Fighting Hyatt’s recession contracts

CONTRACTS EXPIRE in 2010 for 45,000 hotel workers in 10 cities and, on July 22, several thousand supporters demonstrated across the U.S. and Canada. This time, Hyatt Hotels were targeted because "Hyatt wants to take more away and lock workers into recession contracts even as the economy rebounds," according to the union, UNITE-HERE.

Simultaneous protests occurred in Chicago, Honolulu, San Francisco, Long Beach, Los Angeles, Boston, Vancouver, Toronto, Miami, Pittsburgh, Indianapolis, Rosemont, San Antonio, Santa Clara and San Diego, with nearly 1,000 activists arrested after engaging in peaceful civil disobedience blocking hotel entrances.

Apparently, there will be more to come of these coordinated national actions involving thousands of members and community allies. They are designed to keep pace with the expiration of contracts in a growing number of cities as it becomes clear hotel owners are stalling negotiations everywhere.

This will allow more hotel union locals to link up with close to 23,000 workers in San Francisco, Chicago and Los Angeles whose contracts lapsed almost one year ago.

The union gave a full explanation for this important escalation of tactics and strategy:

Nationwide, the hotel industry is rebounding faster and stronger than expected, with a hearty rebound projected in 2011 and 2012. [Yet], hotels are still squeezing workers and cutting staff. More than 115,000 jobs in the hotel industry have been cut since the recession began in 2008--46,000 of which have come just in the first quarter of 2010 as the industry has projected recovery. While this marks a trend involving several major hotel companies, Hyatt is the starkest example.

"I MADE my money the old-fashioned way. I was very nice to a wealthy relative right before he died" was the famous statement of Malcolm Forbes after he inherited from his father the equally famous magazine carrying the family name.

But don't expect owners of the Hyatt Hotels, the Chicago-based Pritzker family, where inherited wealth has been passed along over four generations, to be as brutally honest as the late Mr. Forbes. They consistently rank among the top 10 richest American families, but they may very well be justified claiming their money was made in another equally reliable old-fashioned way--by selling high and paying low.

This is certainly the mantra of one of their largest family assets, the Hyatt Hotels Corporation. It boasts a portfolio of 434 properties in 45 countries and, with $1.3 billion, had the most cash on hand of all it competitors at the end of 2009. The Pritzkers have always been good, very good, at making money.

They are definitely practiced at selling high. A minority stake in the Hyatt sold in November 2009 and earned the family just under $1 billion. And, they indeed know how to pay low. Only several months earlier, minimum-wage replacements were hired to replace the entire housekeeping staff at their three Boston hotels.

"I gave my body--everything I have--to that hotel, and Hyatt disposed of us like we were trash," said Lucine Williams, who worked at the Hyatt Regency Boston for 21 years, before being abruptly fired and summarily replaced on August 31, 2009. UNITE-HERE reports that Lucine's hotel made a profit of almost $5 million that year.

In fact, Hyatt management continually cuts staff and increases workloads at all their hotels. As a result, the chain had the highest injury rate for housekeepers last year in an academic study of 50 major hotels published by the American Journal of Industrial Medicine in February 2010.

Actually, since the late 1980s, the hotel industry as a whole has steadily reduced employees. The union reports that in 1988, nearly 71 workers were employed to service 100 occupied guestrooms. Last year, that number was down to 53--a 25 percent reduction.

This is why the industry is poised to make big profits. Occupancy rates are increasing while the workforce is not. "Expense reductions have been so dramatic at both the property and corporate level that even a modest pick-up in...growth should lead to outsized profit gains," according to an analysis by Goldman Sachs.

The union is sending a clear message, stall negotiations and there will be increased national coordination of demonstrations, civil disobedience actions and boycotts. This is in addition to the strike weapon, which San Francisco Local 2, whose contracts expired in August 2009, has used both judiciously and effectively.

That local, with 9,000 members, has a long history of mobilizing both its members and community allies. It has already successfully employed several three-day strikes of targeted hotels, numerous lobby protests by workers on lunch breaks and frequent "all-day, all-night picketing" of eight boycotted venues.

Yet at the same time, the union is conscious that victory is more difficult fighting alone in one city, no matter how bold or militant. Members are also very clear about this from their experiences dealing with these giant investment conglomerates who have continuously rebuffed local efforts to achieve a decent contract.

"These are multi-national corporations, so, standing together with workers in other cities is key to defending our livelihoods," said Local 2 Press Coordinator, Riddhi Mehta.

Thus, the stage is set for more national clashes between the hotels and labor, in the most old-fashioned of ways, with each mobilizing its own precious resources; one measured in cash, the other in people. Only this time, hotel workers have turned their adversaries' chief weapon against them--more management stalling of negotiations locally means more union allies coming onboard nationally.