The extended hotel labor dispute in San Francisco could send a negative message to holiday visitors and shoppers, discouraging them from spending money in The City during an already rocky economy.
Stalled contract talks between six major hotel chains and the union Unite Here! Local 2 — which represents 9,000 workers at 61 San Francisco hotels — led to a walkout and strike at the Westin St. Francis in Union Square on Wednesday. It is the third picket at a San Francisco hotel in as many weeks, and there are no scheduled talks between the two sides.
The negotiations, which center on health care costs, have soured to the point that unions have been launching weekly unannounced strikes against major hotels in The City’s central shopping district.
Strikes this shopping season could impact city programs designed to draw visitors into The City, including Shop SF, which provides Bay Area residents discounts at city shops and attractions, said Patricia Breslin, executive director for the Hotel Council of San Francisco.
“All of those businesses [in the Union Square area] are affected in a negative way,” said Linda Mjellem, the executive director of The Union Square Association. “We sincerely hope the parties get back to the negotiating table.”
Retail stores are already bracing for another year of low holiday sales. Consumers squeezed by tight credit and rising unemployment are expected to be cautious with their spending, said Mark Zandi, chief economist at Moody’s Economy.com.
The union says it plans to continue striking various hotels until it achieves a desired contract. The contract between the union — which represents workers such as cooks, servers, bellmen and bartenders — and the hotels ended Aug. 14.
The latest offer by the union, which is proposing a one-year deal, has thus far been rejected by management.
“I can’t make a deal that’s cheaper than what we’ve got on the table right now,” Local 2 President Mike Casey said.
Health care is the main sticking point in the talks. Hotel managers say the cost to cover workers has skyrocketed and want employees to pay more, while the union says profit-hungry hotels are using the downward economy to force its low-income workers to pay more for coverage.
“They want us to pay 100 percent,” said Richard Curiale, attorney for Westin St. Francis. “We’re not going to be bullied anymore.”
Continued strikes could have both short-term and long-term impacts for The City.
In the short-term, the labor actions could cause some hotel room cancellations, said Jim Lazarus of the San Francisco Chamber of Commerce.
In the long term, “you have conventions deciding not to come and book those hotels, and that begins to have a broader impact on retailers,” said Ken Jacobs, chair of the UC Berkeley Center for Labor Research and Education.
A decrease in spending would impact city coffers, which receive money from a 14 percent tax on each hotel room as well as the sales tax from spending from visitors to San Francisco. Tourism is one of the largest tax generators for The City, with visitor spending last year contributing $528 million in tax revenue for The City.
The City lost $100 million dollars when hotel workers went on strike and were subsequently locked out in 2004, Local 2 said.
That disruption, however, was a citywide action. This time, the union is initially targeting one hotel at a time, Casey said. That could help buffer the negative affects on tourists, Lazarus said.
“Nobody really knows soon enough to change their plans,” he said.
The Associated Press contributed to this report.
Points of contention
The union representing 9,000 workers at 61 San Francisco hotels is scheduled to continue Day 2 today of a three-day strike at the Westin St. Francis Hotel in Union Square. It is the third strike against a major downtown hotel in as many weeks. These are some points of contention:
- The union has proposed a one-year contract that would result in as little as a 1.5 percent increase in payroll costs — or less than $500,000 for the Westin St. Francis.
- Starwood, which manages the Westin St. Francis, earned $180 million in profits during the first nine months of this year and is trying to use the economy as an excuse to slash health care benefits.
Westin St. Francis
- The hotel has proposed a one-year contract that would increase employee contribution from $10 to $15 per month. The contract would also increase co-pay from $5 to $10.
- Health care costs have skyrocketed. The cost to cover an employee’s family is $1,080, as opposed to $300 a decade ago.
Source: Unite Here! Local 2, hotel companies