Business

With strike behind them, Los Angeles hotels look to move on

Published

2 years ago

August 22, 2024

With strike behind them, Los Angeles hotels look to move on

On a spring day last year, representatives from dozens of Los Angeles-area hotels gathered for a meeting with the union representing their cleaners, front desk clerks and other workers.

The workers’ contracts with the hotels had expired and leaders from Unite Here Local 11 laid out a stark proposal for new agreements, which included an immediate $5 an hour raise for its members.

It was a nonstarter for the hotel owners and operators — so much so they refused to send their negotiators to the next bargaining session. Weeks of tense negotiations followed and when talks broke down, Unite Here launched a strike thought to be the largest ever to hit the U.S. hotel industry.

The strike’s intermittent work stoppages, which had staff at more than 60 hotels walking off the job, would go on for more than a year. Workers in red shirts sporting drums and horns became a fixture outside of Los Angeles hotels. Picket lines were tumultuous at times and the disruption riled hotel guests, who lashed out at workers.

But now calm has returned. All but a few of the hotels involved in the strike have agreed to new contracts, conceding on the wage increases that had kicked off the strike as well as other demands made by Unite Here. In all, workers are set to receive a total hourly boost of $10 over the course of the four-year contracts.

While the labor unrest roiled a keystone of Southern California’s tourism industry and the new contracts have added to the hotels’ labor costs, hospitality experts said the strike isn’t expected to have a lasting impact on the region’s hotel industry. Hotels have emerged largely unscathed as demand for rooms in the region is healthy and revenue for the hotels climb.

“Right now people have been traveling and I would say hotels are doing well,” said Ed Fuller, a hotel and lodging industry veteran who previously served as Marriott International’s president and now runs an Irvine-based consulting group.

With the strike out of the way, Fuller said the hotel and broader tourism industry should be focused on boosting the number of international tourists back to pre-pandemic levels and “having the commitment that Los Angeles — and Orange County, and San Francisco and the whole state — is selling at all times.”

Upscale hotels in thriving coastal markets, which typically have unionized workforces, are doing relatively well, said Ryan Kawai Sanchez, an associate with real estate firm Matthews.

In particular, occupancy rates at hotels in Los Angeles County averaged more than 70% over the last 12 months, putting the region above the national average of 62.7%, according to data released by the travel industry nonprofit Visit California. The same is true for Orange County.

But not all hotels in the L.A. region are thriving, and location can be a deciding factor. Occupancy rates at the Glendale Hilton, for example, are hovering around 50%, said Travis Gemoets, an attorney at Jeffer, Mangels, Butler & Mitchell, which represents the property. Glendale, Pasadena and other more out-of-the-way areas don’t offer the same draw as more desirable and conveniently located areas such as downtown L.A. and near Los Angeles International Airport.

“It’s just a different market,” Gemoets said.

It was those differences in performance, Gemoets said, that led the Glendale Hilton’s owners to be reluctant to make a deal with Unite Here, since the increased wages the union was demanding would hit the hotel harder than more prosperous properties. The hotel eventually agreed to the wage increase last month, after other hotels in the area reached tentative agreements.

Workers took to the picket line at the Hilton Pasadena in December.

(Myung J. Chun / Los Angeles Times)

“We want labor peace and that’s why we agreed,” Gemoets said.

Union leaders have said they try to extract greater concessions from hotels that prolong negotiations. For instance, in its agreement with Hotel Figueroa, announced last week, the union won an extra dollar raise for non-tipped workers, amounting to a total hourly boost of $11 over the course of the contract, as well as an extra $1 per hour contribution to workers’ pensions. In its deal with the Glendale Hilton, the union secured additional hours for culinary workers and higher pay for tipped workers.

Hotels — whether unionized or not — are battling higher labor costs due to ripple effects from fast-food minimum wage legislation and rising insurance premiums, as multiple insurance providers have abandoned the California market, experts said.

Motels and lower-tier hotels, particularly in California’s rural areas or regions generally with less foot traffic than touristy coastal areas, are lagging behind, Sanchez said. Overall, hotels in the state haven’t completely recovered to pre-pandemic occupancy levels, he said.

“We are really only seeing that year-over-year growth in the luxury sector, and that’s largely due to higher-end customers not being as affected by inflationary pressures as the overall population,” Sanchez said.

Still, “hotels are in pretty darn good shape overall,” said Carl Winston, a professor and director of the hospitality and tourism management program at San Diego State.

Hotel businesses can — and do — pass along added costs to customers, by upping their prices, Winston said. Hotel room rates have gone up dramatically, far exceeding inflation, because it’s the “only thing they can grow.”

“If hotels have a cost increase, they can pass it along to the consumer tomorrow,” Winston said. Hotels change their prices every damn day.”

He said the wage increases built into the new labor agreements are far less of an issue for most major hotels than the debt many of them have taken on, primarily from mortgages with unfavorable interest rates, construction loans and commitments to investors.

