to refrain from any disruptive
3G E-LEARNING
Introduction to Hotel Law 3
or offensive conduct. An innkeeper is under an additional

duty to offer service and lodging to all persons unless he or
she has some reasonable grounds for refusal. An innkeeper
may not refuse service to any person on ground that would
violate civil rights laws. Owners are prohibited from refusing
to accommodate or entertain persons on account of their race,
color, religion, or national origin.
1.1 AN OVERVIEW OF HOTEL AND

CATERING LAW
The hotel and catering industry is one the world’s fastest Keyword
growing industry and revenue earner. It has developed rapidly
over the last decade and employs approximately 10% of the Tourism is travel
world labor force. The hotel industry is an essential part of for pleasure or
tourism. With the growth in tourism, hotels have seen rapid business; also the
theory and practice
expansion as well. The standards of hotels are rising and of touring, the
trained professionals are in great demand. business of attracting,
accommodating, and
entertaining tourists,
and the business of
operating tours.
Hotels are establishments that provide paid accommodation

and other services to guests. Hotels have come a long way
and developed into a specialized business sector. The aspect
of law regulating the hotel and catering industry is generally
known as hospitality law. Hospitality law is the body of law
relating to the foodservice, travel, and lodging industries. It
governs the specific degrees of hotels, restaurants, bars, spas,
country clubs, etc. Hospitality law does not just involve one
area of law. It encompasses a wide variety of practice areas
such as contracts, antitrust and tort law. The hotelier or caterer
enters into a legal relationship not only with his customers, but
3G E-LEARNING
also with his employees, suppliers, trade unions, travel agents and operators, as well
as subcontractors in the line of trade. The government and other professional bodies
regulate this industry, therefore the hotelier or caterer must be aware of the boundaries
within which he can operate. In this regard, a sound knowledge of the law as well
as fundamental business management skills of the hospitality profession is essential.
Hospitality law has evolved as a specialty within the legal profession in the last
several decades. It is also offered as a course on the undergraduate and graduate levels
as well as in some law schools. A typical hospitality law course covers the history
of hospitality law, the impact of federal and state civil rights laws on the hospitality
industry, and an extensive discussion of contract law, including discussions of remedies
for overbooking and a guest’s breach of the contract regarding a reservation. Hospitality
law courses today also include contracts that are entered into on the internet, which is
very common in hotel bookings, as well as negligence, innkeeper rights, guest rights,
and employment practices. An increase in bookings through the internet has caused
hospitality law to continue to advance.
There are laws regulating hotel and catering issues in various countries especially
in places like the US and the UK. These laws usually regulate quite a number of issues
pertaining to hospitality. They include issues such as:
■■ Theft or crime committed within hotel premises
■■ Guests refusing to settle their bills
■■ Ensuring the safety of hotel guests
■■ Breach of contracts for reservation
■■ Health and safety of employees in catering operations
■■ Children and young people working in catering
■■ Dismissal of employees
■■ Safety of guest’s property
■■ Catering/restaurant permits
■■ Price lists and stipulations
■■ Safety and working conditions for employees
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In the US, hotel operators have a duty to their guests and to their guests’ property.
This duty of care to the guests does not insure the guests’ safety, but requires the
operator to “act prudently and use reasonable care”. This means, among other things,
that an operator can be held liable if he or she is found negligent. An operator also
must ensure that all of the guests’ personal information is retained and destroyed
according to proper and recommended procedure. Every state and the District of
Columbia have enacted statutes to limit innkeepers’ liability. These statutes require
that notice be posted for room occupants. Commonly, these notices are posted on the
backs of hotel room doors so there can be no question as to whether the hotel guest
can see and read the statute and liability provisions.
American statutes also govern bailment. A bailment is the delivery of an item or

property, for some purpose, with the expressed or implied understanding that the person
receiving it shall return it in the same or similar condition in which it was received,
when the purpose has been completed. Safety deposit boxes and luggage storage are
common examples of bailment for the hospitality industry. Lodging and restaurant
operators are responsible for the safety of the guest’s property when a bailment is
established. Restaurant operators in the United States have a duty to sell food that
is suitable for buying and selling. “Truth in Menu” laws govern descriptions of food
in menus. These laws ensure that the customer receives what the menu says he or
she will. They also govern the ingredients, nutritional descriptions, preparation style,
and more. The US Food and Drug Administration (FDA) and the National Restaurant
Association produce a helpful guide for the restaurant industry. Organizations such as
the National Restaurant Association and the American Hotel & Lodging Association
are helpful platforms for their respective industries.
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Risk management is of paramount concern for any hotel,

large or small, because of the kind of issues that arise in
the field of hospitality law. The usual problems involving
risk management are slip-and-fall cases or crimes against
guests, including assault and rape, break-ins and theft from
the rooms, discriminatory issues involving both employees and
Keyword guests, and issues of payment and bailment. Some hotels and
management companies organize trainings for their employees
Risk management with regard to risk-management issues and have established
occurs anytime an written guidelines and procedures addressing risk management.
investor or fund
The major hotels and management companies have law firms,
manager analyzes and
attempts to quantify mostly on retainer, to provide risk-management assistance
the potential for losses and guidance as needed.
in an investment.
An employer has a duty to take reasonable care to ensure
the employees safety at work. So therefore an employee may
sue an employer for breach of an implied term of his or her
contract of employment. This principle was illustrated in the
UK case of Waltons and Morse v. Dorrington [1997] IRLR (488)
where a woman resigned from her job because her employer
would not provide her with a ‘smoke-free’ work area. She
sued the employer for constructive dismissal. Her claim was
upheld by an industrial tribunal and by the Employment
Appeal Tribunal. At common law an employer is under a duty
to take reasonable care to ensure the health and safety of his
or her employees. This duty is derived from the general duty
owed to one’s neighbor, following the principle enunciated
by Lord Atkin in Donoghue v. Stevenson [1932] AC 562 (HL).
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In the UK, the Conditions of Employment Regulations Act (enacted in 1952) states
that an employer may dismiss an employee and the employee may abandon service on
his part if there is a “good and sufficient cause” (Section 34(14)). Dismissal however
must not be seen as an opportunity to demonstrate the employer’s “power” over his
employees or as a means to counter insubordination. In Hamburg, Germany, catering/
restaurant permits are issued by the appropriate Consumer Protection Office. In order
to meet the requirements for a license to be issued, one must demonstrate, among other
things, that the premises to be used for the hotel and catering business are suitable
(by means of construction drawings/floor plans of all business areas inclusive of rooms
designed to accommodate staff).
In the hospitality industry, consumers are informed of prices by means of price lists.
These must be displayed in all pubs, restaurants and similar establishments where food
and drinks are served. In Hamburg, one important foundation for displaying prices
is the Regulation Governing the Display of Prices of 14th March 1985. This regulation
contains the most important principles regarding pricing information for the goods
and services on offer in retail outlets, in the services sector and in the hospitality and
accommodation industry. Everything that is served must be priced. The prices indicated
in the price lists must be final prices, i.e. they must include any additional charges
(e.g. VAT). Price lists must be displayed or provided as follows:
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1. the price list must be provided in the form of a food

