59.5 F
Los Angeles
Tuesday, May 24, 2022

Hotels Lose Business Over Labor Strife

Uncertainty surrounding the labor dispute involving nine Los Angeles hotels has resulted in cancelled room reservations, banquets, catering assignments and meetings.

The losses come even as officials of the workers’ union, Unite HERE, have held off calling a strike or an official boycott, as their sister local in San Francisco has done.

Nonetheless, Unite HERE officials have had success pressuring 25 to 30 community groups, businesses, charities and other entities to cancel plans at the hotels. Other groups have followed suit without any public acknowledgement, union officials said.

“We’re raising the costs for the employers for not settling,” said Matt O’Malley, senior research analyst at Unite HERE Local 11 and an organizer of the effort. “If revenue streams are cut into and their margins are squeezed, our hope and expectation is that they are going to intervene and try to bring an end to this.”

There’s no way to know how much the hotels have lost nor does either side know how many organizations decided to switch venues before making a reservation at one of the nine hotels involved in the dispute.

But the Hyatt Regency Los Angeles lost $40,000 when a “Democratic-leaning” organization cancelled an all-day meeting and luncheon involving 600 people in August, according to Koleen Kareti, the hotel’s general manager and president of the Los Angeles Hotel Employer’s Council, which represents the nine hotels in the negotiations.

And the Asia-Pacific American Legal Center shifted its annual fundraising dinner, scheduled for Oct. 28, to the Empress Pavilion restaurant in Chinatown. The dinner had been organized at the Westin Bonaventure Hotel & Suites or Millennium Biltmore Hotel in downtown L.A. for the last 15 years.

The group’s concern over picket lines cost the Bonaventure as much as $60,000.

“We certainly hope to go back to the Bonaventure as soon the labor dispute is settled,” said Stewart Kwoh, executive director of the non-profit center. “A number of our supporters would not cross the picket lines and that would essentially ruin our dinner.”

Unite HERE expects to complete a petition drive it began Oct. 21 to gather signatures from at least two-thirds of its 2,800 members to call an official boycott of the hotels. If the two-thirds threshold were reached, the boycott would gain the sanction of the AFL-CIO, bringing the local dispute national, according to Hilda Delgado, spokeswoman for the L.A. County Federation of Labor, which already has sanctioned a strike.

A banquet at one of the affected hotels could generate from $4,000 to $10,000 in revenue for each 100 people in attendance, said Bruce Baltin, senior vice president of PKF Consulting, an L.A.-based hospitality industry consulting firm.

A conference or convention taking 100 rooms for three nights, even at a group discount rate, could generate $36,000 to $90,000, depending on the hotel, size of the room and the time of year, he said.

“A group would also buy meals, gift shop (items) and rent audio-visual equipment for the corporate meetings,” Baltin said. “To the extent that groups are dissuaded from coming to the hotels, it could cost the hotels quite a bit of money. But unfortunately, it also costs the union workers hours.”

Hotels generally add an 18 percent service charge to bills for large banquets. As a result, the tip for that $50,000 meal attended by 500 people would be $9,000, to be split among 30 to 50 set-up workers, servers, cooks and dishwashers.

The boycott strategy, informal or sanctioned, highlights the vulnerability of the hotel workers, who voted overwhelmingly to authorize a strike on Sept. 13 but have yet to pull the trigger.

Local 11 has been without a contract since April 15. The main stumbling block in talks, last held Sept. 2, is the union’s demand for a two-year contract to line up its expiration date with contracts in nine other cities, and the hotels’ demand that L.A. workers sign a five-year deal.

Kareti said she is unfazed by the lost business. “In fact, it probably reinforces our resolve not allow a contract that expires nationwide in 2006 to occur,” she said. “If they can do this on this (local) scale, what’s to stop them from doing it nationwide in 2006?”

While not all of the workers are pleased with Unite HERE’s tactics, the union maintains that the vast majority of them are willing to take a short-term hit in hopes of lining up their next contract with those in locals in San Francisco and Washington, D.C.

Workers in those cities are also pushing for two-year agreements that would expire with existing contracts in Boston, Chicago and other cities, creating a national bargaining unit to compete with the hotel chains.

Featured Articles

Related Articles