[Peace-discuss] Hilton hotels

[Ricky Baldwin]

[Here's a story that Bob Wahlfeldt mentioned at the
last AWARE meeting.  It's related, as he mentioned, to
the pickets going on here in town: next one scheduled
Fri March 17 from 12 noon - 1 PM at Tatman's Hilton
hotel site, Kirby between Meil and State St., C. 
-Ricky]

Hilton, Starwood Brace for Showdown With a
Strengthened Union

March 9 (Bloomberg) -- Hilton Hotels Corp. and
Starwood Hotels & Resorts Worldwide Inc. are reaping
record-high profits as demand and room rates soar.
Their labor unions want a cut.

With two-thirds of the industry's labor contracts
expiring this year, Hilton and Starwood are bracing
for their toughest year ever for collective
bargaining, facing a union, Unite Here, that has
doubled in size since the last contract negotiations.

``The hotels are confronting a union that has
significantly more leverage and more imagination than
in the past,'' said Harley Shaiken, a labor relations
professor at the University of California in Berkeley.
``The union is slowly but surely introducing national
bargaining in an industry in which the companies used
to tower over the local unions.''

Unite Here, which represents most of the 90,000
unionized hotel workers in the U.S., fired an opening
shot last month with rallies at Starwood's Sheraton
hotel in downtown Los Angeles and Marriott
International Inc.'s Ritz-Carlton in Boston. The union
accused the hotels of paying lower wages to non-union
workers and using intimidation tactics to keep them
from organizing.

The New York-based union wants ``a model of what our
society desperately needs right now, the restoration
of the middle class,'' said John Wilhelm, 60, who
oversees Unite Here's hospitality workers.

Unite Here's real goal is to swell its ranks by
forcing hotels to recognize a union without first
holding an election, said representatives of Beverly
Hills, California-based Hilton, the nation's
third-largest hotel chain and owner of the Doubletree
brand and New York's Waldorf-Astoria.

Building Membership

``The primary objective is to build membership,'' said
Marc Grossman, a Hilton spokesman. ``It's not fair to
employees.''

Investors say a drawn-out fight may lead to boycotts
or strikes. This ``has become an overhang on the
stocks,'' said James Corl, chief investment officer
for real estate at New York-based Cohen & Steers Inc.,
which manages $20 billion, including shares of Hilton
and White Plains, New York-based Starwood, the
second-biggest chain. ``It will be good when this is
settled.''

In New York and San Francisco, where 90 percent of
hotel workers are in unions, employees get $18 to $19
an hour and have benefits, said Unite Here President
Bruce Raynor. An employee with the same company in a
non-union market such as Atlanta or Dallas gets $7 an
hour and no health care, according to Raynor.

``Poverty-level wages and no benefits aren't
acceptable for an industry that's booming'' Raynor,
56, said in an interview. ``The goal is to raise
standards nationally.''

Average hourly pay at Hilton hotels in Atlanta and
Dallas is between $7 and $11, said Kathy Shepard,
Hilton's vice president of corporate communications.
Wages may be as much as $20 an hour in places like New
York because of the higher cost of living, Shepard
said, adding that labor costs already account for
about 46 percent of a hotel's operating expenses.

`Erasing the Progress'

``Increasing union demands on hotels across the
country will harm the industry, erasing the progress
the tourism industry has made to rebuild after Sept.
11,'' Shepard said.

Company filings show that Hilton, the third-largest
U.S. hotel chain, had net income last year of $460
million, the most in more than two decades. Starwood
earned $422 million, the most since 1998, while
Bethesda, Maryland-based Marriott, the largest U.S.
chain, earned $669 million, the highest since at least
1997.

``One of the most important factors in collective
bargaining is establishing that the employer can
afford the union's demands,'' Bob Bruno, a professor
at the University of Illinois in Chicago, said in an
interview. ``The hotel industry will have a hard time
making a case that it can't.''

Contracts are set to expire at Marriott, Starwood and
Hilton hotels in the biggest U.S. and Canadian cities,
including New York, Los Angeles, Chicago, Toronto,
Boston and Honolulu.

Other Negotiations

Also negotiating new U.S. labor contracts this year
will be Windsor, England-based InterContinental Hotels
Group Plc, the world's largest hotelier; Toronto-based
Fairmont Hotels & Resorts Inc., which manages or
franchises 87 luxury hotels; and Chicago-based Hyatt
Hotels Corp., which controls 215 properties.

All of the hotels said they plan to negotiate in good
faith and referred detailed questions to their main
trade association, the American Hotel and Lodging
Association in Washington.

``We have provided competitive salaries, affordable
wages and good pensions to our employees and remain
committed to do that,'' said Joe McInerney, president
of the hotel association.

Hotels are expected to have another banner year in
2006 with profit reaching a record $25.2 billion as
room rates rise, New York-based consultant
PricewaterhouseCoopers LLP said in a December report.
Still, stock prices have been stymied because of the
looming labor talks, Robert LaFleur, a lodging analyst
with Susquehanna Financial Group in Stamford,
Connecticut, said.

``It's the uncertainty,'' LaFleur said. ``Investors
are pretty tuned into it and want to know what's going
on.''

Size and Strength

The labor talks are the first since the hotel union
merged with the textile workers in 2004, doubling
membership to 450,000. Unite Here also is the only
union that owns a bank, New York-based Amalgamated
Bank.

While Raynor wouldn't say how much money will be spent
on the rallies or organizing campaign, Bruno estimates
that the union's resources have improved to the point
where it would be able to sustain a lengthy strike.
``The hotels are facing a very, very formidable labor
union,'' Bruno said.

In late 2004, a confrontation in San Francisco led to
a strike and a lockout of 4,300 workers at 14 hotels
that lasted more than a month and has left employees
still without a contract.

A union boycott of 13 of those hotels resulted in the
city losing 10 ``significant conventions''
representing $46.6 million in lost revenue, said Mark
Theis, vice president of the San Francisco Convention
& Visitors Bureau. He said the union's new national
campaign may take some of the pressure off his city.

``What was portrayed as just a San Francisco situation
is now going to unfold to be a larger national
challenge,'' Theis said in an interview. ``The union
and hotel industry will now have to arm-wrestle on a
larger scale.''

To contact the reporter on this story:
Kim Chipman in Washington at  kchipman at bloomberg.net.

Last Updated: March 9, 2006 00:08 EST

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