Will Hospitality Workers Strike Back?

When workers at Chicago’s United Center, the largest indoor arena in the country, threatened to walk off the job in March, the ramifications stretched well beyond the Windy City. Chicago was a finalist to win the Democratic National Convention for 2024, but risked losing this plum to close rival Atlanta if it appeared that simmering labor unrest could spill over into the election year.

After a brief walkout, the two sides settled — with union bartenders, waiters and dishwashers getting a pay raise — and the city of Chicago nabbed the prize, which by next August should draw tens of thousands of delegates, and rake in up to $200 million for the local economy.

With travel numbers now hitting prepandemic levels in many parts of the world, the increase in demand has exposed the strains on the hospitality sector left over from 2020-’21, as understaffed hotels and meeting facilities are increasingly at odds with their overworked employees. This conflict has played out repeatedly in major convention cities around the world. Great Britain and France, for example, continue to struggle with labor actions. 

Domestic union action ramps up

Hotel contracts are set to expire in some two dozen cities over the next year and a half, according to union sources, including Los Angeles and Chicago this year. In 2024, contracts will come due in such major meetings destinations as Honolulu; Miami; Orlando; San Diego; and Washington, D.C.

Several U.S. cities already have battled the specter of strikes, with more on the horizon. For instance:

• Last year, San Diego hotel workers represented by Unite Here — the industry’s largest union — were on the verge of walking off the job just as Comic-Con International, which generally attracts more than 100,000 attendees, was about to open. The two sides settled quickly and the union got a long-sought pay increase, setting the stage for similar actions around the country.
• Orlando’s Orange County Conven­tion Center was threatened with a walkout last year, and there’s an ongoing dispute between Walt Disney World and its 32,000 union workers, who have been fighting for a pay increase.
• In Las Vegas, a major labor negotiation is looming that affects nearly 60,000 hospitality workers, as their contract runs out on June 1, according to D. Taylor, the international president of Unite Here, which represents 300,000 hospitality workers across the United States and Canada.

“I expect the negotiations to be difficult,” Taylor says, “but the fact is that Las Vegas has gotten very expensive to live in.” That said, he adds: “I am optimistic that the industry and the unions will come to terms with the fact that workers in our industry have to have aspects of the American dream like everyone else.” 

The effect of the hospitality industry's labor shortage 

Of course, it’s not just the big trade shows and conventions that have a stake in how this plays out. All meeting planners are dealing with the hangover from the Covid years, which dealt a body blow to the hospitality sector when travel ground to a halt. 

One problem is the overall labor shortage in the United States. About 9 million jobs remain unfilled, according to U.S. government data, and it’s not helping that job-seekers increasingly prefer positions that allow them to work remotely, over those positions that only can be performed on-site.

According to the U.S. Department of Labor, there are 2 million unfilled leisure and hospitality jobs, and the number of employees in the sector is down by 500,000 from prepandemic levels. At the same time, unions are growing more powerful: A recent Gallup opinion poll showed a sharp rise in popular support for organized labor across the board.
The labor shortage permeates every aspect of the hotel industry, said Chip Rogers, president and CEO of the American Hotel & Lodging Association, at a recent conference. “The lodging industry has probably been more impacted by a lack of workers than any other industry,” he said.

There are a number of underlying causes, says Deborah Breiter, a professor at the Rosen College of Hospitality Management at Florida Central University. During the pandemic, U.S. hotels lost some $108 billion in business travel revenue, and many workers were laid off. “So many employees were let go, and a number of hotels didn’t stay in touch with them,” she says. But now, she notes, hotels are facing the consequences.

Among the latest statistics: 

• A recent AH&LA survey revealed that 80 percent of members are “somewhat or severely understaffed,” with 22 percent severely so. As for the causes, aside from issues AH&LA is lobbying on, such as immigration reform and the expansion of work visas, some experts blame low wages and stressful working conditions.
• The Department of Homeland Security recently decided to nearly double the number of H-2B visas available, but those in the hotel industry say that won’t go far enough, because three to four times the current number is needed. (The H-2B visa program allows U.S. employers to hire noncitizens temporarily to perform nonagricultural labor or services.) Many union leaders have long decried the hotel industry’s reliance on these workers, saying this doesn’t address the underlying causes of the staffing crisis.
• For meeting planners, the prospect of a labor action disrupting a convention is a serious concern, with good reason. According to a Cornell University study, the number of strikes in the United States rose 50 percent in 2022 over the previous year.
• With no immediate relief to the worker shortage in sight, hotels are turning to alternatives to human interaction, such as self-check-in and replacing room service with grab-and-go food outlets. The most recent AH&LA State of the Hotel Industry report noted, “Hoteliers may increasingly consider robotics as a solution to ongoing staffing shortages.” 

Tense negotiations to come

High-stakes labor talks might grab a lot of attention, but nationwide, only about 10 percent of the hotel workforce currently is unionized, according to the Cornell Center for Innovative Hospitality Labor and Employment Relations. Hotel unions are most likely to be active at business and convention properties in hotels in big cities, such as New York, Chicago, San Francisco, Los Angeles and Honolulu.

In addition to the upcoming Culinary Workers Union contract talks in Las Vegas, unions in other convention destinations have been emboldened by recent victories to seek pay raises and improved benefits, industry experts say. For example, the Hotel and Gaming Trades Council, which has 40,000 members in New York and New Jersey, recently won a $7.50-an-hour pay hike for some 7,000 hotel workers at suburban properties in the region. It was the highest single raise the group had achieved in its 100-year history, according to Rich Maroko, president of the union. (The deal didn’t cover New York City, however, because pay scales there are already higher than the norm.)

