Strike-related dampening of visitor numbers could cross into 2019

Some 2,700 Marriott hotel workers in Hawaii spent a sixth day on strike Saturday, seeking higher wages and better benefits while exacerbating challenges to the state’s visitor industry, which already has had to deal with floods, a volcanic eruption and hurricanes.

The state Department of Business Economic Development and Tourism’s third-quarter 2018 forecast anticipated visitor arrivals by year’s end would rise above 9.9 million, up more than 6 percent from 2017. DBEDT also forecast visitor spending to grow to $18.4 billion, a more than 9 percent gain from the previous year.

If correct, Hawaii would achieve its seventh consecutive record-setting year in tourism. Tourism officials say that’s still possible given the strength of the first half of 2018. But they said a union strike, especially a protracted one, would only add to a dampening that began in June.

So far there’s no end in sight to the strike that began Monday when negotiations between Unite Here Local 5 and Kyo-ya Hotels & Resorts, which owns the Marriott-managed Sheraton Waikiki, The Royal Hawaiian, Westin Moana Surfrider, Sheraton Princess Kaiulani and Sheraton Maui, reached an impasse.

Local 5 spokeswoman Paola Rodelas said the union has contracts expiring this year at 20 hotels, including the Marriott and Kyo-ya properties, but no bargaining will begin at other properties until workers get a fair contract from the largest hotel employer.

With so many Local 5 contracts pending, it’s hard to predict the strike’s duration or if it will grow to include other properties. Workers at the Sheraton Kauai Resort and the Marriott Waikiki Beach Resort & Spa, which are operated by Marriott, not Kyo-ya, also have voted to authorize a strike. Rodelas said the 640-plus union workers at these properties “could walk out at any time.”

A bigger concern than the strike-related cancellations that are hurting tourism now is the potential for the labor dispute to curb next year’s bookings, said Keith Vieira, principal of KV & Associates, Hospitality Consulting, who was formerly a top executive at Starwood Hotels & Resorts, which once managed the Kyo-ya properties.

“We’ll still probably finish 2018 ahead of 2017 because the beginning of the year was so strong. However, the booking pace in the fourth quarter is considerably behind last year and specials are emerging in the market. That will carry over and automatically soften the first quarter, which is a worry given that the first quarter often sets the pace for the year,” Vieira said.

He said October 2017 was pacing far ahead of where Hawaii tourism is now, and Mexico, the Caribbean and Europe also are competing vigorously for visitor dollars.

Jack Richards, president and CEO of Pleasant Holidays LLC, had predicted Hawaii would break a benchmark 10 million arrivals this year. He’s not as bullish now.

“We’ll still probably come in at 9.7 million or 9.8 million tourists for the year, but I don’t think that we’ll hit 10 million visitors anymore,” Richards said. “We’ve had volcanoes, hurricanes, floods and now union issues.”

The strike is another serious issue for Hawaii tourism, which depends mainly on leisure visitors, who are more discretionary about their travel choices. However, it also could damage the state’s meetings, corporate and incentive travel market, which already was down about 2 percent year-to-date through August. Historically, meeting planners sign most of their contracts in December and are extremely sensitive to anything that could cause a blip in attendance.

Already the Hawaii Sheet Metal Workers Union elected to support the strike by checking out of 100 rooms that were booked for a week at Sheraton Maui. The Association of Flight Attendants, which books hundreds of crew rooms nightly in Honolulu, also has announced its members won’t cross picket lines.

Lost business could come from other union supporters, including: the University of Hawaii Professional Assembly, United Public Workers, National Brotherhood of Electrical Workers, the International Union of Elevator Constructors, United Food and Commercial Workers Union and the Ironworkers Union. Members of the Democratic Party of Hawaii showed solidarity by joining picketers at the Sheraton Princess Kaiulani Saturday.

Rodelas said the strike is making “an impact on finances” for Kyo-ya and for Marriott.

Meanwhile, guests staying at properties where workers are striking have been dealing with long check-in lines, restaurant closures and cutbacks to valet parking, housekeeping and other serv­ices.

Chanting strikers, some loudly banging on pots and pans, also are disturbing nearby Waikiki guests and residents. On Friday, 1,000 strikers and sympathizers marched to the beach, where they stood in front of the Westin Moana Surfrider yelling “Don’t check in, check out.” They also held a union rally Friday on a grassy mound near the Duke Kahanamoku statute, one of Waikiki’s most popular photo spots.

“The union has taken a scorched-earth approach to gain immediate impact. But if they harm the booking pace, it will hurt them because there will be fewer work opportunities when they return from this strike,” Vieira said.

Kyo-ya declined to comment on the strike Saturday, but Local 5 said the company still has not offered them new bargaining dates.

Workers are asking for more pay, more job security and safer working conditions. The average Local 5 housekeeper makes roughly $22 an hour in a state where the National Low Income Housing Coalition estimates that it takes more than $35 an hour to afford to rent a two-bedroom apartment.

The union has requested a contract that provides a $3-an-hour wage increase in the first year, but Kyo-ya has offered only a 70-cent increase for both wages and benefits.