or drinks menu prior to taking the order or on specific
request
2. or a food and drinks menu must be displayed on
every table
3. Or a food and drinks menu must be otherwise displayed
where it is clearly legible.
In the event of any theft or crime committed on the premises
of a hotel, this must be reported to the Police. Generally every
hotel must also report to the Police cases of death or lunacy
of guests on their premises. In another vein, when a guest
refuses to settle a bill for services rendered, the hotelkeeper
can secure payment of bills by retaining the property of the
guest.
Remember
In most countries,
for liability waivers
to be enforceable,
notification of
the waiver must
be posted in an
accessible, visible
location (usually at
the front desk or in a
People would always have the need to travel and stay in
common area of the
business), and must hotels or other lodging facilities which could be for business or
be printed in clearly pleasure. This reality has made the hotel and catering industry
legible text. a very crucial and vibrant sector of the global economy. In
this regard, the importance of the laws that regulate this
industry cannot in any way be overemphasized. Operators and
practitioners in this industry, relevant government agencies
and lawyers must all put hands on deck to make the legal
framework for the hospitality and catering industry to be not
only dynamic but to adjust and suit today’s global realities.
With globalization and the internet, the horizon of hospitality
law would continue to grow and expand, so also must lawyers,
practitioners and regulatory bodies adjust to this reality.
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1.1.1 Important Laws Applicable To the Hotel

Industry
The majority of the legislations governing the hospitality and
hotels industry can be divided into three main sectors.
■■ The first head is the legislation for the construction
and commissioning of hotels, restaurants, guest houses
and other establishments, and includes the Foreign
Exchange Management Act, the industrial licensing
policies, land laws and various development control
orders issued by the central and state governments.
■■ The second head has legislation for the operation,
maintenance and management of establishments, food
and hygiene standards. It also includes insurance
laws, fire safety and weights and measures regulation. Keyword
Further, various licenses, such as a liquor license, dance
Luxury tax is an ad
license, lodging house license, eating house license, valorem tax placed on
police permissions, a license under the Shops and products or services
Establishment Act, or a license under the Food and that are deemed to
Drug Administration Act, granted on an annual basis. be non-essential or
unneeded.
■■ The third head has rules regarding taxation,
employment and other contractual relationships. This
includes laws on income tax, service tax, expenditure
tax, excise duty, luxury tax, entertainment tax, as well
as laws on employment matters like Apprentice Act,
ESI Act, etc.
The Important Licenses Required By Hotels under Various

Acts
There are numerous licenses required by hotels and the catering
industry depending on the type of business and location of
the same. These licenses help to safe guard the organization
the employees and the customers.
■■ Prevention of Food Adulteration Act
■■ Food Safety and Standards Act: (Refer Annexure)
■■ The Legal Metrology Act
■■ Copyrights Act
■■ The Foreign Exchange Management Act (FEMA).
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■■ The State specific Shops and Establishments statutes:

■■ The Employees State Insurance Act:
■■ The Provident Funds Act: It is a Central Government
Legislation.
■■ The Apprentices Act:
■■ The Air (Prevention and Control of Pollution) Act, 1981
■■ The Water (Prevention and Control of Pollution) Act,
1974
■■ Hotel Insurance Policies
■■ Other important Legislations: Laws related to local
land norms
1.1.2 Hotels and Motels Law and Legal

Hotels proliferated Definition
throughout Western
Europe and North Hotels and motels are regulated under the police power of
America in the 19th
century, and luxury
the state to guard the health and safety of patrons. A hotel
hotels, including the is a commercial establishment offering lodging to travelers
Savoy Hotel in the and sometimes to permanent residents, and often having
United Kingdom restaurants, meeting rooms, stores, etc., which may be used
and the Ritz chain by the general public. Many states have created administrative
of hotels in London
and Paris and
bodies or agencies such as a state hotel and restaurant
Tremont House and commission, or a state board of health to regulate inns and
Astor House in the restaurants. Most states require restaurant and inn owners to
United States, began apply for and receive a license to operate such facilities.
to spring up in the
later part of the
century, catering to
an extremely wealthy
clientele.
Innkeepers and patrons have reciprocal obligations and

duties. There are many different types of hospitality laws,
but one thing they all have in common is the protection of
the customer’s rights and safety. They also protect customers
from being misguided, deceived, or duped by any public
3G E-LEARNING
establishment. But for the sake of creating a section that is to the point, we will only
focus on two hospitality laws: Hotel Motel Fire Safety Act and the Truth in Menu Law.
Hotel Motel Fire Safety Act

The Hotel Motel Fire Safety Act is a federal law passed in 1990. It requires that all
lodging facilities three stories or higher have fire extinguishers and a sprinkler system
in each room. Naturally the purpose of this act is to protect guests from losing their
lives in case of a fire. Also, the law mandates that no federal employee is to stay at a
hotel/motel that does not have a proper fire safety plan. This is a type of hospitality
law because it attempts to regulate the ways in which lodging facilities implement
their safety plans. If properly implemented, it can most definitely save lives.
Truth in Menu Law

Many restaurants are guilty of presenting food on menus dishonestly. For example,
some restaurants may make claims to how they prepare their food or where they
purchased their food when in reality, it is not true. If you claim to be an organic
restaurant, that means you are preparing food without chemicals. If you are claiming
to be an all vegan restaurant that means you are not using dairy products in the foods
you serve. If you claim to only sell antibiotic-free chickens to the grocery store that
means that your chickens were never given bacterial fighting drugs any time before
slaughter. Whatever you make claim to on your menu or website has to be true. If
not, you can be sued for misrepresenting a product.
1.1.3 Leisure and Hospitality Law

