New York hotel crisis: Union-backed regulations will close affordable hotels and raise prices
New York City They want to regulate non-union hotels and raise costs. Banning the outsourcing of key functions like housekeeping and food and beverage makes it easier for workers to unionize, and hiring full-time employees is often more costly than buying just the hours you need.
Doing so would make non-union hotels less competitive, making it less attractive to be non-union, and making it easier to operate, but it would also drive some establishments out of business due to rising costs, and hotel room inventory in New York City is in very short supply.
- Hotels are being repurposed as housing for immigrants (more than 10% of all rooms)
- The city has all but banned Airbnb.
- Additionally, new hotel construction is restricted, with hotel unions having effective veto power over projects.
This explains why, even though business travel has not fully recovered, especially on the coasts, and leisure destinations are outperforming other major cities, “average room rates were 22.5% higher than 2019 and hotel occupancy rates were around 80% through May.”
New York City’s hotel workers union has extraordinary political clout, blocking projects that would turn hotels into housing or homeless shelters, which would drive up rents and put people on the streets, but would protect jobs and ruin the hotels.
of The New York Times To summarize Their power.
The Hotel Industry Council was one of the biggest spenders among independents in the 2017 election, when all 26 union-endorsed City Council candidates won. Some of these executives sit on the powerful Land Use and Zoning Commission, giving the union influence over key building decisions in New York.
Unions say the bill is about cracking down on crime, but it seems odd that they would worry when their members are not on the premises, or believe that small hotel operators will provide better security than the professional contractors they contract.
Crime is more likely to come from people flocking to cheaper hotels, rather than outsourcing housekeeping. Crime is also a problem in hotels rented by the city to house immigrants. Unions are not shy about saying the possibility of closing these establishments by imposing increased costs under the cover of crime is a positive.
(HT: @cracker)