Move Catches The Eye Of Property Owners

NEW YORK— The agreement between two major unions to join forces has hotel owners as well as operators and managers thinking long and hard about the possible ramifications, both positively and negatively, such a “union” could hold for the industry. Specifically, the 250,000-member Hotel Employees and Restaurant Employees International Union (HERE) and the 180,000-member former Union of Needletrades, Industrial and Textile Employees (UNITE) have reached a consensus to bring the two unions together, in the process establishing a larger organization— to operate under the name UNITE HERE— whose membership rolls would stretch across the country. As a force for organizing non-unionized workers, it is felt by many within as well as outside the lodging sector, the newly spawned entity could be expected to be particularly aggressive in their labor-organizing efforts. As to what that could mean to hoteliers immediately as well as down the road, it seems the verdict is somewhat uncertain at this time— though virtually all contacted by HOTEL BUSINESS® maintained this is a development that clearly commands the industry’s undivided attention. A number of hotel owners and operators— who have had their share of differences with unions over the course of the years— opted to discreetly decline comment on this merger, though many did admit they would be watching the situation with great interest as it develops. On the other hand, several industry executives did weigh in on this particular turn of events and perhaps surprisingly, there was no great outpouring of trepidation over the impact of this merger. Among the first to voice an opinion on the meaning and merits of the announced union merger was FelCor Lodging Trust President/CEO Tom Corcoran, whose 159-property lodging REIT counts just five hotels on the unionized side of the ledger. Coming to grips with the specter of dealing with the new, larger union and what it could hold in the cards for a hotel owner’s bottom line with regards to any particular issue, Corcoran ventured: “Wage and health costs continue to be a big challenge in this difficult operating environment, and to the extent that demands are increased, it may have a negative impact on margins.” As Corcoran pointed out: “It is not the hotels that want to be unionized but the employees. Employees who believe they can make more money— after paying their dues— are usually motivated [to organize].” What’s more, he added: “Most of the unions are in the major cities.” Ultimately, in terms of what hoteliers could do to tilt the numbers of industry employees to their side versus leaning toward unions, Corcoran suggested: “Hotel companies will need to be competitive, with fair wages and benefits.” Another big-time hotel owner— MeriStar Hospitality Chairman/CEO Paul Whetsell— admitted he is “not sure [the merger]will have any substantive impact [on the way his company does business].” However, that is not to say it is a development to be taken lightly. As Whetsell pointed out: “There have been some indications recently that unions may well be considering taking a tougher stand in negotiations with hotels. Now that the industry seems to be on the road to recovery, it could be unions will no longer feel the need to be quite so understanding [of ownership’s tenuous economic position].” Conversely, the MeriStar leader noted the situation may well be fraught with at least as much positive potential as possible peril. As Whetsell sized up the situation: “The big question is whether the [new]union will focus on cooperation and helping employers recruit sorely needed help or merely prove to be difficult to deal with.” On this note, Whetsell said: “This can actually become a golden opportunity for the union[s]to demonstrate they can work with/help hotels, especially when it comes to finding more and better-qualified employees. This could, in essence, present an excellent chance for [them]to be a positive force.” Another hotel-owne