Hospitality law is an area of practice related to the hotel, resort, golf, private club,
timeshare, restaurant, and travel industries. Hospitality attorneys provide counsel
3G E-LEARNING
to owners, operators, developers, brands, service providers,

lenders, and investors on many industry-related issues,
including:
■■ Strategic planning
■■ Development, acquisition, and disposition
■■ Branding and licensing
■■ Financing, refinancing, and restructuring
■■ Operating and development agreements
■■ Joint venture, partnership, and limited liability
company agreements
■■ Corporate, multi-, and single-asset transactions
Keyword ■■ Multi-state representations
Discrimination
■■ Product and program structuring
is treatment or ■■ Mergers and acquisitions
consideration of, or
making a distinction
■■ Dispute resolution
in favor of or against, Additionally, hospitality clients require experience across many
a person based on areas, including:
the group, class, or
category to which the ■■ Corporate. Offering guidance on corporate governance
person is perceived to and SEC requirements. Advising corporations, boards
belong.
of directors, board committees, corporate officers,
shareholders, limited liability companies, and others
regarding best practices, composition, and procedures;
oversight and self-evaluation systems; guidelines, and
codes of conduct; fiduciary responsibilities; executive
compensation and succession; financial reporting
and internal investigations; and proxy statement
preparation.
■■ Securities. Assisting with all aspects of public equity
and debt offerings, as well as growth strategies such
as an IPO. Assist with a variety of securities related
matters, including SEC and stock exchange regulation
compliance.
■■ Labor and employment. Providing training and tools
for effective labor-management relations and helping
develop policies for compliance with state and federal
labor, discrimination, and wage and hour laws.
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■■ Privacy. Advising on compliance with applicable global privacy laws and

regulations as well as on internal and customer-facing policies, procedures,
and practices. Providing counsel on information management, data security
issues, and regulatory requirements.
■■ Consumer finance. Representing companies in matters such as state and federal
consumer finance laws, money-laundering, and payment card laws relating to
credit, debit, gift, and virtual cards.
■■ Intellectual property. Assisting with trademark protection and maintenance;
infringement enforcement issues; compliance counseling on advertising, sales,
marketing, pricing, promotions, and sweepstakes; co-branding and strategic
partnerships; and advertising terms and conditions. Providing strategic counsel
on information technology matters, including software, licensing, and technology
outsourcing agreements, leasing, and maintenance.
■■ Real estate. Representing developers and owners before local, regional, and state
agencies on zoning, land use, impact fees; transportation; and infrastructure
requirements, as well as financing and other development-related issues.
■■ Environmental. Providing counseling on litigation, transactional due diligence,
consulting and compliance services, and the effects of current and pending
legislation.
■■ Tax. Assisting with tax matters, from transaction planning, dispute resolution,
and policy development, to real estate capital markets transactions, including
the formation of real estate funds, real estate financings, joint ventures,
recapitalizations, and dispositions.
■■ Litigation. Providing support for all matters, including litigation, alternative
dispute resolution, civil lawsuits, and criminal or government investigations.
■■ ADA. Providing counseling on due diligence, compliance services, effects of
pending legislation, transactional due diligence, and litigation.
■■ FCPA. Providing counseling on overseas business practices and risk management.
1.1.4 Laws Governing Hotel Industry

There are many laws, regulations and codes to consider before becoming an hotelier.
There is a minefield of bureaucracy to consider ranging from licensing rules to food
hygiene and fire regulations. If something goes wrong in your hotel ignorance is no
excuse in the eyes of the law.
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The laws that govern the Hotel Industry can be classified into the following broad
categories.
Establishment and Commissioning of Hotels

The first head of laws that govern the hotel industry include the laws regarding
commissioning and construction of hotels, restaurants, guest houses and other
establishments of such kind. These laws also include laws such as Foreign Exchange
Management Act, Industrial Licensing Policies, and land laws, etc. Hotel insurance
policies, especially the customized ones can fulfil the growing needs of the hotel
industry. It can cover all its establishments ranging from spa to guest houses and
apartments, bed and breakfasts, etc. Other insurance policies such as the standard
insurance policy would cover risks and damages arising from accidents, fire, natural
calamity, etc.
The operation, management, and maintenance of Hotel Industry

The second head of laws that govern the working of hotel industry is related to matters
such as management, maintenance and the operational activities of hotels. Such laws
include insurance laws, laws regarding safety and security of workers, food and
hygiene standards, obtaining licenses, Food and Drug Administration Act, Shops and
Establishment Act, etc. For example, Acts such as the Food Adulteration Act would
prohibit the sale of substandard food items thereby protecting the customers from the
potential harm caused by poisonous food and protecting their interest by eliminating
the fraudulent practices. The Food Safety and Standards Act would set up criteria for
manufacture, storage, distribution and sale and trade of food substances so that they
remain fit for human consumption for a considerable period. The Legal Metrology
Act would regulate the use of standards of weights and measures. The Copyright Act
would protect the rights relating to expression in the form of literature, drama, music,
art or architectural works. In fact, hotels are required to take such copyright licenses
before they organize any event such as plays or musical shows, etc.
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Taxation, Employment, and Contracts in Hotel Industry

The third set of laws that govern the working of a hotel are related to the contracts
that it enters into with other enterprises or employment contracts, for example, the
Apprentice Act, Employees State Insurance Act, etc. These laws also include the manner
in which such entities are taxed. Taxes may include income tax, service tax, expenditure
tax, excise duty, luxury tax, and entertainment tax, value added tax, etc. Legislations
such as the Shops and Establishment Act or the Employees State Insurance Act would
aim at regulating the relationship between employers and employees in the hotel. The
former would lay certain statutory obligations on the employers in matters related to
wages, work hours, holidays, paid leaves, provision for payment for overtime work,
etc. The latter is a social security scheme that would mandate the employers to protect
the interest of the workers in times of contingencies such as sickness, maternity leaves,
physical impairment or injuries occurring from the workplace, subsequent medical
care. The Provident Fund Act mandates the creation of provident fund schemes for
the employees. The Apprentices Act shall govern the working of apprentices in the
Hotel Industry.
Other laws governing Hotel Industry

