By David Weese
Staff writer
Despite telling its unions that it is suffering from economic difficulties and cannot meet the union’s contract demands, Starwood Hotels has just announced a huge expansion plan.
Last week, Starwood hotels—who have been locked in contract negotiations with Unite Here workers since their contract expired on Aug. 31—announced plans to build some 80 to 100 new hotels that would create 12,000 new jobs, half of which should be here in the U.S.. The company employs nearly 145,000 workers at hotels in more than 100 countries.
On Oct. 28, nearly 89 percent of Unite Here hotel workers voted to authorize a strike against five downtown hotels run by Starwood Hotels & Resorts Worldwide Inc.. That vote did not initiate a strike, but gave union leaders the authorization to either call a strike or a boycott.
Those hotels include the “W” Lakeshore, the “W” City-Center, the Westin Michigan Avenue, the Sheraton Downtown and the Tremont Hotel.
Contract negotiations with Unite Here workers at 25 other downtown hotels, including Hilton and Hyatt branches, are also ongoing. Contracts covering some 6,000 workers at Chicago hotels also expired on Aug. 31.
Unite Here Local 1 spokesperson Annemarie Strassel said that there has been “no major changes in negotiations since November.”
Strassel said when her union crunched the numbers, Starwood’s current proposal would see half their members lose their health care benefits if the union accepted Starwood’s present offer. “So that’s a very serious prospect,” Strassel said. She said Starwood’s offer would also essentially freeze wages over the next few years. She said that Chicago’s hospitality industry is projecting major revenue increases in the next two years, so she said freezing workers wages “would be a significant problem.”
“We absolutely believe that the hotel industry as a whole—Starwood included—is using the economy this year as an excuse to push our workers to make concessions after having won some significant changes in health care and improvements in wages that have lifted our workers out of poverty,” Strassel said.
In a statement, Frits van Paasschen, President and CEO of Starwood said, “Today, the travel industry employs 7.7 million Americans—more than double that of the auto industry—and travel is uniquely positioned to create even more jobs as the economy continues to recover. After a year of hunkering down and cutting costs, companies are driving their topline again. By definition this means getting back on the road, which not only benefits their own business, but also helps spur job creation.”
Although she said she was not familiar with the details of Starwood’s expansion plans, Strassel said, “[This] is consistent with the problem we have experienced since negotiations began, which is that the [hotels] are telling us they are in crisis because of the economy, but their behavior and the profits that we see coming in to them contradict that.
“We want the company to grow. We want it to expand,” Strassel said. “If it has international aspirations, we think that’s great. But what we’re most concerned about is the workers here in the city of Chicago. We’re concerned that they don’t take advantage of current economic circumstances to push our workers backwards.”
Starwood operates three hotel brands here in the U.S., including Westin, Sheraton, and “W” Hotel, and six more worldwide. Starwood is expected to be opening hotels in Austin, Texas, Brooklyn, N.Y., Biloxi, Miss., Los Angeles, Ca.l, Kalamazoo Mich. and on Vieques Island in Puerto Rico this year.
Starwood said that nearly 10,000 people applied for just 300 openings at its recently opened “W” Hotel in Washington, D.C., more than 10,000 people applied for its 400 positions at the “W” Hollywood Hotel & Residences, and more than 400 individuals applied for its 30 housekeeping positions at the Sheraton Augusta Hotel in Georgia, which opened in December.
Among the other hotels that Starwood plans to either build or renovate are the Astor Hotel, scheduled to open in May 2010 after a $22 million renovation, and the Malus Sanya, a newly built resort set to open in late 2012. Both these hotels are located in China, and are part of the hotel chain’s Luxury Collection. The hotel line saw seven new deals and five hotel openings in 2009.
“By working with the right partners on the right properties in the right places, The Luxury Collection has enjoyed steady and strategic international growth in key markets like China, even amidst challenging times,” said Simon Turner, President, Global Development, Starwood Hotels & Resorts in a statement. “In addition to new-build properties, Starwood is attracting a growing number of owners and developers who seek to rebrand existing properties as Luxury Collection hotels. By doing so, they maintain their independence, while tapping into the power and breadth of the Starwood network, including our Starwood Preferred Guest® program, which drives business for owners and provides guests unprecedented access to the world’s finest luxury hotels.”
Starwood also entered into a franchise agreement with Libertador Hotels, Resorts & Spas, and on Jan. 14, it announced the opening of Hotel Paracas, another Luxury Collection Resort. The Hotel Paracas will be the first of three Luxury Collection hotels opening in Peru over the next two years. According to the company’s announcement, the hotel is “ideally located on Peru’s pristine southern Pacific coast and surrounded by the Paracas National Reserve and the Ballestas Islands, Hotel Paracas features 120 guest rooms with private terraces, a 5,000 square foot spa, two outdoor pools, more than 5,000 square feet of event space and two signature restaurants and lounges.”
Starwood will also soon unveil “Tambo del Inka, a Luxury Collection Resort & Spa in the sacred valley of Urubamba followed by the 2011 opening of Palacio del Inka, a Luxury Collection Hotel in Cusco, the capital of the ancient Incan Empire. Each spectacular property will seamlessly integrate local customs, culture and natural influences to offer global travelers unique and exceptional experiences in one of Latin America’s most culturally diverse destinations,” a company press release said.
“The new Luxury Collection hotel in Paracas will provide guests with a magical setting enhanced by exceptional service and indigenous design,” said Osvaldo Librizzi, President of Starwood Hotels & Resorts Latin America in a statement.
Starwood also recently announced the opening of its first ElementSM hotel in New Jersey. The Element Ewing-Hopewell hotel, which is just 10 minutes outside of Princeton, is the seventh Element hotel worldwide.
The company’s announcement said the “Element, Starwood’s green trailblazer, made history when it launched as the only major hotel brand to mandate that its properties pursue the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification for high-performance buildings. With 127 guest rooms and more than 2,000 square feet of meeting space, Element Ewing delivers a no-compromise, eco-chic experience with inviting and inspiring public spaces, modern amenities and smart design. As an example of the hotel’s commitment to sustainable operations, Element Ewing will offer a curbside charging station for electric vehicles for local residents and guests alike.”
Strassel says she is concerned about the fact that Starwood seems to have the money for national and global expansion, but doesn’t have the money to take care of its workers here in Chicago.
A representative from Starwood Hotels was contaced by the Fox Valley Labor News for comment, but did not respond before press time.