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The Honolulu Advertiser
Posted on: Thursday, March 9, 2006

Union putting pressure on Hilton, Starwood

By Kim Chipman
Bloomberg News Service

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 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 nonunion 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, Calif.-based Hilton, the nation's third-largest hotel chain and owner of the Doubletree brand and New York's Waldorf-Astoria.

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

"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," said Kathy Shepard, Hilton's vice president of corporate communications.

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, Md.-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," said Bob Bruno, a professor at the University of Illinois in Chicago. "The hotel industry will have a hard time making a case that it can't."