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About Jerry
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Jerry Merkin has spent more than 40 years in business-to-business publishing with such titles as FLOORING, HOTEL & MOTEL MANAGEMENT and HOTEL BUSINESS. Now retired from publishing, Jerry devotes much of his time to consulting for GLM, LLC, specifically on the International Hotel/Motel and Restaurant Show.
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Jerry's Blog
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Oct
15
Written by:
Jerry Merkin
10/15/2009
 While the recent year long recession that has affected the hotel industry so traumatically appears to be over, however, its effects, or to put it more succinctly, “aftershocks” will be with us for awhile. In most major markets, where business class hotels find themselves very much “under water”, cost cutting will have to continue and in all too many instances, the labor force will have to bear the brunt of layoffs. It’s either that or bankruptcy court.
This was pretty much on display last month in Boston, where the hotel industry has been trying desperately to counter the effects of a bitter downturn that saw it take a tremendous toll on the city’s major revenue producers, the meetings business, leisure travel and university derived business, but with very little success. Then on August 31st, the unthinkable happened, one major chain - Hyatt, dismissed about 100 of its housekeepers from three properties, many of them long time employees, and replaced them with outsourced labor at less than half the rate they were paying staff housekeepers. This action created a public relations nightmare for the Hyatt chain, as the dismissed workers claimed they were asked to train the outsourced labor and were told that they would be vacation replacements. Hyatt denied these charges, but the damage was done.
The uproar in Boston, a city that has seen many similar staff dismissals in the year long recession, caught everyone at Hyatt by surprise. Even though these employees were not unionized, the hotel union stepped in to offer its services to those dismissed. The goal was to give them a talking point in the soon to be battle that will be waged in Congress over Card Check legislation. They even flew one of the housekeepers out to Chicago to meet with Penny Pritzker, of the Hyatt family, and an early supporter of President Obama, The meeting did not happen, but the union got the political points it was seeking.
Meanwhile in Massachusetts, the Governor, taking note that he was “concerned over how the firings were handled”, threatened a state boycott of the Hyatt chain. In return, Hyatt offered to help the dismissed employees maintain health benefits through 2010 and help with new job placement at their salary level. However, the employees, with Unite Here backing, held steady in their demand to be reinstated.
My effort here today, is not to be another voice in this controversy, that is still being played out in Boston and in related labor actions in Chicago, San Francisco and Long Beach, but to make our national audience of hotel executives aware that they can look forward to increased union attempts to push on seeking to gain approval of the card check legislation that suddenly had been looking less likely due in large part to the lobbying effort of the American Hotel and Lodging Association among key legislators. Unite Here is not going to sit idly by and watch this “plum” pulled from its grasp, The uproar in Boston is only a part of the battle that is now being set in motion by Unite Here. In San Francisco, where the local contract is expiring, they are already taking to the streets in demonstration for a part of the profits generated by the industry in pre-recession years. In Chicago also in the throes of a new contract situation, demonstrators have taken to sit downs in front of the Park Hyatt and even drew in union supporters from Northern Indiana Casinos. In Long Beach, CA. the Hilton has been hit by union demonstrators seeking a card-check union vote at the hotel and are also calling for a boycott of the property. Moreover, Unite Here, which walked out of the AFL-CIO about a year ago, returned to the national union several weeks ago, obviously attempting to get more fire power, and take advantage of the commitments extracted from President Obama for their support before the election last November. Look for more discussions in Congress on card check, There will be much more before the arguments over this legislation takes place, probably after the vote on health care.
Therefore, I say to our audience, you need to be proactive and help support the AHLA in its efforts. In that, I strongly recommend that more of you in the executive ranks of the hotel industry attend the Hospitality Leadership Forum on Saturday, November 7th during IH/M&RS. During the all day meetings, the whole legislative slate that will affect the industry will come up for review, and the very effective Government Affairs Committee will bring in experts to counsel the industry attendees how they to can be effective in their local markets in helping to support positive legislation for an industry that is trying to recover from a very bad recession. I think, no I know, that you have to think beyond your day-to-day tasks and discover what is occurring on a national level that will affect you locally, and what you can do to counter issues that are negative to your operations. There is even a positive one that needs your support, a tourism promotion bill that has been approved by the Senate.
Obviously, the Hyatt’s in Boston were unprepared for the ensuing ground swell of criticism that followed the dismissal notices and were forced into a stance that should have been taken before the firings. No one wants to see these type of actions take place, but management, having been dealt these cards has to make certain the ship survives.
In a Harvard Business Review Blog this week, the author, Paul Michelman, says "any business that doesn't heed the lesson of Hyatt's experience, does so at its peril", going on to explain "the hit that Hyatt has taken to its brand is more than the fallout from a business decision, it is a reflection of the times. Today, business is presumed guilty" he continues, "blame the Wall Street Meltdown, blame runaway executive compensation, blame predatory mortgage lenders, blame whomever and whatever you want, but the conclusion for many people, business has been transformed from a beacon to a behemoth."
So make it a point to show up for the International Hotel/Motel & Restaurant Show and support your industry in these very perilous times. Don’t expect Joe to do it all for you. It’s time to close ranks and get on that train to recovery that will benefit everyone in this industry. For more information about the IH/M&RS and the Hospitality Leadership Forum, visit www.ihmrs.com.
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