Other laws that may govern the working of hotels may include local law norms or
other local land norms or guidelines issued by the tourism industry such as approval
of hotels at project stage and classification & reclassification of hotels, guidelines for
classification of heritage hotels, Time Share Resorts (TSR), Stand Alone Restaurants,
guidelines for apartment hotels, guidelines for approval of guest houses, Hospitality
Development and Promotion Board, implementing a transparent system for the effective
monitoring of hotel projects, ensuring timely accrual of approvals / clearances /
NOCs by the multiple agencies and facilitating the implementation of hotel projects,
expeditious clearances, etc. will enable completion of hotel projects in time leading to
enhancement of room availability for the tourists.
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1.1.5 Importance of Knowledge of Laws in the Hospitality Industry

A working knowledge of laws governing the hospitality industry is not just a nice
bonus piece of knowledge. Employees, managers and other staff members have to
know enough about the law to avoid breaking it because failing to follow state and
federal laws can result in fines, lawsuits and negative publicity.
The hospitality industry encompasses arts, entertainment, recreation, accommodation

and food services. Industry laws relate to guests and employees, and include legislation
on employee health and safety, labor laws, environmental protection, hygiene, alcohol
licensing regulations, negligence, privacy and contracts. It is important for industry
entrepreneurs and managers to know these laws to promote employee welfare, ensure
adequate service to guests, manage business exposure to risk, and maintain complete
compliance with state and federal laws.
Employee Welfare
Service providers ought to be well-versed with all labor laws, given the unique
employment attributes in the hospitality industry. Unique challenges exist due to the
nature of the work and the variety of employees that exist in the industry. There are
permanent and seasonal workers regulated differently under the law. The hospitality
industry also takes on underage workers who work part-time and have specific
protections under the law. Considering that the hospitality industry tends to operate
24 hours a day, throughout the year, entrepreneurs and managers have to guard
against violation of wage and overtime laws, which guard against overworking and
underpaying employees. It is also important to know about the occupational health
and safety laws that protect employees at work.
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Client Service
Operators in the industry are expected to ensure clients’ welfare
and are legally liable when they fail to meet it adequately. Client
services range from food preparation and service; ensuring
general hygienic conditions, and offering adequate security to
prevent criminal activity, which includes assuring the safety
of guests and protecting their privacy and confidentiality.
Operators need to know their legal duties and refrain from
placing clients at risk of injury, illness, embarrassment or loss Keyword
due to ignorance or negligence.
Embarrassment is an
emotional state that
is associated with
Risk Exposure
moderate to high
Because offering hospitality spans a wide array of services, levels of discomfort,
and which is usually
it is important to know all the laws that apply to manage experienced when
the industry’s exposure to risk. Hospitality industry service someone has a
provider’s face the risk of lawsuits based on breach of contract socially unacceptable
arising out of relationships with suppliers and guests, tortious or frowned-upon
claims such as when a guest gets injured due to negligence, act or condition that
was witnessed by or
and bankruptcy when the business is not making enough to revealed to others.
pay the bills. The industry is also vulnerable to risks arising
out of gambling and liquor licensing laws that regulate when
and where alcohol can be served and the legal drinking age,
as businesses can be held liable even when it is their guests
who breach the law. Therefore, industry entrepreneurs and
managers need awareness of laws to avoid exposure to risk
that can lead to disruption or even closure of the business.
Legal Compliance
State and federal laws prescribe standards for every industry,
and in the hospitality realm, there are a number of relevant
laws that service providers must follow. Laws on guest-tenant
relationships, maintenance of public health through the creation
of smoke-free zones and food hygiene standards apply directly
to the industry. Legislation on consumer safeguards, such as
protection from misrepresentation and false advertising, as
well as disability discrimination due to lack of access, also
affect the industry. Service providers require comprehensive
knowledge of all applicable laws to effectively manage all the
legal issues that arise in the course of operating their business.
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1.2 HOTEL BUSINESS: LICENSING AND

REGISTRATION REQUIREMENTS
Planning to start a restaurant business? Well, go ahead!
However, you must know that starting a restaurant business is
no cakewalk. Not only would need to go through brainstorming
sessions on choosing the right location, hiring the right
employees, marketing the restaurant just right, but you must
also delegate a considerable amount of time in getting the
right licenses for your restaurant. You definitely do not wish
Remember to entangle yourself into a legal trap after you have planned or
rather established your restaurant with your sweat and blood.
A hospitality business
Hence, make sure that you have all your legal papers in place,
is required to meet
strict standards of and save yourself from all the unnecessary legal hindrances.
health, safety and
hygiene. Examine ways
in which public health
legislation exercises
control over new and
existing hotels.
A number of licenses and registrations are required for

starting and operating a hotel business. Many of the licenses
and registrations must be obtained prior to starting the hotel
and renewed while the hotel is operational. Further, most
licenses require the hotel to meet certain rules or criteria’s
for maintaining validity. Therefore, it is important for
Entrepreneurs in the hotel industry to be aware of these licenses
and registrations – to operate a hotel business smoothly.
1.2.1 Licenses required to start a Restaurant

A lot of the license requirements depend on the type of hotel,
star rating, amenities and the location of the hotel. Further,
the rules and regulations to obtain license for hotel industry
differs according to the states.
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Here we have listed the most important restaurant licenses required to open a
restaurant, obtaining which will ensure that your restaurant operates legitimately.
■■ Building Permit for the Hotel Business: The National Building Code was prepared
by the Bureau of Indian Standards to unify the building regulations throughout
the country. The National Building Code is adopted by all Government
Departments, Municipal Bodies and other Construction Agencies. As per the
National Building Code, no person shall carry out any development, erect,
re-erect or make alterations or demolish any building or cause the same to
be done without first obtaining a separate permit for each such development/
building from the Authority.
■■ Fire Safety Permit for The Hotel Business: A fire safety certificate or permit is
required for the Fire Department is a must for operating a hotel business. Fire
safety certificate is usually provided if the building has incorporated proper
fire prevention and fire safety measures as required under the relevant fire
safety rules and regulations.
■■ Police License for Hotel: Hotels are public places that are monitored closely by
the Police Department. Therefore, all hotels must maintain proper log of all
Guests who have stayed at the hotel, follow relevant regulations and maintain
a valid permit from the Police Department. Police license for hotels usually
falls under the power of licensing of Places of Public Entertainment held by
Commissioner or Additional Commissioner of Police.
■■ Health Trade License for Hotel Business: A health trade license is usually required
from the local Health Department for restaurants and hotels. Health trade
licenses are usually issued by the Municipal Corporation. The health trade
license is required for businesses that have a direct impact on public health.
Compliance with the relevant hygiene and safety norms, which are important
for public health is a prerequisite for issuance of a health trade license.
■■ Hotel Business Registration: It is recommended that a hotel be setup under an
artificial legal entity like company or LLP. By operating a company under an
artificial legal entity, the liability of the promoters with respect to the business
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can be limited and the business as a going concern

