Labor contracts for at least 8,000 hotel workers begin to expire next year, adding another layer of uncertainty for an industry that is looking to emerge from one of the longest slumps in its history.

The majority of the union hotel employees affected are 7,000 members of UNITE HERE Local 5 and represent workers at most of the major hotels in Waikíkí and more on the Neighbor Islands.[0x0b]

They include the Hilton Hawaiian Village, Starwood's four Waikíkí hotels — the Sheraton Waikiki, Royal Hawaiian, Moana Surfrider and Princess Kaiulani — Hyatt Regency Waikiki and Kahala Hotel & Resort as well as various Neighbor Island properties.

The International Longshore and Warehouse Union represents about another 1,000 members statewide at hotels with contracts expiring in 2010. ILWU officials said negotiations for the majority of contracts at other hotels where they represent workers have been pushed back into later years.

UNITE HERE Local 5 leader Eric Gill said he expects to be fighting proposed cuts in his members' benefits as well as increasing workloads. He said he isn't prepared to recommend that his members lose benefits and wages while the large corporations that own local hotels continue to turn a profit.

'WE FIGHT'

Gill said some of the same hotel companies that operate in Hawai'i are proposing cuts in medical coverage and benefits at their properties in San Francisco. Gill said he expects those kinds of proposals to show up here next year.

If that happens? "We fight," he said. "We are not going to retreat from the standards that we have set for the industry."

At Hilton Hotels, Jerry Gibson said the economic hard times have affected the whole community. "There isn't a union or non-union hotel that isn't experiencing difficult times," along with the employees who work there, he said.

The stakes are high because any lingering disagreement has the potential to disrupt Hawai'i's visitor industry, which had enjoyed high occupancy and record high revenue and room rates until a global economic downturn triggered a tourism slump about 18 months ago.

The last major hotel strike in Waikíkí was in 1990 and lasted 22 days.

"I feel this is not a choice between sides but a choice to keep valuable businesses healthy for the future and to work jointly for the common good," said Gibson, who is area vice president and managing director of Hilton Hawaii.

Gill has been the financial secretary-treasurer of UNITE HERE Local 5 since April 2000. And he's worked in the industry for decades, time enough to have seen negotiations go through good times and bad.

Gibson also said, "Hawai'i is a different place. We want to work together in harmony to build a future that is safe and secure for generations to come."

Gill said the managers in Hawai'i aren't the ones in control. He said most hotels are now in the hands of out-of-town owners controlled by multiple global financial companies, rather than the local hoteliers of decades past. "None of the decision-makers are here in Honolulu."

He pointed to Goldman Sachs' ownership stakes in Hyatt Hotels and Marriott Hotels; Blackstone Group bought Hilton Hotels in 2007; and Cerberus' interest in Kyo-ya Hotels and Resorts, which owns Starwood's Waikíkí hotels. (Cerberus owns a 65 percent stake in the Japan-based owner of the Sheraton Waikiki, Princess Kaiulani, The Royal Hawaiian and the Moana Surfrider.)

Instead of meeting with the hotel manager who lives in the same community, Gill said the decision-makers often have corporate values: "Their intent is buy, flip, make money, move on."

For example, Gill said managers will trim the numbers of employees working to make up for deep discounting of rates. But cutting the number of front desk workers may mean that a guest can't check out as fast as they could before and miss a flight.

Starwood's Keith Vieira, senior vice president and director of operations, predicted "one of the most difficult negotiations we've ever seen" next year.

"As we go through the worst economic period in recent memory, everybody's hurting," Vieira said. He said this downturn is lasting longer than the dive that followed the Sept. 11 attacks.

"We want to get a fair contract, but it's certainly going to be a challenge," Vieira said. "Profits are significantly down."

He said hotel companies are looking to find ways to reduce health care costs. And after the hotel's owners have spent hundreds of millions on renovations, they find themselves charging less instead of more for the upgraded rooms.

And the timeline for recovery is uncertain. Are the properties in the red? "We're not losing money," Vieira said.

"The rebound seems like it will take much longer, it will take years," Vieira said.

OUTSIDE O'AHU

Willie Kennison, head of the Maui division of the International Longshore and Warehouse Union, esti-ma-ted that in all of Maui County, including Läna'i and Moloka'i, there are a little more than 4,000 hotel worker members of his union.

He said the Grand Wailea alone employs 1,000 members. But Kennison and his ILWU colleague on the Big Island won't be involved in that many negotiations in the near term because of a policy decision to extend contracts, and push back raises and expiration dates into 2011, 2012 or 2013.

"Tourists are not traveling as much as they have in the past," Kennison said. He normally tries to negotiate at least a five-year contract, which offers more stability for workers and employers.

While it's not ideal to have members sitting at home on furlough, he said it's better than the alternative. If they were laid off, they would be without work, and when they came back, they would lose everything as far as benefits and seniority.

Added ILWU Big Island division director Richard Baker Jr.: "We were able to defer contracts and keep our people working. We worked out contract language protecting their benefits."

While the union wasn't happy with watching raises delayed or workers furloughed, the leaders thought the policy fit the times. "It's survival," he said.