Visitors to New York City can brace for even stiffer hotel bills and skimpier services starting in July when a new hotel labor contract goes into effect, industry experts told The Post.
The new contract — which follows hard-knuckle negotiations ahead of next month’s World Cup festivities coming to New Jersey — represents the “largest wage increases in our nearly 100-year history,” the union crowed last week.
Hoteliers say the pay hikes will ultimately get passed along to their guests.
“This is a shocking contract and will result in higher room rates and loss of services, because something has to give,” said one hotel executive who did not want to be identified for fear of retribution from the Hotel and Gaming Trades Council, which represents 30,000 city hotel workers.
Hotels will likely reduce housekeeping service hours, have fewer front desk agents and concierges on duty at the same time and cut back restaurant and bar hours, according to the hotel executive.
Some luxury properties, meanwhile, might eliminate turndown service in the evening. Others may also emphasize green initiatives, asking guests not to request new towels and sheets every day – which is also a labor saving strategy.
“If money is tight, hotels find a way to do less,” the executive said. “A full breakfast becomes a grab-and-go to simplify costs.”
But raising hotel room rates will depend on demand which is generally slower during the summer, experts say.
“Room rates do not change immediately though over time it is possible that rates go up,” Vijay Dandapani, chief executive of the Hotel Association for New York City told The Post.
New York City hotels charge on average $385 per night – the second highest rate behind Maui Island at $481 – for the most recent period between May 1 and May 16, according to CoStar Group, a hotel data analytics firm.
The hotel association said it faced an impossible situation with the union threatening a strike during the World Cup games in New Jersey next month.
“That would have resulted in major revenue losses for the industry and declining tax receipts for the city and state,” Dandapani told The Post.
New York City hotels already pay the highest wages in the country – on average about $40 per hour – but the latest contract, which was signed under the threat of a strike, gives housekeepers, front desk clerks, concierges, bellmen and other workers an average 5% raise each of the next eight years or 50% increase over the term of the contract, according to the agreement.
Housekeepers already earn more than rookie cops, firefighters and teachers and the raise will catapult their pay to $77,113 with $110,000 in salary alone in the sixth year, as The Post reported.
Front desk staff, who currently earn $41.31 per hour will be bumped up to $62.51 by the end of the contract, while bellmen who earn $24.05 – and earn gratuities – will eventually earn $46.65 per hour, according to the union.
The union also sponsored legislation that would have required hotel housekeepers to work no more than 3,500 square feet a day or to be paid double time, Dandapani said, adding “that would have been ruinous for the industry and forced more hotels to close.”
The hotel union sees the situation differently.
“This contract will deliver life-changing financial stability to the 30,000 hotel workers who are the backbone of the hospitality industry,” said the union’s president, Rich Maroko.
Cutting labor costs is not simple for hotels as there are job protections built into the contract, according to the union.
“Layoffs and reduced hours can only be determined by occupancy rates and any decisions on that would have to be discussed and agreed upon by both parties or it would go to arbitration,” said a union spokesperson.
Airbnb, for its part, says if room rates rise its because the hotel industry is greedy.
The union and HANYC waged aggressive campaigns against the home sharing industry, essentially decimating Airbnb’s market share in the Big Apple and supporting a restrictive law – Local Law 18 – which has imposed stricter regulations on Airbnb hosts.
“New York City hotels cost quadruple the national average—not because of workers, but because the decades-old hotel playbook has decreased supply and pocketed profits, pricing out visitors and screwing everyday New Yorkers,” Nathan Rotman, Airbnb director of US Policy Strategy said in a statement to The Post.
Airbnb is pushing for the city to relax Local Law 18 to exempt hosts who are homeowners in the outer boroughs and want to rent out their entire homes.
