Philadelphia is losing as much as $30 million a year in convention business from labor-union groups because the two largest hotels that are closest to the city’s convention center, the Philadelphia Marriott Downtown and Loews Philadelphia, are non-union, according to a Convention and Visitors Bureau official.
If the hotels supported unions, the city could have the potential to attract one or two citywide labor-union conventions a year, with delegates spending $15 million to $18 million per convention, the official said.
The Convention Center has been a magnet of labor controversy since it opened in 1994 – from the racial makeup of union construction crews to the failure of management to resolve jurisdictional disputes among the six unions working there.
Now, the city’s convention business has another union problem.
Labor unions, which hold big multinight membership meetings attended by thousands of delegates, are not booking their conventions in Philadelphia, a loss of up to $30 million a year in delegate spending, estimates Convention and Visitors Bureau president Tom Muldoon.
The reason has nothing to do with problems, union or otherwise, at the Convention Center.
“Any union that has a convention will not have a convention in a non-union hotel,” said Matthew Briggs, legislative and political director with the International Federation of Professional and Technical Engineers.
In Philadelphia, the two largest hotels closest to the Convention Center, the Philadelphia Marriott Downtown and the Loews Philadelphia, are non-union.
That makes the city a tough sell to unions, Muldoon said.
“We want to support and invest our union dues in locations and places that support union members,” Briggs said. “That’s the number-one criteria that no union would ever, ever go against.”
In Philadelphia, which attracts health, education, and technology conventions, the labor market would fall in the miscellaneous category, with the potential to bring in one or two citywide conventions a year, if the hotel situation were different, Muldoon said.
A citywide convention uses several hotels to accommodate at least 2,000 guests on the convention’s busiest night. Delegates typically spend $15 million to $18 million, Muldoon said.
While the amount of potential union business is relatively small, about 5 percent, and shrinking, as union membership declines, it comes at a good time. Unions tend to book in the summer, the slow season for conventions in Philadelphia, Muldoon said.
In March, Pennsylvania’s expanded Convention Center will open in a tough period. There will be a push to make good on the state’s $786 million investment, yet, in the recession, bookings are down.
“Everyone is cannibalizing each other,” said Neal Kwatra, the executive director of INMEX, a convention planning and consulting group started by Unite Here, a hospitality labor union. “Everyone’s campaigning for the same strategic dollar, so the smartest ones are working the niches.”
Labor’s niche includes progressive organizations and Democratic political groups.
Those dollars are going to Las Vegas, Chicago, and Los Angeles, where the majority of hotels employ unionized housekeepers, bellhops, bartenders, and catering staff.
The union makeup of a hotel’s staff is not the only influence on union convention decisions.
“They [union conventions] go elsewhere because they can’t afford Philadelphia, because the union labor is too expensive,” said Peter Tyson, vice president of PKF Consulting, a hospitality advisory firm with offices in Philadelphia. Tyson is referring to Convention Center costs resulting from its higher-priced unionized workers.
Las Vegas captures the most union business by far. It is more centrally located, flights are cheap, its hotel rooms are inexpensive, and gambling is a big draw.
Plus, “in Vegas, just about every hotel is union,” Briggs said.
In Philadelphia, slightly more than half of the 4,157 hotel rooms in the 13 hotels within a four-minute walk of the Convention Center are controlled by the nonunion Marriott and its two nearby affiliated hotels. In the same radius, by contrast, there are 648 rooms in three smaller union hotels.
Right now, the city’s largest union hotel, the 758-room Sheraton City Center at 17th and Race Streets, is a 10-minute jaunt from the Convention Center. In March, when the expansion opens, a huge entrance on Broad Street will put the hotel, the city’s second-largest, a short walk away.
Despite the obstacles, Muldoon says his bureau’s Washington-based sales team still tries to land union business.
“Some unions will headquarter at the Sheraton and look the other way if their members book elsewhere,” he said.
Philadelphia was host to 15 citywide conventions in 2009, none of them unions. But it has landed big union business in the past. In 2000, the American Federation of Teachers and the American Federation of State, County and Municipal Employees (AFSCME) met here. The International Brotherhood of Teamsters came in 1996.
In 2006, the 3,000 delegates of the American Postal Workers Union chose Philadelphia because local union leaders pitched the city up the chain of command.
“It took some convincing,” said Sally Davidow, union spokeswoman. Although Philadelphia had enough union rooms to accommodate the group, members were dispersed among hotels, not ideal for building cohesiveness.
For some unions, such as the United Steelworkers, that is a deal-breaker. “We try to look for one [unionized] hotel that can house the bulk of our people. Our preference is to hold our convention at the same facility,” said John Perquin, a top union official.
In 2012, the International Association of Fire Fighters will be in Philadelphia. After a pitch by Philadelphia union leaders, firefighters voted to come here instead of Detroit.
“Philly’s a great city,” said Bill Gault, president of Local 22 in Philadelphia.
But the basics had to be in place. “Our policy is pretty explicit,” said Bill Glanz, a spokesman from the union’s Washington headquarters. “We pick a host property that is a union hotel. It has to be able to provide at least 750 rooms, and it has to be no more than four blocks from the convention site. We do everything we can to find overflow properties that are also union hotels.”
Glanz said the union would set its host hotel at the Sheraton, which will then be less than four blocks away.
So why aren’t there more union hotels in Philadelphia?
Currently, two rival unions – Unite Here and Service Workers United – want to represent the same workers, a distraction. Each accuses the other of ineffective organizing.
Politics also plays a part.
In the 1980s, when the Convention Center was being planned, Republican Gov. Dick Thornburgh made its funding contingent on finding a 1,000-room convention hotel company willing and able to finance its own construction.
The two chains contending for the project were the Marriott, which has vigorously opposed union organizing, and the more labor-neutral Hyatt.
Philadelphia’s Democrats may have been more friendly to the Hyatt bid, Muldoon said, but Hyatt would not commit to the financing.
Meanwhile, Los Angeles is happy to get union business.
“The bulk of our hotels are union,” said Michael Krouse, senior vice president of sales for LA Inc., Los Angeles’ Convention and Visitors Bureau.
“Labor has been so supportive in our efforts to bring their conventions to our cities. The nonunion hotels don’t fight us on that,” Krouse said. “They are reaping the benefits” because of spillover during a convention.
With two salespeople working the niche, Los Angeles booked AFSCME and the postal workers for 2012 with 10,500 delegates and 42,000 room nights combined. In 2009, Los Angeles signed 137,000 room nights’ of future union business with an estimated economic impact of $117.2 million, Krouse said.
This spring, Krouse was host to a hundred labor leaders at lunch in Washington, where many unions have headquarters.
In Los Angeles, local union leaders were given coffee and a hard sell at a brunch at the Staples Center. Keynote speakers included a union housekeeper. Her job: Persuade local leaders to pitch Los Angeles to their unions’ convention planners.
“That’s the dramatization of the message,” Krouse said. Bring the business. Keep her employed.
To connect to union clients, Krouse draws on his roots as a Teamster tour-bus driver. “You can’t go in there and be a snotty-snot, a Mr. Sensitive,” he said.
“Being a union city is not a bad thing, if you know how to work with unions. It isn’t a political decision, it’s a business decision. They represent money to me and our city.”
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