Hotel Workers In Three Key Cities Authorize Strike

The union representing hotel workers in Washington, D.C., Los Angeles and San Francisco--AFL-CIO affiliate Unite Here--today threatened to strike over the lack of a new contract. In case of a walkout, hotel officials in the three cities said they intend to remain open, but travelers face the likelihood of a decrease in service levels as management personnel seek to cover for striking workers. Each of the country's major multi-brand companies, including Marriott International, Hilton Hotels Corp. and Starwood Hotels & Resorts Worldwide, has significant inventory in these markets.

A critical issue separating the two sides is the length of the proposed contract--and the threat that implies of an even larger industry walkout. "Hotel workers seek a two-year contract term ending in 2006 to put them on more equal footing when negotiations expire with hotel chains in New York, Boston, Chicago and other cities," said John Wilhelm, president of the hotel division of Unite Here.

Hotel companies seek to negotiate a longer contract term, which would avoid the possibility of a national strike. "We believe the probability of a limited strike is high, likely beginning at a handful of individual hotels," said JP Morgan Chase analyst Harry Curtis. "Owners will seek to avoid contracts timed to expire in unison across the country. There is a reasonably high turnover in the lodging industry, and most managers are likely to be able to train and deploy replacement and/or temporary workers relatively quickly."