The hotel union contract that was ratified last week has some New Yorkers reconsidering their career choices.
Under the new eight-year agreement between the Hotel and Gaming Trades Council and hotel owners, some New York City hotel workers are on track to become six-figure earners by the early 2030s. Housekeepers’ hourly wages will rise from roughly $40 to more than $61 an hour, putting annual pay north of $100,000 by the sixth year of the deal.
The agreement covers nearly 30,000 workers at more than 250 hotels across the five boroughs. The union hailed it as the largest wage increase in its nearly 100-year history, with non-tipped workers receiving an additional $21.20 per hour over the life of the contract.
For hotel owners, though, the deal was less a victory lap than a surrender.
“There were two big things that got us to where we were,” Hotel Association of New York City President Vijay Dandapani told this reporter after the vote. “One was the threatened strike.”
The possibility of a labor stoppage loomed especially large because of the 2026 FIFA World Cup, which is expected to flood the region with visitors next month. Union leaders openly floated a strike, even launching a FIFA-themed website warning of possible “strikes, pickets and lockouts.”
“A strike during FIFA would have been ruinous for everybody,” said Dandapani. “The city, for us and for the workers as well.”
The other major pressure point was a proposed City Council bill that would have dramatically reduced the number of square feet a housekeeper could clean in a shift. Dandapani described the measure as a potentially “crushing blow” to an industry he argues still hasn’t recovered from Covid.
That may sound dramatic, especially at a time when Manhattan hotel rates hover around $334 a night and occupancy remains strong. But hotel owners insist the economics are shakier than they appear.
The industry is grappling with rising labor costs, inflation, tariffs, weak international tourism and New York’s notoriously high operating expenses. Dandapani noted that 18 city hotels have permanently closed or been converted since the pandemic, eliminating roughly 6,500 jobs.
International tourism, the lifeblood of the city’s hotel market, has also softened. Dandapani said Canadian travel to New York dropped roughly 20 percent this year, while visa delays and geopolitical instability are deterring overseas visitors.
“We’re nowhere near the 2019 mark of 66.7 million visitors, with international [visitors] making up 13.5 million,” he said. “This year we’d be lucky if we had 11.5, and international visitors are really, really important because they spend four times the money as domestic travelers.”
Even the World Cup may not be the bonanza many expected. Despite predictions of 1.2 million visitors tied to the tournament, Dandapani said hotel bookings so far have been underwhelming.
Still, few in the industry seem eager to relitigate the deal publicly. Owners described the contract as painful but preferable to the alternative.
“It was a very hard-fought negotiating session,” BD Hotels principal Richard Born said after the agreement was announced. “My hope is that the hotel industry flourishes, so that we can pay all these obligations.”
That’s the balancing act now confronting the city’s hotel sector: workers just secured historic raises, but owners are warning the industry remains on shaky footing.
As Dandapani put it: “It’s a win for the unionized workforce, but it’s going to be a struggle.”
What we’re thinking about: Is 141 Willoughby — the newly built Brooklyn office tower that BH3 Management and Capstone Equities plan to reposition into a mixed-use property with more than 200 apartments — an early sign that more of the borough’s gleaming but underused Class A office buildings could ultimately become housing? Send thoughts to elizabeth.cryan@therealdeal.com.
A thing we’ve learned: Tempo tissues, the European brand with a near-cult following among travelers and expats, are supposedly softer and sturdier than standard American drugstore tissues. A fellow parent shared this tip with me ahead of my daughter’s high school graduation today, where I’ll certainly need many tissues.
Elsewhere…
— New Jersey Governor Mikie Sherrill said this week she supports new legislation to regulate data centers and is pushing policies to curb aspects of the fast-growing but controversial industry, the New Jersey Monitor reported. Sherrill said her goal is to increase oversight and accountability while still keeping the state competitive in artificial intelligence innovation.
— Train service was disrupted ahead of Friday morning’s commute after a fire broke out overnight on a maintenance train at New York’s Penn Station, injuring five people, according to the New York Times. By midmorning, Amtrak and NJ Transit service in and out of Penn Station was still suspended, while Long Island Rail Road had resumed full operations after an earlier halt in both directions.
Closing time
Residential: The most expensive residential sale recorded Friday was $6 million for a 1,728-square-foot condominium at 160 Leroy Street in the West Village.
Commercial: The most expensive commercial transaction was $31 million for a future development site at 47-15 34th Avenue in Astoria. Jade Century Properties purchased the property from Ashley Young LLC.
New to the Market: The highest price for a residential property hitting the market was $15 million for PH53 at 277 Fifth Avenue in NoMad. Leonard Steinberg, Hailan Cui and Amy Mendizabal with Compass have the listing.
Breaking Ground: The largest new building permit filed was for a proposed 11,804-square-foot gymnasium at auditorium for Touro University at 75-45 150th Street in Kew Gardens. Frank Michielli of Michielli + Wyetzner Architects filed the permit on behalf of Touro University.
— Matthew Elo