would be easily transferable to another person.
■■ ESI Registration in Hotel Business: ESI is an autonomous
corporation under Ministry of Labor and Employment.
Employee’s State Insurance (ESI) registration is
mandatory for Businesses that employ 10 or more
employees. To maintain compliance with the ESI
Regulations, the employer must contribute 4.75% of
the wages for all employees earning $15,000 or less
toward ESI employer dues. The employee is required
to contribute 1.75% of his/her wages as ESI dues.
■■ PF Registration in Hotel Business: An Employee
Keyword
Provident Fund (PF) Registration is required for any
Provident fund is establishment that employs more than 20 persons.
another name for The PF Board administers a contributory provident
pension fund. Its fund, pension scheme and an insurance scheme for
purpose is to provide the workforce engaged in the organized sector.
employees with lump
sum payments at the ■■ Bar License in Hotel Business: If the hotel operates a bar
time of exit from their or serves alcohol in the restaurants, a Bar license will
place of employment. be required from the relevant authorities. Bar license
is usually provided by departments operating under
the State Government. Hence, the requirement for bar
license varies from state to state.
■■ FSSAI Food Business License: A FSSAI food business
license under the Food Safety and Standard Act is
required for operating a restaurant. The FSSAI food
business license is usually provided for one year and
is renewal at the end of each year. FSSAI license for
restaurants are managed by the local FSSAI office.
FSSAI license for restaurants does not fall under the
purview of the Central Government.
■■ Service Tax Registration: Service tax is applicable on the
accommodation services provided by the hotel and
food services provided by a restaurant in the hotel.
Therefore, hotels must obtain and maintain service tax
registration. Hotels having room Tariff of $1000/- and
above have to pay the service tax on 60% of room tariff
at 14% (the net rate of Service Tax comes to 8.4%).
For restaurants, the service tax is applicable on 40%
of the Food and Beverages bill 14% (the net rate of
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service tax comes to 5.6%). Further, the use of banquet hall where substantial
food is served attracts service tax 14% with abatement of 30 % (the net rate
of service tax comes to 9.8%).
■■ VAT Registration: Value Added Tax (VAT) is applicable on the food served
by a restaurant in a hotel. Therefore, hotels must obtain VAT registration to
comply with VAT regulations. Since, VAT fall under the purview of the State
Governments, VAT regulations and procedure for registration changes from
state to state. It is best to therefore consult with the local Sales Tax Department.
1.2.2 Hotel Tariff and Basis of Charging Rooms

Tariff is the rate or charges offered to the guest by the hotel for the use of different
facilities and services, during their stay. Commonly, tariff is a charge of room rates
and other facilities. Tariff is a charge of room rates and other facilities. Tariff or room
charges may include meal or breakfast depending upon the plan as per the guest
choices. Prices of hotel services are incorporated in a card known as the ‘tariff card’.
Tariff card is the card containing the rates or price charged by a hotel for
accommodation. Tariff card may include meals depending upon the types of plan the
hotel offers to the guests. Prices of meals and other hotel services are also printed in
the hotel tariff card.
Basis of Charging Room Rates

The sale of rooms contributes more than 50% of total revenue generated in the hotel.
Rooms are charged on the following basis:
■■ The 24 hours basis: In twenty-four hours basis the room is charged for the
stay of 24 hours. If a guest arrives at 9 am today, the room charges will cover
until 9 an tomorrow. No concession will be given if the guest leaves few hours
earlier. His/her hotel day begins at 9 am every subsequent day. There is not
any fixed time for check-in and check-out.
■■ The 12:00 noon: A particular time of a day is fixed, mostly 12:00 noon as a
check-in and check-out time for all the guests, hotel day begins at this time.
This method is advantageous that a room can be sold twice in a same day. For
example, Mr. A arrives at 12:00 noon and checks out early. After few hours, Mr.
Y arrives and is provided the same room, he is also charged for whole day.
■■ The Nightly basis: Here, the charge is fixed, according to the nights spent in
the hotel. If a guest stays from 10 am until 6 am the next day, the guest in
charged for one night or a day.
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Types of Rate Codes used in hotels

Hotels always have more than one rate code category for each room type. Room rates
categories generally correspond to types of rooms available to sell in the hotel (E.g.:
Suite, Deluxe, Premiere, Studio, Pent house etc.). Room Rates and rate codes may
also vary according to the available room features such as room size, location, view,
furnishing, décors etc. and also with competitors pricing.
Standard Room Rates and Rate codes used in the hospitality industry:
■■ Rack Rate: Is the Standard rate or Published tariff defined by the hotel
management for a particular room category/type. This is generally printed
on the tariff sheet of the hotel and these details are also submitted to the
local government authorities for hotel licensing and in some countries for
Government tax compliance. In other words these rates are always without
any sorts of discounts.
■■ Corporate or Commercial Rate: These are rates offered to companies that provide
frequent business for the hotel or its chain. This rate may vary according to
the volume of business guaranteed by the companies. E.g.: NEG1, COR1 etc.
■■ ADHOC Rate Code: These are normally non-standard rates which is offered
as special one-time rates for first time corporate›s.
■■ Group Rate: These are rates which is offered to groups, meetings and conventions
using the hotel for their functions.
■■ Promotional Rate Codes: These rates are generally offered during low occupancy
periods to any guest to promote occupancy. Early Bird Rates, Stay for 3 and
pay for 1 etc. are some examples. These rates may also include certain add-
ons to attract the customers like free Wi-Fi for 24 Hrs. free buffet dinner etc.
■■ Incentive Rate Code: The Rate offered to individuals who belong to an association
or holders of special membership cards or Credit cards. E.g.: Amex / VISA /
Master cardholders get 5% discount on Rack Rate, Lufthansa Frequent Flyer
members get 25 % discount etc. For hotels, these rates always give potential
referral business.
■■ Early bird Rate: This type of rates are only open X days before arrival. E.g.:
Open only when 7 Days before arrival, 14 Days before Arrival, 30 Days Before
arrival Etc.
■■ Family Rate: A rate reserved for families with children. Usually, these rates
include Extra Bed charges and may also include some free add-on activities
for children.
■■ Package Rate: Rates that includes a guest room in combination with other
available events or activities. (E.g.: Best of London package which includes room
rental, all meals, site seeing, airport transfers etc.) Package rate can be also a
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simple room and meal package like American Plan

