May 11, 2005

While most of Los Angeles' major meeting properties remain at odds with the local chapter of hotel employee union Unite Here, the Beverly Hilton signed a two-year contract with the group. With a retroactive starting date of April 15, 2004, the agreement grants union workers their most hotly coveted and contested benefit: a 2006 expiration date, aligning them with workers at major properties across the United States whose contracts will all expire that year. "It's a big victory for rationality," said David Koff, a research analyst for Unite Here's L.A. chapter. "It undercuts any economic argument that what the union is proposing is beyond reason." Dennis Fitzpatrick, general manager of the hotel, is satisfied with the result. "It's a great relationship and both sides are pleased," he said. The union group and eight of the city's hotels will resume negotiations on May 25.

According to a study published by PKF Hospitality Research, an affiliate of PKF Consulting, hotel labor costs increased 6.3 percent in 2004 compared with 2003, which saw a 7.7 percent rise over 2002. Currently labor costs represent 45.9 percent of hotels' operating expenses; the rise in benefit costs (16.6 percent in the last two years) contributed to the bulk of the increase. The report suggests the rise in business travel volume has spurred hotels to ramp up staff levels as they reinstate services and amenities to meet increased demand.

Last Wednesday, Chicago's Metropolitan Pier and Exposition Authority announced sweeping changes in union workplace rules at McCormick Place, the country's largest convention center. The agreement reached with the Chicago labor community includes the formation of a permanent council to make further amendments to McCormick's workplace rules as needed; relaxation of rules to let exhibitors hang their own signs and plug in their own equipment; straight-time billing for work started between 6 and 8 a.m.; reductions in the number of union employees required to perform small jobs; and creation of an auditing process to ensure labor-cost savings are passed on to exhibitors, rather than pocketed by contractors. "This is a new day for McCormick Place, one that means lower costs, greater flexibility and a more efficient show for customers," said Leticia Peralta Davis, CEO of the MPEA.

Following weeks of anti-Japanese protests in cities throughout China, a major tech show, China IT Expo 2005, is banning Japanese exhibitors from participation. On the China IT Expo 2005 website, Shenzhen Mason Expo Corp., the Shenzhen, China-based organizer of the show, cites Japan's desire for a permanent seat on the United Nations security council, "beautification" of Japan's wartime past in recent Japanese textbooks, and a territorial dispute over the oil-rich Diaoyu/Senkaku islands as reasons for barring exhibitors from Japan. The event will be held in Shenzhen May 17-19.

Baha Mar Development Co. Ltd. last week bought and assumed management of three adjacent properties in the Bahamas, comprising 1,941 rooms: the Radisson Cable Beach Resort, Nassau Beach Hotel and Wyndham Nassau Resort & Crystal Palace Casino. The company will spend $15 million on renovating the properties. By 2009, the hotels will be combined into a $1.2 billion, 2,700-room megaresort, Baha Mar, composed of a 500-room luxury hotel, a 1,000-room casino hotel and a 1,000-room convention hotel, with 150,000 square feet of meeting space. Asked how the resort would compare with Atlantis, a similar property down the street, Michael Sansbury, executive vice president and COO of Baha Mar, said, "We think Atlantis is an outstanding property, but our design is going to be a little more sophisticated."

The Palm Springs (Calif.) Desert Resorts Convention and Visitors Authority named a second interim president on Tuesday. Steve Morris, who recently retired from his post as president and CEO of Seattle's Convention and Visitors Bureau, will be paid $16,656 per month for 90 days and $20,000 a month thereafter to fill the top spot while the authority searches for a permanent president. The position opened up after Michael Fife retired in March following charges of financial improprieties.