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socrateaser
socrateaser, Attorney
Category: Business Law
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Experience:  Retired (mostly)
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I am starting an internet-based hospitality exchange network.

Resolved Question:

I am starting an internet-based hospitality exchange network. Members will be charged a low fee for each night they stay at a fellow member's home. I am trying to decide how to structure the payment of that fee. I am considering two different ways: 1)The guests make all reservations through me and make payment of fees through me. (Would I be considered a travel agent and therefore need a license?)or 2)Guests make reservations and pay directly with host. (Would the host be legally considered a B&B if they accepted money for lodging? Could they get around that by calling it a "gratuity" to cover costs of breakfast etc?
Submitted: 4 years ago.
Category: Business Law
Expert:  socrateaser replied 4 years ago.

Idaho law does not license travel agents. However, other states do. This is where you run into a logjam, because in each jurisdiction where you market your services, there are different licensing regulations -- which means that you could be subject to the laws of every U.S. jurisdiction where you do business.

 

This is a big job, though not impossible, because there are companies that do it (Travelocity, Orbitz, etc.).

 

That said, you may want to consider setting up your system to permit the sellers and buyers to use the system, while you simply charge for the use of the venue itself.

 

This is allegedly, the system used by this website, eBay, and other such "venues."

 

Hope this helps.

 

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Customer: replied 4 years ago.
Ok, so I gather from your reply that I could be considered a travel agent by some jurisdictions and therefore should either look into a service that can do that, or choose a different way of operating as you suggested.
Do you know the answer to the other part of my question though, regarding whether a host would be considered a B&B by accepting $ for an overnight stay or if that could be avoided by calling it a gratuity?
Expert:  socrateaser replied 4 years ago.

Hotel and Transient laws also differ by jurisdiction. Moreover, local county and municipal zoning regulations may impact the B&B's operating rights.

 

In general, a B&B needs to obtain a hotel business license to avoid being treated as a residential dwelling unit.

 

Calling the payments gratuitous suggests that something is donated without expecation of any return obligation. This would mean that no one is required to provide room and board. I don't think that a customer would be much interested in paying for the mere possibility of a B&B stay.

socrateaser, Attorney
Category: Business Law
Satisfied Customers: 34180
Experience: Retired (mostly)
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