(AP), Modified American Plan (MAP), and Continental
Plan (CP) etc.
■■ Best Available rates (BAR): These rate codes are the
lowest discounted rate available for a day which can
be offered to the guest by the Reservation or Front
desk staff. BAR can be off different types:
-- ‘Dynamic BAR’ - Has different tiers and each
tiers will be opened and closed according to
the occupancy of the hotel. (The new age hotel
management software’s does this automatically
for the Revenue Mangers.)
Sample Dynamic BAR Rate
BAR Level Open / Close when

Occupancy Between
BAR -01 0% TO 25 % Keyword
BAR -02 26 % TO 35 %
Revenue is the
BAR - 03 36% TO 50% income that a business
BAR - 04 51% TO 75% has from its normal
BAR - 05 76% TO 100% business activities,
usually from the sale
-- ‘Daily BAR’ - Has a pre-defined daily room rate of goods and services
regardless of room categories ( Run of the house) to customers.
and occupancy, these rates are set according
to the day of the week, as per the demand of
hotel rooms in the city, special day›s or seasons,
as per the room demand forecast done by the
hotel revenue manager.
Sample Daily BAR Rate
DATE DAY RATE ($)

19/10/2016 WED 200.00
20/10/2016 THU 200.00
21/10/2016 FRI 250.00
22/10/2016 SAT 250.00
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23/10/2016 SUN 250.00

24/10/2016 MON 200.00
25/10/2016 TUE 200.00
■■ Complimentary Rate: A Room rate with zero room charge which is offered to
special guests, industry leaders, Government officials etc.
■■ House use Rate: A Room rate with zero room charge which is used for rooms
stays for hotel purpose. E.g.: Manager or duty room, In-house General /
Resident manager room etc.
■■ Zero Rate Code: This kind of rates are used as system requirements for PMS›s
as these would be tagged to Dummy rooms, Paymaster rooms and Group
Master rooms.
■■ Virtual Rate / Follow Rates: A Special Type of rate codes whose values are
derived from another rate code or rate group. E.g.: BAR1 which is 10% off
on the Rack Rate.
1.2.3 Hospitality Labor Laws

The labor laws governing the hospitality industry -- hotels and motels, restaurants, air
and land travel, cruise ships and tourism -- may also apply to many other business types
in the United States. The field of hospitality, collectively employing many thousands
of workers, must be especially vigilant in adherence to several applicable labor laws,
all of which the U.S. Department of Labor rigorously enforces.
Fair Labor Standards Act (FLSA)

Under this act, administered by the Employment Administration’s Wage and Hour
Division within the Department of Labor, small hospitality enterprises with annual
gross sales of over $500,000 are required to comply with the current federal minimum
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wage (superseded by state minimum wage laws if that hourly

wage is higher), and the payment to non-exempt employees
of appropriate overtime compensation. If your business falls
under the $500,000 test, you may still be subject to this law if
your activities include interstate commerce or an occupation
closely rated to such commerce.
If your company earns $250,000 gross annual sales, and employees are engaged
in the production or shipping of goods between states, penalties may apply for
infractions involving the payment of overtime or the child labor statues covered
under this law.
Equal Employment Opportunity Commission (EEOC)

Hospitality businesses are covered under the EEOC if they
employ 15 or more people, all of whom worked for at least 20
calendar weeks in the current or before year. If your business
meets these guidelines, you might violate the standards in this
law if you discriminate when hiring or firing workers, or when
awarding compensation to different employees performing
the same work. The same holds true for differing genders
executing the same duties. For example, if two of your front
desk clerks were hired to perform the same protocol for
greeting, checking in and checking out guests, the wages for
both employees upon hire must be the same. The EEOC also
deems it illegal to discriminate between employees by favoring
one over another equally qualified worker when considering
promotions, transfers or layoffs, if the decision is based on a
protected status, such as with disability.
Title VII
Hospitality businesses, often employing a vastly diverse
workforce, are especially vulnerable to adherence to Title VII,
a notable section under the EEOC and the Civil Rights Act of
1964. The law states that no one must be discriminated against
on the basis of race, color, religion, sex, national origin, age or
disability. For example, an employee wearing a head scarf with
personal religious significance -- a deviation from the standard
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work uniform -- cannot be discriminated against by being told to remove the scarf,
unless wearing it presents an insurmountable hardship for the business. Rather, the
employer may grant an accommodation, such as a placing the worker in a job where
such head-wear might not cause a negative business impact. Title VII is bolstered by
the Age Discrimination in Employment Act of 1967 (ADEA), forbidding discrimination
against associates over 40 years of age. The Genetic Information Nondiscrimination
Act of 2008 (GINA), also applicable to hospitality businesses, disallows labor decisions
to be made based on genetic information.
The Federal Occupational Safety and Health Act (OSHA)

OSHA’s jurisdiction covers all U.S. private businesses, including those in hospitality, with
the exception of self-employed individuals, workers on a family farm or government
employees, except those covered under state plans. Enforcement occurs when employees
complain of harmful or toxic working conditions, such as those created by fumes in
poorly ventilated areas like those potentially found in restaurant or hotel kitchens.
OSHA officials may unexpectedly inspect hospitality properties to ensure compliance
with safety standards. Your business can maintain a safe environment by developing
an in-depth written safety program, involving employees adhering to safety standards,
and creating ongoing opportunities for continual safety training. OSHA also provides
protection for “whistle blowers,” employees or others who may be compelled to report
hazardous or unsafe work environments.
1.2.4 Service Tax for Hotel Industry

