Organized Labor is Rattling the Hospitality Sector This Year

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Hotel worker strikes have mostly ended, but unresolved contract negotiations and the rise of organized labor signal continued challenges for the hospitality industry and other real estate sectors. Plus, this week in Propmodo Technology, we’re diving into energy management.

Now, let’s dig in!

Organized Labor Is Rattling the Hospitality Sector This Year

The hotel worker strikes, which saw over 10,000 employees walk off the job over Labor Weekend, have mostly ended. While workers are back on the job at 24 major hotels in eight U.S. cities, none have ratified new contracts, and the labor dispute continues, according to hospitality union Unite Here. 

Further disruptions could occur if contract negotiations with the employer hotels prove unsuccessful. Meanwhile, roughly 700 Hilton San Diego Bayfront workers remain on an open-ended strike. The union said other workers who walked out over Labor Day Weekend in San Diego have returned.

The hotel workers walked off the job at Hilton, Hyatt, and Marriott properties in cities such as Baltimore, Boston, San Francisco, San Jose, and Seattle.

It has been a contentious few months between hotels and their employees and it looks like it will be getting more contentious. Contracts are up for negotiation for more than 40,000 hospitality employees across North America later this year. For many workers, these are the first contracts they’ll negotiate since the start of the pandemic.

Hotel employees claim wages aren’t sufficient to keep up with the cost of living, and pandemic-era layoffs were never reversed, creating more severe workloads. Hotel owners say that they are investing more in their workforce than ever before. According to the American Hotel and Lodging Association, the industry will pay $123 billion in wages this year, a four percent increase from last year.

The hospitality sector has largely bounced back from the pandemic. According to JLL, global hotel revenue per available room remained high throughout the first five months of this year, at 13.2 percent above 2019 levels. However, labor strike disruptions and rising payroll costs are challenging hotel operators.

The rise of organized labor is impacting other real estate sectors, such as offices and multifamily. Late last year, a strike by unionized commercial building service workers was narrowly averted that would have affected about 1,300 New York City commercial buildings.

On a percentage basis, organized labor is not even close to as influential as it was decades ago, but a younger generation has breathed new life into the labor movement. This will be a recurring challenge for property managers moving forward, from hotels to offices to apartment complexes.

Presented by Occuspace

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