Chicago hotels look to avoid labor union strike amid recovery

Hotel managers may argue they don’t need as many workers to run their properties with the COVID-fueled advent of new practices like mobile check-in and more guests opting out of daily room cleaning. Owners — many of whom are still trying to recoup hefty losses from 2020 and 2021 — may also balk at union pay-hike demands as higher costs of supplies and other goods squeeze their profits.

Net cash flow last year through October at the Sheraton Grand Chicago, for example, was running at just more than half of its 2019 level, while the W Chicago in the Loop posted similar numbers during the 12 months ended in September compared with its full-year 2019 figures, according to Bloomberg data. Spokesmen for both hotels did not respond to requests for comment.

Yet labor leaders will likely negotiate from a position of strength because many hotels still can’t find enough workers for housekeeping and other service-related jobs. A September survey of 200 hotels by the American Hotel & Lodging Association found that 87% of respondents were experiencing a staffing shortage. Many workers left the industry for other jobs when the pandemic shuttered hotels and have not returned.

Unite Here Local 1, the union that led the 2018 strike and represented more than 3,700 Chicago hotel workers as of 2021, will likely have more negotiating leverage to push for higher wages, increased benefits and new workplace rules, says Robert Bruno, a labor studies professor at the University of Illinois Urbana-Champaign. But after so much upheaval in the hospitality sector over the past three years, both sides will also have to come to an understanding about the post-pandemic Chicago hotel experience for guests, he says.

“Should there be first-class room service? Should there be a full catering staff? Should rooms be cleaned on a daily basis? And how does this compare with other cities? It’s this larger question about what does the industry actually look like, and what does it mean to be a hotel in a global city like Chicago,” Bruno says. 

Downtown hotel owners and managers that declined to speak on the record about labor negotiations say tighter work rules would be tougher to accept than increasing benefits and boosting pay higher than the $23 hourly starting rate for wage-earning workers at most properties.

Several referenced an ordinance passed last summer in Los Angeles that effectively limits housekeepers to cleaning roughly 10 or 11 average-size hotel rooms per shift as a worrisome precedent. Housekeeping staff, typically one of the largest expenses for a hotel, can clean up to 13 or 14 average-size rooms per shift today at most Chicago union properties, industry sources say. Reducing that number would mean hiring more workers to clean the same number of rooms, potentially adding hundreds of thousands of dollars in annual labor expenses and further pinching hotel profits.

A Unite Here spokesman declined to comment. Spokesmen for Hyatt Hotels, Marriott International and Hilton Worldwide, which typically lead labor negotiations for most large hotels in the city, did not respond to requests for comment.

Avoiding the black eye of a hotel worker strike — or even the possibility that one is on the horizon — will be vital as Chicago works to rebuild its reputation as a top convention hub, says Amelia Roper, managing director at event planning firm HelmsBriscoe.

“It’s hard once you’ve alienated a group (with a work stoppage) to get them back. They have a lot of choices today,” says Roper, who is based in the Chicago area. “We have other issues that have tarnished us as a meetings destination — let’s not add to it.”

Still, both sides have a powerful incentive to iron out unprecedented issues and help the industry recover, says Russ Melaragni, who spent a decade as vice president of labor relations for Hyatt before becoming CEO of the Chicago-based Hotel Employers Labor Relations Association, which advises major hotels in labor matters.

“In a strike, no one wins,” he says. “Especially the employees that are out of work.”