WGBH News Reporter Marilyn Schairer spoke with Bruce Tracey, professor of management at the School of Hotel Administration at Cornell University,
Marilyn Schairer: As you’re probably aware, there has been a strike called at seven Marriott hotels here in Boston, where union workers have walked off the job. At issue are wages and cost of living increases. Marriott International has said the seven hotels where workers went on strike will remain open. However, some guests are saying the strike is already disrupting hotel service, such as housekeeping and the closure of hotel restaurants. Given your expertise in the hospitality industry, how will the strike impact the hotel chain?
Bruce Tracey: Certainly Marriott will have to respond in a direct way, if they want to keep the properties open. There will be some minimum services that they’ll need to provide, if they’re going to keep their doors open, housekeeping and so forth. But, in terms of the general impact longer-term, if the unions have their heels dug in, then it kind of depends on how successful Marriott can be in attracting individuals who are willing to cross the line and work under these conditions. I’m not sure of what the real flavor is in Boston right now, but. I’m guessing it’s not too tasty.
From either perspective, if they’re striking right now, that means that neither side is very happy with each other. It doesn’t seem like they’re really that ready to get back to the table and start chatting about the issues they’ve got in front of them.
So, to that end, if you’re going to put this into Marriott’s perspective, they’ve got some contingency plans that they’re developing right now. They’re looking at their business pace and trying to decide based on going into the next few months, whether they can sustain whatever business they’ve got in their books right now with the skeleton crew that they’re likely to have. And if not, then they’re going to have to be leaning a lot on their management teams and/or trying to get some other folks to substitute for the striking workers. And that climate may be very difficult for people to want to make that walk across a picket line.
Schairer: Marriott hasn’t said whether they’re going to bring in replacement workers. The hotel says it will remain open and continue to provide excellent service. Will the hotel be able to do that, for paying customers?
Tracey: From a guest perspective, there will be a threshold for which they don’t believe that the value is there anymore, and at which time, you’ll find some guests that may start defecting. If this is a protracted process, and you see UNITE HERE Local 26 decide they want to stick around in this game for a while … this could certainly, as noted in other news sources, be a tell-tale of what’s going to happen in other cities. If that’s the case, UNITE HERE in Boston can start exerting a bit more pressure on Marriott as a whole.
Marriott has said their offer was on par with what the unions’ demands have been since the last contract.
Of course, all of this is based on the idea that Marriott is making a ton of money off the workers’ backs. And currently, yes, there are record profits, but roll back ten years ago when they were losing a bunch of money. There are good times and not so good times, and that’s the hard part in managing in an environment when you have some fixed costs and relatively high costs when you’ve got union agreements. So, Marriott is careful, it’s a very conservative company, to look at these issues in a very protracted way. They’re prepared for the extended impact. I don’t know how long they’re willing to wait, and it depends on whether this bleeds into other markets.
Schairer: The strike has now spread to other cities — San Francisco, San Jose, I think in Chicago they were already striking. What about the ripple effect with this? If this happens at Marriott, and then other workers at other hotels see that it’s effective or it isn’t, how will that change the landscape?
Tracey: The union folks are smart, and they’ve been able to negotiate contracts in such a way where they can really force the hand, not in a single market, but in multiple markets. And as a result, their broader impact on the hospitality industry has increased over time. So, in that regard, they’ve been able to have, and they will have more leverage when it comes to these negotiations, and they may be able to play that harder ball than they would have otherwise.
So again, time will tell on this and it depends on how Marriott responds. I know other companies are looking at Marriott and will respond almost in kind, but there may be others who can’t, you know, play the same waiting game that Marriott is or is likely to. And as a result, they may be first-mover advantage, who knows.
Schairer: As a professor of the hospitality industry, if you had to teach a lesson on how to resolve this or avoid this, what would you say?
Tracey: Great HR. If you have policies and practices that really do take care of your employees on the most fundamental levels — and that’s one of the challenges in our industry. While some companies may be making a ton of money, the margins aren’t huge, especially in relation to other types of industries. So, the challenge is, in very thin times, carry yourself through with the margins you have in the good times. It’s a matter of laying a really solid foundation for making sure that you hire people who are well suited for these jobs. In our industry, a lot of the compensation is based on what the market is willing to bear.
So, if retailers only going to be willing to pay a certain amount for jobs that require similar types of skill or health care, retail banking, or similar service-oriented jobs, it’s a pretty competitive market out there and you don’t what to overprice yourself. So, there’s a lot of sensitivity on compensation and benefits in our industry.
So, you know, it’s going to be something where that’s going to be part of the picture of making sure that you can attract and develop and retain good people. In addition to making sure you’re competitive in wages and benefits, you need to make sure you have good work environment, where people feel respected and that they have some voice, and that they’ve got opportunities to grow and develop and be part of something other than just a capitalistic enterprise. And as a result, companies that do this well, they can avoid a lot of the headaches, because they are more progressive in terms of how they take care of their people.