A major Waikiki hotel strike appears to have been averted yesterday with the four Sheraton hotels reaching a tentative agreement on a new, four-year contract with their employees' union.

The agreement, which needs to be ratified, follows a tentative settlement reached last Saturday between the union, UNITE HERE Local 5, and the Hilton Hawaiian Village Beach Resort & Spa, which employs more than 1,500 union members. The Sheraton settlement covers about 2,500 unionized employees at the Sheraton Waikiki Hotel, Sheraton Princess Kaiulani Hotel, Sheraton Moana Surfrider and The Royal Hawaiian Hotel.

The tentative agreements are good news for Hawai'i's No. 1 industry, because a strike could potentially disrupt the success tourism companies have been enjoying. Unionized Hilton and Sheraton workers, who have been without a contract since June 30, voted in August to authorize the union to call a strike if talks broke down. Union members also held rallies and picketed in front of Hilton and Sheraton properties. The last major hotel strike was in 1990 and lasted 22 days.

"It's very important," Hawai'i Tourism Authority president and CEO Rex Johnson said of the tentative agreements. "We're just super happy that they got together and got it settled. ... Hopefully they'll get the other (hotel contracts) finished up, and everyone will be happy."

With the two major labor contracts tentatively resolved, Local 5 will shift its attention to labor negotiations for hundreds of its other members who have been without a contract since June 30, including workers at the Waikiki Beach Marriott Resort & Spa, the Hyatt Regency Waikiki Resort & Spa and the Ilikai. Unionized workers at the Kahala Hotel & Resort and the Ala Moana Hotel have been without a contract since Aug. 31.

Both Local 5 and Starwood Hotels & Resorts, which manages the Sheraton properties, declined to disclose terms of the tentative contract because it hasn't been ratified yet, but said they were pleased. Local 5 plans to hold a ratification vote for the Hilton and Sheraton contracts at the end of next week. The Sheraton hotels and Local 5 began negotiations in May.

Randall DeKraai, a waiter at the Royal Hawaiian Surf Room for 14 years, said he had expected to go on strike. He was happy with the terms of the contract, which he said included an increase in wages, benefits for domestic partners and double-time sick pay for tipped workers.

"I feel like we really came out this year much better than we have before," DeKraai said. "The other thing we're really happy about (is) they're not going to subcontract. That's what we were worried about the most. So now our jobs are pretty much secure. That makes us much happier."

The Sheraton contract includes the "same economic package and other improvements" secured by Hilton workers, according to a joint statement released yesterday by Local 5 and Starwood. Local 5 said it will seek the same improvements at the other Waikiki hotels where contracts have expired.

Local 5 spokesman Cade Watanabe said the union was able to achieve its goals on issues including subcontracting, pension, wages, workloads for housekeepers and healthcare. He also said union officials feel confident that Sheraton workers "will be taken care of" during any redevelopment projects.

The owners of the Sheraton properties are considering some major upgrades, including replacing the diamondhead wing of the Sheraton Moana Surfrider with a new hotel and tearing down part of the Sheraton Princess Kaiulani Hotel to make way for a new time-share tower.

"We are pleased with the outcome of the negotiations," Eric Gill, Local 5 Financial Secretary-Treasurer, said in the joint statement. "Sheraton stepped up to the plate and made the commitment to provide our members with excellent wages and meaningful improvements in health and welfare benefits that will help bring them into Hawai'i's middle class."

The tentative agreement "provides for a secure future for our employees and allows us to remain competitive," said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawai'i and French Polynesia.

The contract negotiations and tentative agreements come during a time when Hawai'i's hotel industry is enjoying record-high revenue and rates. Average hotel room rates reached an all-time high in August despite a drop in occupancy, and hotel revenue statewide is on track to beat last year's record.

Ernest Nishizaki, executive vice president and chief operating officer of hotels owner Kyo-ya Co., Ltd., said the employees have been key to the success of Sheraton Hotels in Waikiki.

"Their dedication and commitment to outstanding service have helped build our hotels' reputation and secured our position in the marketplace," he said. "We are very pleased to be able to share that success with our associates."

UNITE HERE was created by the merger of two unions, the Union of Needletrades, Industrial and Textile Employees and the Hotel Employees and Restaurant Employees.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.