Operating a hospitality business, whether a hotel, resort, boutique property, or multiconcept hospitality group, already demands constant focus on guest experience, operational efficiency, and financial performance. Yet one of the most overlooked, and potentially costly areas for hospitality operators is licensing and permitting compliance. As organizations expand across state lines or manage complex portfolios, building a proactive permitting strategy is essential to mitigate risk, reduce operational friction, and protect the guest experience.

The Permitting Challenge

Hospitality businesses are subject to a wide array of federal, state, county, and municipal permits and licenses, which may include:

• Health and safety permits
• Business operation licenses
• Alcohol beverage control licenses
• Building, fire, and signage permits
• Pool and spa permits
• Elevator and escalator inspections
• Foodservice and catering permits
• Waste management and environmental permits
• Staff certifications such as food handlers, alcohol service, pool operations

Each license and permit carries its own requirements, timelines, renewal deadlines, and oversight agencies. Regulatory environments are highly localized and frequently change—and without a structured approach, operators face fines, delays, unexpected inspections, or even forced shutdowns.

To help you avoid common pitfalls, here are the five key risks our professionals see most often in hospitality, and strategies to address them effectively.

Communication and Transparency Issues

Licensing and permitting often require coordination across multiple departments, including legal, operations, HR, facilities, asset management, and compliance.

The Risk: Without clear communication and visibility, teams can operate in silos, leading to missed deadlines, duplicate work, or inconsistent compliance across properties.

The Strategy:

• Create a centralized compliance dashboard that tracks permit status, ownership, deadlines, and renewal cycles across your portfolio.
• Assign cross-functional liaisons for each property or project to improve transparency and accountability.
• Document escalation protocols so on-site teams know who to contact when delays or issues arise.

Inadequate Documentation

Many hospitality operators still maintain licensing and permitting records in spreadsheets, email chains, or binders at the property level.

The Risk: Outdated or inaccessible documentation can lead to lapsed licenses, missed inspections, penalties, operational downtime, and brand reputation issues.

The Strategy:

• Implement a digital documentation system with cloud access and automated reminders for renewals and filings.
• Maintain a central repository of application materials, approvals, and correspondence for each jurisdiction and property.
• Conduct periodic internal audits to verify that documentation is complete and accurate.

Manual Process Risks

Paper-based tracking and manual data entry remain common in hospitality, especially at older properties or during staffing turnover.

The Risk: Manual processes increase the chance of errors, slow down compliance workflows, and consume valuable staff time.

The Strategy:

• Transition to licensing and permitting management software that integrates with your broader compliance or asset-management systems.
• Automate recurring tasks such as renewals, fee payments, and jurisdiction-specific filings.
• Train property-level staff on digital workflows to improve consistency and reduce onboarding friction.

Regulatory Compliance

Regulatory changes at the city, county, or state level can influence what permits are required and how frequently they must be reviewed or renewed.

The Risk: Without proactive monitoring, hospitality operators may fall out of compliance especially when managing multi-state portfolios.

The Strategy:

• Partner with legal or compliance advisors who specialize in hospitality licensing and permitting across your footprint.
• Subscribe to regulatory bulletins from agencies, lodging associations, and industry groups.
• Establish quarterly or semiannual compliance reviews to align operations with legal developments.

Insufficient or Ineffective Resources

Hospitality businesses, especially those expanding quickly or managing multiple properties often lack dedicated permitting personnel or systems.

The Risk: When resources are stretched thin, even basic filings can stall, leading to delays in openings, renovations, or daily operations.

The Strategy:

• Conduct a resource assessment to identify gaps in staff, technology, or legal support.
• Consider outsourcing licensing and permitting tasks for new properties, new jurisdictions, or major capital projects.
• Provide clear SOPs and training for property-level managers responsible for maintaining compliance.

Looking Ahead

As licensing and permitting complexity grows particularly for multiproperty operators or those entering new markets, the cost of noncompliance can escalate quickly. Investing in scalable systems, trained personnel, and proactive legal oversight strengthens operational resilience, protects your brand, and helps prevent costly disruptions.

By prioritizing documentation, transparency, automation, regulatory monitoring, and resource planning, hospitality operators can stay focused on what matters most: delivering exceptional guest experiences and growing your business. | Phillip Massari, Managing Director, Hospitality Practice, and Joan Taylor, Managing Director, Assurance Services

About

Phillip Massari has practiced public accounting since 2011. He has served restaurant clients since 2013 and brings relevant practical answers to first time audits and reviews. Phillip specializes in the restaurant industry and is involved in post-acquisition and business-combination accounting, providing audit and attest services to public and private clients that are acquisitive or have been acquired by private equity firms.

Joan Taylor has provided internal control services since 2004. She provides risk management and compliance services to clients in many industries, including manufacturing, technology, and retail.

Baker Tilly is a leading assurance, tax and advisory firm that provides a comprehensive range of professional services to businesses and individuals. We protect and enhance our clients’ value through innovation, forward-thinking strategies and a trailblazing mindset. The result is a tailored pathway to success for each of our clients.