The sale of alcohol is an essential and profitable element of an accommodation hotel's service. However, excessive consumption by hotel guests can cause problems for hotel operators, as Jacob Duane explains.
The sale of alcohol in an international hotel accounts for a significant component of hotel revenue.1 Many people who stay in a hotel expect to have access to alcoholic drinks. However, alcohol does cause health problems.2 These health problems must be balanced against guest enjoyment, to ensure that guests are not being harmed, to ensure that the hotel is perceived to be a safe place to stay, and to provide staff with a safe working environment.
Hotel operators, as do all business owners, have a duty of care to protect their guests.3 Failure to observe this duty of care can result in the hotel operator, and possibly other hotel staff, being sued for damages.4 To address this duty of care and to protect guests, especially in the case of alcohol consumption, hotel operators should implement house polices.
The only way to completely eliminate the risks associated with alcohol server liability would be to prohibit the sale of alcohol. Hotel accommodation without access to alcoholic beverages would be unrealistic for most hotel guests. However, by taking a serious approach to alcohol server liability and implementing a house policy that addresses appropriate behaviour in respect of alcohol consumption, hotel operators are able to make their staff and guests aware of what are acceptable drinking practices at the hotel.5
In Queensland, under section 156(1) of the Liquor Act 1992 (Liquor Act), it is an offence to serve alcohol to an intoxicated patron. The resulting fines for a breach of this legal obligation are $25,000 for the hotel operator and $8,000 for the staff member. This is a significant motivation for the development and implementation of house policies to address these issues.
Alcohol has the capacity to destroy the ability of a guest to make reasoned choices and to behave in a civil and rational way.6 If a guest becomes intoxicated in a hotel, hotel staff need to understand what is required to ensure that the guest makes it safely to his or her room, or to where the guest is staying.7 This may involve escorting the guest to his or her room, calling them a taxi or even driving them to the place where they are staying. If staff members are not aware of their responsibilities in respect of unacceptable alcohol consumption through the development and publication of house policies, then the safety of the guest cannot be maintained. Hotel staff will not know how to identify problem situations, let alone be able to deal with those situations in a manner sanctioned by the hotel operator.
Untrained staff and house policies that permit the sale of alcohol to intoxicated guests have been found to exacerbate problems associated with alcohol.8 This is especially so in hotels that market to young males, provide little or poor entertainment, do not encourage the consumption of food, and are overcrowded, uncomfortable and under staffed.9 As a result of unrestrained alcohol consumption, guests can become unruly, which not only upsets other guests but also places staff in a potentially dangerous environment. Hotel operators should identify the appropriate target market that will not expose the hotel to unreasonable levels of risk from inappropriate alcohol consumption.
As part of the implementation of a house policy to deal with problematic alcohol consumption, hotel operators should include responsible service of alcohol (RSA) training for all staff. In Queensland, section 141C of the Liquor Act makes RSA a mandatory legal requirement. RSA training equips hotel staff with the appropriate techniques to recognise intoxication levels in hotel guests and the skills needed to appropriately refuse further service of alcohol to those patrons.10
The balancing between guest enjoyment and hotel risk management can be difficult. It may be appropriate for hotel operators to engage the services of an independent third party to regulate guest behaviour; such as an external security services firm. If the guest who has consumed too much alcohol is a public figure with a high profile, or even a highly valued regular guest, a security firm can alleviate embarrassment between the guest and hotel management.11
Section 148A of the Liquor Act states that a hotel operator has an obligation to maintain a safe environment to ensure that patrons and staff are not harmed and to minimise the harm associated with the consumption of alcohol. All hotel operators need to understand that staff satisfaction is essential to ensure that the hotel runs smoothly and profitability. It has been found that staff turnover is higher in premises that do not promote RSA.12 By failing to develop and implement house policies, hotel operators may experience high turnover and other human resources issues, which may put pressure on profit levels due to the ongoing expense of advertising for, locating and training new staff.
But it is not only staffing costs that may be an issue if appropriate house policies are not implemented to regulate excessive consumption of alcohol. Failing to have appropriate systems in place can result in an increase in insurance premiums.13 Increases in insurance premiums will place greater pressure on the bottom line and potentially identify those hotels without appropriate house policies as high insurance risks, leaving those hotels unable to secure insurance cover at reasonable premium levels.
The perception that the premises are safe can be enhanced by publishing and promoting house policies. This has the potential to expand the hotel's client base and therefore profitability. Staff morale and retention rates will also be improved as the publication of house policies will reinforce hotel management's commitment to safety.14
By creating a safe environment that discourages excessive consumption of alcohol, hotel operators will not only be ensuring that all of their guests can enjoy their stay in a safe hotel, but also be protecting a vital asset: staff.
1 'Sharia – compliant hotels rise in
the Gulf', 2007, AME Info, viewed 5 May 2009,
2 Australian Institute of Health and Welfare (2001) 'National Drug Strategy Household Surve': detailed findings drug statistics', series No 11
3 Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479
4 Scott v C.A.L No 14 Pty Ltd (No 2)  TASC 2 (19 January 2009)
5 Liquor Licensing Division, (2003), 'No more risky business', Department of Tourism, Racing and Fair Trading
6 Chamberlain, E (2004) 'Duty – Free Alcohol Service', Lawbook Co, 12 Tort L Rev 121, P124
7 Hoyne, M (1998) 'One for the road: liability of servers of alcohol', Law Institute Journal, April 1998, p49
8 McLean, S (1991) 'The Measurement of harmful outcomes following drinking on licensed premises', Drugs and Alcohol Review 99, p102
9 Solomon, R, et al (1996) 'Alcohol server liability in Canada and Australia: sell, serve and be sued', Tort Law Review, November 1996, p193
10 Scott, L, et al (2007) 'Young adults' experience of responsible service practice in NSW', An update: Alcohol Studies Bulletin, NSW Bureau of Crime Statistics and Research, Number 9, p1
11 Ferrera, N (2005) '7 steps to limit liability', Meetingsnet.com, PRIMEDIA Business Magazine and Media Inc, p77
12 Young, T (2005) 'Introduction of a Code of Practice for responsible service of alcohol', Deacons Legals Updates August 2005
13 Cole v South Tweed Heads Rugby League Football Club Ltd (2004) 78 ALJR 933
14 Liquor Licensing Division, (2003), 'No more risky business', Department of Tourism, Racing and Fair Trading
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.