Portside

A New York hotel union has reached a deal with hotel owners and operators that will boost the wages of hospitality workers by $7.50 an hour, the largest increase in the union’s 100-year history. 

The agreement covers 7,000 members of the Hotel and Gaming Trades Council who work at 87 suburban hotels spanning from Princeton, N.J., to New York’s Albany region and Long Island. The five-year pact has already been ratified by the employers and is expected to be ratified by workers this month, according to union President Rich Maroko.

The new contract doesn’t include New York City hotels, where union members are also represented by the Hotel and Gaming Trades Council and where wages are still at a premium compared with the suburbs. 

But the hotels’ proximity to New York City was a major factor driving the significant wage increases in the new agreement, said Arash Azarbarzin, chief executive at hospitality management company Highgate.

“The gap is definitely closing,” he said. Highgate runs two New Jersey hotels covered by the new contract and is one of the biggest hotel operators in New York City, where it manages 36 properties. 

The wage increase reflects the intense pressure hotel operators are under to pay workers more amid inflation and lingering labor shortages. Despite a recent hiring spree by the hospitality industry, hotel owners across the U.S. have struggled to find and retain workers during the pandemic. Owners are raising pay and benefits and offering incentives such as retention bonuses, career-development programs and more flexible schedules.

Nationwide, about 10% of the hotel workforce is unionized, according to David Sherwyn, a Cornell University professor and director of the Cornell Center for Innovative Hospitality Labor and Employment Relations. Unions are most often found at brand-managed, full-service hotels in large cities such as New York, Chicago, San Francisco, Los Angeles and Honolulu. 

Nonunionized hotels in heavily unionized cities often pay as much or slightly more in hourly wages than nearby unionized hotels to attract talent, Mr. Sherwyn said. Many owners and operators boost pay in the hopes of heading off unionization, which typically results in much costlier benefit packages and less-flexible work rules.

Before the pandemic, hotel owners in areas with low union representation such as Miami or Atlanta would likely shrug at generous wage and benefit increases in New York, Mr. Sherwyn said. But recent successes by union organizers at companies such as Starbucks Corp. and Amazon.com Inc. could prompt hotel operators elsewhere to consider pre-emptively raising their compensation packages.

“I think that everybody’s looking around now and saying, ‘We’re in a labor shortage and we’re in a time of positive feelings about unions,’ ” Mr. Sherwyn said.  

Under the new union contract in New York, housekeeper and front-desk-worker hourly wages will increase from about $20 an hour to $27 by 2028, depending on their location. Hourly pay for cooks will grow to about $31, according to the union.

The agreement raises employer contributions to the union’s defined-benefit-pension plan by 40% over the life of the contract, which includes new benefits to subsidize child care and housing costs.

“Wage and benefits increases like this absolutely benefit hotels in terms of retention,” Mr. Maroko said. 

The union’s first contract covering suburban hospitality workers was signed by four hotels in 2013. It has since grown to include nearly 90 properties. This rapid growth gave it the added leverage necessary to extract significant wage increases, said Sean Hennessey, a hotel consultant and associate professor at New York University’s Tisch Center of Hospitality. 

Union officials have also lobbied lawmakers in New York and New Jersey for legislation benefiting the hotel industry, and therefore its ability to boost worker pay, such as limits on short-term rentals, Mr. Maroko said. 

Fre Bryant, who earns $23.30 an hour working at the front desk of a DoubleTree by Hilton in northern New Jersey, said she had been planning to leave after 18 years with the hotel. She changed her mind after hearing the details of the new contract. 

The agreement’s pay increases and added benefits for members, including subsidies for legal representation and child care, persuaded her to continue making the one-hour commute from her home in Bushkill, Pa. 

“I’m going to stick it out because this contract is so good,” said Ms. Bryant.