California law relating to pimping:
266h
(a) Except as provided in subdivision (b), any person who, knowing another person is a prostitute, lives or derives support or maintenance in whole or in part from the earnings or proceeds of the person's prostitution, or from money loaned or advanced to or charged against that person by any keeper or manager or inmate of a house or other place where prostitution is practiced or allowed, or who solicits or receives compensation for soliciting for the person, is guilty of pimping, a felony, and shall be punishable by imprisonment in the state prison for three, four, or six years.
I highlighted a relevant part, which seems to cover the "hotel" concept discussed above.
Brothels are nothing new. The reason why they are rare nowadays is because they draw a lot of attention from LE and the penalties for running one can be harsh.
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