Hotels, inns, commercial guest houses, serviced apartments and other businesses
providing temporary stay facilities, play a major role in the travel and tourism industry.
The accommodation services provided by such businesses come under the service tax
regulations. In this section, we provide a detailed assessment of service tax for hotel
industry.
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Service tax is payable to services provided by the provider. It is similar to excise

duty where an amount is payable on goods that are manufactured. It is a type of
indirect tax that is collected by the Government after consuming the taxable services
provided by travel agents, restaurants, cable providers, cab services etc.
Service Tax vs. Service Charge

Service tax is a tax levied by the Central Government and all services provided by
a service provider except those notified in the negative list are liable for payment
of service tax. On the other hand, service charge is a charge levied by the hotel for
providing a service. While service tax collected is remitted with the Government, service
charge collected is retained by the hotel itself. Hence, the levy of service charge is at
the discretion of the hotel management, while the levy of service tax is a mandatory
requirement.
Difference between Service Tax and Service Charge

A service tax is a tax that is levied by the government for whom certain services are
provided. A service charge is an unofficial charge levied by restaurants for services
provided. When one goes to pay the bill in a restaurant after dining there, they might
notice certain charges on the bill in addition to the cost of the dish. One of these
additional costs may be service tax; another may be a service charge. Many people
assume them to be the same, or worse do not even check, which is how many restaurants
tend to dupe their customers. However, in reality, a service tax and a service charge
are two very different things.
A service tax is a tax that is levied by the government for whom certain services
are provided. Any service, such as a phone bill payment or hiring a room in a hotel
or eating in a restaurant is taxable by the government under service tax. However,
the tax is usually not applicable on the whole bill, but rather only on certain services,
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which make up only part of the bill. Technically, the Service

Tax is applied on the business that provide the services, and
not on the customers, but a clause allows the businesses to
collect the service tax from its customers, which is what they
often do.
The service tax is currently 14%, which is only applicable on 40% of the bill. So,
if the bill is $ 1000, then 40% of the bill would be $ 400, and the 14% service
tax will be calculated on this $ 400. Hence, the service tax would actually be
calculated as 5.6% on the whole bill, which is 14% on 40%.
In comparison, a service charge is a charge that is levied

for the services provided. However, the service charge is not
levied by the government and is not paid to the government
by the business. The service charge is purely a charge by the
restaurant or business on the customer, which directly goes
into the business’s profit.
Restaurants often charge a service charge for services
rendered such as serving the food at the table, cleaning the
table, etc. Furthermore, as there is no law regulating this,
businesses charge anywhere between 5% to 20% as a service
charge, which is applied on the whole bill. It is generally
accepted that if a restaurant charges a customer a service charge,
then the customers do not have to pay a tip. However, some
restaurants expect their customers to pay both, even though
they both are payment for service. Hence, an unsuspecting
customer may end up a service tax, a service charge, and a
tip, all in addition to the bill itself.
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Table 1: Comparison between service tax and service charge
Service Tax Service Charge

Description A government tax levied for services provided An unofficial charge levied for
services provided
Levied by Levied by the Government Levied by the restaurant or
business
Paid to Paid to the Government Not paid to the Government
Applicable by Applicable for restaurants, eating-joints, or Can be levied by any restaurant,
messes that have air-conditioning. Restaurants eating-joints, messes, or businesses.
that do not have air-conditioning are exempt.
Applicable on Applicable on only certain parts of the bill, not Can be and usually is applicable on
the whole bill. the whole bill.
Applicability of VAT for Hotels

VAT or Value Added Tax is a tax levied on sale of goods and products. The sale of
food products by a restaurant in a hotel attracts VAT under the relevant state laws.
However, the accommodation services provided by a hotel do not attract VAT.
Applicability of Service Tax for Hotels

By way of a service tax notification, the Central Government has exempted renting of
rooms with a declared tariff of less than $1000 from the applicability of service tax.
Declared tariff is the charges for all amenities provided in the room like furniture,
air-conditioner, etc., without including any discount offered on the published charges.
In addition to the exemption available for rooms with a declared tariff of less than
$1000, service tax is also not applicable for those hotels providing taxable services of
less than $10 lakhs under the exemption available for small service providers.
Service Tax Rate for Hotels

Service tax is applicable only on 60% of value of rent of room, inn, guest house, clubs
or other commercial places meant for lodging purposes. However, when service tax is
paid only on 60% of the total value, no CENVAT credit or Input Credit can be claimed
by the service provider.
Example: Hotel Service Tax

In case a hotel has a declared tariff of $1500 per room per night, provides a discount
of $600 and charges $900 to the customer, then the service tax applicable would be
as follows:
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■■ Service Tax Exemption: Though the charge levied

to the customer is $900, service tax would still be
applicable as the declared tariff is $1500, which is
above the service tax exemption threshold.
■■ Service Tax Applicable: Service tax would be charged
Keyword on only the actual amount paid by the customer. Hence,
service tax would be calculated on $900, which is the
Lodging is a type amount paid by the customer.
of residential
accommodation. ■■ Service Tax Rate: Service tax would be levied only on
People who travel 60% of the amount paid by the customer.
and stay away from
home for more than
a day need lodging
1.2.5 Expenditure Tax in Hotels or Restaurants
for sleep, rest, food,
safety, shelter from Expenditure tax is computed according to The Expenditure
cold temperatures Tax Act that governs all taxation-related processes associated
or rain, storage of with the chargeable expenditure that an individual incurs in
luggage and access to certain hotels or restaurants.
common household
functions.
This act defines “chargeable expenditures” provided that

the charges are incurred in a hotel where the room rent is
in excess of $3,000 (per day), or the charges are incurred in
a restaurant. An expenditure tax of 15% is collected from
restaurants when it renders services deemed taxable and 10%
of the charges incurred on payments made at a hotel.
As such a “Chargeable Expenditure” is defined under the
Expenditure Tax Act, 1961 as an expenditure that refers to and
includes any payment made to (or expenditure incurred in) the
hotel which is connected to the provision of Accommodation
that is either residential or otherwise, or accommodation in a
hotel on hire or lease. A “Chargeable expenditure” does not
include the following:
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■■ Payments made (expenditures incurred) in foreign exchange.