What’s more, successful unionization drives at big-name companies, including Amazon and Starbucks, might inspire some hotel employees to do the same at properties that are currently nonunion.

“We’re in for an enormous labor negotiation between employees and the employers,” says Brian Stevens, CEO of ConferenceDirect, a third-party meeting planning firm. With inflation, he adds, “there’s a real reduction in buying power, so if you’re the labor organizer, and your members are coming to you saying, ‘Boss, I can’t buy my groceries that I used to buy on the salary that I’ve got’… the employers are going to have to have a record-breaking negotiation. And that makes the asset managers nervous, because someone bought the hotel with the idea of making money, and making a certain return.”

Workers want more than a pay raise

While employees are focused on getting better pay and benefits, they are also concerned about staffing shortages that are, at times, forcing them to work longer hours or take on two jobs. But here the solution isn’t as straightforward as a hike in hourly pay — the underlying causes, including pandemic-related cutbacks in immigration and fewer temporary visas for seasonal workers, can’t be fixed overnight. Some hotels are stepping up training and recruiting, throwing in new perks, such as increased time off and tuition reimbursement. 

“It really is the workload in the post-Covid world” that is inspiring many of these efforts, says Tony Arguello, a banquet bartender who has worked for more than 10 years at the Fairmont Sonoma Mission Inn, a high-end Sonoma Valley, Calif., resort that’s a popular venue for smaller events. He’s currently involved in organizing his fellow workers to join the local branch of Unite Here. With fewer employees in place since before the pandemic, “the job is getting harder and that creates a lot of stress. People have to carry more plates or work faster to provide the service our guests expect. We shouldn’t have to overtax ourselves in order to offer our best,” he says.

That leads to another critical issue: the inevitable decline in service standards when positions remain unfilled, which creates additional challenges for meeting planners with an event in-house. 

Contracting for service levels

Lawyers say it’s essential to have language in the hotel contract that will hold the venue responsible in such cases. “The threat of a labor action or strike has always been there,” says Jonathan T. Howe, president and founding partner of Chicago’s Howe and Hutton firm, who specializes in hotel and travel law. 

What he is seeing now in agreements are performance clauses that spell out in precise detail what the host organization expects from the meeting venue. “If I sign a contact and it says your hotel will have five restaurants open and fully operating,” Howe says, “you reserve the right to cancel” if those restaurants aren’t functioning. 

In addition, Howe advises planners to insist on a provision that ensures they’ll be informed in advance of a strike vote or other situation at the destination that could imperil their meeting, such as a transit strike. “The message should be ‘We can’t blame you for bad news, but we do blame you for not telling us,’” he adds. 

The debate over housekeeping 

The trend toward asking guests to opt in to daily housekeeping service is another sign of sliding service standards, and again, Howe says, planners should define exactly what they expect for their attendees. “If I have to make my own bed, that is not what I’m paying for at a 5-star hotel or even a 2-star hotel.” 

The move to optional housekeeping is a hot button for unions as well, who suspect that hotel executives — who often cite the move as an energy-saving measure — are just trying to cut staffing. 

“It is unfortunately a cynical way to claim to be environmentally conscious, when in reality it is about reducing labor costs,” says Unite Here’s Taylor. 

Hotel companies justify the moves as good for the bottom line. Hilton CEO Chris Nasseta, for example, says that cutting some services is “all about creating more labor efficiencies, particularly in the areas of housekeeping, food and beverage, and other areas.”

There are signs that labor is fighting back: Unite Here workers recently gathered in Reno to protest legislation that would make daily housekeeping a thing of the past in the state of Nevada. At the urging of union leaders, a number of cities — including Atlanta, Boston, Denver, Honolulu, Houston, Las Vegas, Los Angeles, Miami and New York — have passed resolutions or laws requiring hotels to offer daily housekeeping as the norm. However, union leaders say they’re not always being enforced.

But hotel officials claim that they’re just responding to the shortage of applicants for hotel jobs. The opt-in room-cleaning policy “isn’t taking away jobs, because the fact is we can’t find enough applicants,” says Mark Havard, director of human resources for the Hyatt Regency Orlando. 

Sweetening the deal for hotel staff

In the end, Havard adds, a well-run hotel depends on management-employee relations at the individual property: “I’ve worked in both union and nonunion properties, [and] it’s about creating a work environment where you feel valued, and you feel heard.” 

His property, which had 1,000 employees before the pandemic, now has just 750 on staff, and the hotel has made some changes that can allow it to operate with fewer workers without sacrificing the guest experience, Havard explains. (The hotel is nonunion, and Florida is one of 26 right-to-work states, which allow employees in unionized work-
places to opt out of joining unions or paying union dues and fees.) 

Havard said he is focused on offering wages and benefits that are on a par with, or exceed, those at other high-end lodging brands such as JW Marriott. Among other things, the hotel now offers domestic-partner benefits and paid leave for caregivers. This should help reduce the chronically high turnover in hospitality, he says: “We have a 90-day retention goal, and 75 percent of our hires surpassed that” in the past year.

Still, Havard acknowledges that the pandemic “was the single most challenging time in my career, worse than after 9/11.” In March 2020, as the severity of he crisis was sinking in, the huge Healthcare Information and Management Systems Society convention was about to use the Hyatt, “and suddenly we closed the hotel. In my 30 years in the industry, I had never seen that happen.”

Three years later, the same group returned with 20,000 attendees, eager to meet in Orlando and fill the property. Many other major convention venues are seeing that same uptick in demand — and how well they handle that — will depend, in large part, on the state of their labor relations.