For Meetings, Wage Hikes at Hotels Have Upside and Downside

For more than 7,000 front-desk, housekeeping, and culinary employees of 87 hotels in the suburbs between Philadelphia and New York City, south of Albany, N.Y., and on Long Island, N.Y., a new labor agreement will bring raises of 35 percent, or about $7.50 per hour, over the next five years.

The employees, members of the Hotel and Gaming Trades Council, learned of the completed deal on April 10 from Richard Maroko, president of the union. The new agreement is due in large part to the union’s strong presence in nearby New York City, where hospitality wages were notably higher than in the suburbs, said Arash Azarbarzin, CEO of hospitality management company Highgate, in this article from The Wall Street Journal. Now, he noted, “the gap is definitely closing.”

For the front-desk, housekeeping, and culinary employees covered by the agreement, their base hourly pay will rise from $20 to $23.50 per hour to $27 to $31 per hour, with the highest rate going to cooks. The agreement also raises employer contributions to the union’s pension plan by 40 percent over five years, which includes new child-care and housing subsidies.

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The WSJ article notes that only about 10 percent of the national hotel workforce is unionized. However, such union agreements also affect the wages that non-union properties and cities must pay to attract and retain front-line staff.

In fact, non-unionized hotels in or near heavily unionized cities often pay as much or slightly more in hourly wages than unionized properties to attract talent, said David Sherwyn, director of Cornell University’s Center for Innovative Hospitality Labor and Employment Relations, in the article. Before the Covid pandemic, hotel owners in areas with low union representation, such as Miami or Atlanta, would not pay much attention to generous wage and benefit increases in New York, Sherwyn added. But recent successes in Orlando and Las Vegas along with this deal in the northeastern U.S. could prompt hotel operators elsewhere to raise their compensation packages.

For meeting groups, however, there is an upside to these labor agreements, according to Maroko. “Wage and benefit increases like this one absolutely benefit the hotels in terms of worker retention,” he told the WSJ. For meeting planners, consistency in the service experience counts for something as they pay higher prices for guest rooms, food and beverage, and other on-site elements.

Members of the Hotel and Gaming Trades Council celebrate their new labor agreement with hotels. Richard Maroko, president of the union, is at far right.