■■ Payments made (expenditures incurred) by anyone within the purview of the
Vienna Convention on Diplomatic Relations, 1961 or the Vienna Convention
on Consular Relations, 1963.
■■ Payments made (expenditures incurred) in any shop / office which is not owned
or managed by the person who carries on the business of a hotel.
Other respective charges such as those for food, drinks, and other services cannot
be used to cover up the actual charge of the room rental, etc. If there are discrepancies
in this regard, the Assessing Officer will decide on what amounts need to be charged
under the various headings in the itemized breakup of the bill. It should be noted
that in the case of room rent charges in hotels, the Assessing Officer of the Income
Tax Department has the power and freedom to deem whether the breakup of charges
has been mentioned in the correct manner.
The expenditure tax definition is not a simple one; the concept of tax expenditure is
that, government is giving back money to achieve certain social goals, like strengthening
housing sector or industrial sector. Tax Expenditure are not direct spending by
government. If it were not for tax exemptions, the amount deducted would have
belong to government itself. So essentially, the Government is not collecting money to
be re-distributed later, but providing tax exemptions for good governance.
Tax expenditures are of different types – there are those that arise from tax provisions
that reduce the present value of taxable income through deferral allowances, or special
exclusions, exemptions, or deductions from gross income. These can be incentives
from the government to promote investment in certain sectors like housing or rural
development, etc., others affect a household’s after-tax income more directly through
tax credits or preferential rates for specific activities.
Examples of Expenses for a Restaurant Business

Restaurants are businesses with high overhead costs and a high potential for waste. The
two largest expense categories are labor and food and beverage. Food and beverage
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expenses are categorized on financial statements as the cost of sales. All other expenses
are listed as operating expenses, though they can be further divided into additional
categories.
Labor Costs
Labor is one of the two major expenses of any restaurant. Examples of labor costs
include salaries, wages, benefits, unemployment taxes and service commissions. It can
also include the cost of providing employees with uniforms. For most restaurants, labor
costs are considered variable as they rely on shift workers and part-time employees
that vary according to business volumes. Restaurant managers have to forecast labor
needs carefully so that they neither schedule too few or too many employees.
Cost of Goods Sold

The cost of goods sold represents the second largest expense for restaurants: food and
beverage costs. Other examples of cost of goods sold include the preparation equipment
found in the kitchen, however, these will not be categorized as cost of goods sold on
an income statement as most equipment -- such as stoves, slicers and other preparation
equipment -- are depreciated over time. Most restaurants have goals for keeping their
food cost at a set percentage, such as 33 percent, of their food sales.
Marketing
A restaurant’s marketing expenses include everything it does to get guests to come
and eat food in the restaurant. One of the most important marketing tools is the
menu, as it will dictate many of the other expenses a restaurant has. Other examples
of marketing expenses include table tents, entertainment, music, coupons, advertising
and website expenses.
Occupancy Expenses
Occupancy expenses is a category that splits out into all those expenses related to the
restaurant’s physical building. This can include property taxes, rents, insurance and
utilities. It also includes such things as signage and any parking fees or expenses the
restaurant might incur.
Repairs and Maintenance

The repairs and maintenance category of expenses can be defined as all those expenses
incurred to keep the restaurant operating. These can be divided into the maintenance
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needs of the building itself, the dining area, the kitchen and the food preparation and
cleaning equipment.
Administrative Costs
The administrative costs of a restaurant are very similar to those incurred by other
businesses. They can include office supplies, telephone charges, postage and fees to
professionals such as accountants and lawyers. Restaurants also must pay a number
of licensing fees to local health departments and for beverage licenses, if they serve
alcohol.
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LEGAL ASPECTS IN TOURISM AND

© 2019 3G E-learning LLC

Authored and Edited by 3G E-learning LLC, USA

Diet and Nutrition 3

In nutrition, diet is the sum of food consumed by a person or other organism.

See what you are going to cover and what you

should already know at the start of each chapter.

ABOUT THIS CHAPTER

An introduction is a beginning of section which

states the purpose and goals of the topics which

REMEMBER 2 Food Science and Health: Diet and Disease

This revitalizes a must read information of the

1.1 HUMAN NUTRITION 1.1.2 BMR and REE: Energy Balance

This section contains some important definitions

that are discussed in the chapter. A keyword is

an index entry that identifies a specific record

or document. It also gives the extra information

to the reader and an easy way to remember the

word definition. who is extremely active.

of eating will result in excess fat being stored around the

1.1.3 Body Mass, Body Fat, And Body

This section equip readers the interesting facts and

The book cabinets’ examples to illustrate specific

ideas in each chapter.

ROLE MODEL CASE STUDY

KNOWLEDGE CHECK KNOWLEDGE CHECK REVIEW QUESTIONS

This is given to the students for progress check a.

at the end of each chapter.

This section is to analyze the knowledge and ability b.

References refer those books which discuss the b.

topics given in the chapters in almost same man­ner.

Chapter 1 Introduction to Hotel Law 1

Chapter 2 Overview of Applicable Acts & Laws 41

Chapter 3 Hotel- Guest Relationship 93

Chapter 4 Laws governing Lost and Found Property 129

Chapter 6 Liquor Legislation 221

Organization of the Book

Hospitality is central to the restaurant business, yet it is a LEARNING

A hotel is a commercial establishment offering lodging to travelers and sometimes

or offensive conduct. An innkeeper is under an additional

1.1 AN OVERVIEW OF HOTEL AND

Hotels are establishments that provide paid accommodation

American statutes also govern bailment. A bailment is the delivery of an item or

Risk management is of paramount concern for any hotel,

1. the price list must be provided in the form of a food

1.1.1 Important Laws Applicable To the Hotel

The Important Licenses Required By Hotels under Various

■■ The State specific Shops and Establishments statutes:

1.1.2 Hotels and Motels Law and Legal

Innkeepers and patrons have reciprocal obligations and

Hotel Motel Fire Safety Act

Truth in Menu Law

1.1.3 Leisure and Hospitality Law

to owners, operators, developers, brands, service providers,

■■ Privacy. Advising on compliance with applicable global privacy laws and

1.1.4 Laws Governing Hotel Industry

Establishment and Commissioning of Hotels

The operation, management, and maintenance of Hotel Industry

Taxation, Employment, and Contracts in Hotel Industry

Other laws governing Hotel Industry

1.1.5 Importance of Knowledge of Laws in the Hospitality Industry

The hospitality industry encompasses arts, entertainment, recreation, accommodation

1.2 HOTEL BUSINESS: LICENSING AND

topics given in the chapters in almost same manner.