03-06-2023, 10:10 PM
"Covid is over, the profits are back and it's time for an aggressive union to go to bat for their employees."
Unfortunately, it doesn't work that way. Before that happens the resorts will exhaust other strategies available to them like reducing maid service (this has been a trend for some time), coercing customers to tip more (already a trend), or importing foreign workers. If a combination of these strategies isn't successful, they will begrudgingly pay more, and thusly charge their customers more, which could ultimately put downward pressure on tourism.
The only data I can find shows that the Hilton Waikiki has about 3,000 rooms and 2,000 employees. Let's just call it .7 employees per room which is a reasonable estimate considering not all the rooms are occupied all the time. What's a living wage for a hotel worker? Let's say it's $30/hour. Then it will cost approximately $240 per night just to pay for the labor of keeping one hotel room operational. The building is old is probably a maintenance nightmare, I couldn't even hedge a guess what it would cost per room per night. Then of course you have leases, utilities, taxes, landscaping, insurance, and a million other expenses and before you know it adding $240 on top of all that. The property was kind of a dump when I stayed there, if they tried to get $1000/night there I can imagine that having some serious downward pressure on the amount of people that can afford Hawaii. Is $30/hour a living wage in Honolulu? Probably not. So make it $60 and add $480 to the cost of a hotel room. Ooops, don't forget health insurance, workers compensation insurance, employer share of FICA etc, so put labor cost at $600 per room per night.
I concede my figures don't have enough data points to be accurate, so no need to pick them apart. They are for illustration purposes only.
In your figure you list Hilton income at $1.25B. I think it's higher than that. But divide that by their number of employees (about 160,000) and you get they are making about $7,800 per employee. That's not a lot of wiggle room to remain profitable if one starts talking about jacking the wages up. Assuming they are full time employees, that means giving each one a raise of less than $4/hour would make them unprofitable.
Unfortunately, it doesn't work that way. Before that happens the resorts will exhaust other strategies available to them like reducing maid service (this has been a trend for some time), coercing customers to tip more (already a trend), or importing foreign workers. If a combination of these strategies isn't successful, they will begrudgingly pay more, and thusly charge their customers more, which could ultimately put downward pressure on tourism.
The only data I can find shows that the Hilton Waikiki has about 3,000 rooms and 2,000 employees. Let's just call it .7 employees per room which is a reasonable estimate considering not all the rooms are occupied all the time. What's a living wage for a hotel worker? Let's say it's $30/hour. Then it will cost approximately $240 per night just to pay for the labor of keeping one hotel room operational. The building is old is probably a maintenance nightmare, I couldn't even hedge a guess what it would cost per room per night. Then of course you have leases, utilities, taxes, landscaping, insurance, and a million other expenses and before you know it adding $240 on top of all that. The property was kind of a dump when I stayed there, if they tried to get $1000/night there I can imagine that having some serious downward pressure on the amount of people that can afford Hawaii. Is $30/hour a living wage in Honolulu? Probably not. So make it $60 and add $480 to the cost of a hotel room. Ooops, don't forget health insurance, workers compensation insurance, employer share of FICA etc, so put labor cost at $600 per room per night.
I concede my figures don't have enough data points to be accurate, so no need to pick them apart. They are for illustration purposes only.
In your figure you list Hilton income at $1.25B. I think it's higher than that. But divide that by their number of employees (about 160,000) and you get they are making about $7,800 per employee. That's not a lot of wiggle room to remain profitable if one starts talking about jacking the wages up. Assuming they are full time employees, that means giving each one a raise of less than $4/hour would make them unprofitable.