“There’s a sense of resignation when it comes to organized labor. It’s almost like, ‘OK, we don’t want them, but they aren’t our biggest threat,’” Winston said. “If you go to hotel boardrooms today, they aren’t talking about wages as an existential threat, it’s the cost of debt they are talking about.”

The lodging industry typically evaluates its health based on two main metrics: occupancy rates and average daily rates.

After rising steeply the last few years, hotel prices in the U.S. this year have remained mostly flat compared with the same time last year, according to data released in April by online booking site Hopper. Higher prices allow businesses to draw in more revenue, but also run the risk of driving away customers.

The median nightly rate for hotels in California this year is $206, a 6% decrease in cost compared with last year’s median of $220, according to data from Kayak. In June, the state’s average daily rate was $192.16, down 0.7% year over year, according to Visit California.

An apparent spike in prices for hotel rooms, Airbnb and other short-term options may show up for California visitors in the coming months, due to a new California law aimed at bringing transparency to resort fees, service fees and hidden prices that jack up a consumer’s bill.

Under the law, businesses must include mandatory fees in their initial advertised prices. Lynn Mohrfeld, president and chief executive of the California Hotel and Lodging Assn., said the group supported the legislation in Sacramento because it should bring “a level playing field” between hotels and the vacation rentals.

“If everybody does it the same way, it makes it a better buying experience for the consumer,” she told The Times earlier this year.

Dealing with the hard numbers of pricing and occupancy rates are a welcome return to normal for hotel owners after the upheaval of the strike.

Unite Here deployed a combination of disruptive tactics — noisy picketing in the early morning, surprise work stoppages, marches through hotel lobbies — that helped put pressure on hotels, said union leaders and hotel industry experts in interviews.

“Hotels were like, ‘This is crazy,’” Bill Doak, of Westwood-based real estate investment firm Stockdale Capital Partners, said of Unite Here Local 11’s demands. Doak’s firm owns the Sandbourne, a Santa Monica hotel that reached a tentative agreement with the union last November. “It was the union’s tactic to make sure hotel owners felt the pain,” Doak said.

Hotels put together contingency staffing plans and told guests they expected to be able to serve them largely without interruption. That proved a difficult task at times.

When workers walked out during the busy Fourth of July weekend, people visiting Disneyland, the Anime Expo downtown and the L.A. leg of Taylor Swift’s Eras tour were greeted outside their hotels by picketing workers banging on drums and blowing vuvuzela horns — of which the union has purchased hundreds.

In online reviews, guests vented frustrations with both hotel management and picketing workers. “If you want to have a peaceful vacation, choose another location,” wrote a tourist who stayed at 1 Hotel West Hollywood in August.

Early on, managers at some hotels realized that the delivery of portable toilets signaled the union’s plans to carry out a work stoppage and protest in front of the property, said Kurt Petersen, Unite Here Local 11 co-president. To confuse them, the union sent toilets to hotels at random.

In January, Unite Here Local 11 organizers took stock of the dozens of hotels that had not yet agreed to new contracts and noticed about 80% were owned by private equity firms or operated by companies owned by such firms.

The union then made more concerted efforts to target companies such as Aimbridge and Blackstone with work stoppages and ramped up efforts to reach out to public pension funds invested in the private equity firms.

“Are those tactics working? Are they getting owners and managers to come to the table? I think the proof is in the results. They are winning right now,” Winston said.

Business

California gas is pricey already. The Iran war could cost you even more

Published

2 hours ago

March 2, 2026

Press Room

California gas is pricey already. The Iran war could cost you even more

The U.S. attack on Iran is expected to have an unwelcome impact on California drivers — a jump in gas prices that could be felt at the pump in a week or two.

The outbreak of war in the Middle East, which virtually closed a key Persian Gulf shipping lane, spiked the price of a barrel of Brent crude oil by as much as $10, with prices rising as high as $82.37 on Monday before settling down.

The price of the international standard dictates what motorists pay for gas globally, including in California, with every dollar increase translating to 2.5 cents at the pump, said Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business.

That would mean drivers could pay at least 20 cents more per gallon, though how much damage the conflict will do to wallets remains to be seen.

“The real issue though is the oil markets are just guessing right now at what is going to happen. It’s a time of extreme volatility,” Borenstein said. “We don’t know whether the war will widen or end quickly, and all of those things will drive the price of crude.”

President Trump has lauded the reduction of nationwide gas prices as a validation of his economic agenda despite worries about a weak job market and concerns of persistent inflation.

The upheaval in the Middle East could be more acutely felt in the state.

Californians already pay far more for gas than the rest of the country, with the average cost of a gallon of regular at $4.66, up 3 cents from a week ago and 30 cents from a month ago, according to AAA. The current nationwide average is about $3 per gallon.

The disruption in international crude markets also comes as refiners are switching to producing California’s summer-blend gas, which is less volatile during the state’s hot summers. The switch can drive up the price of a gallon of gas at least 15 cents.

The prices in California are largely driven by higher taxes and a cleaner, less polluting blend required year-round by regulators to combat pollution — and it’s long been a hot-button issue.

The politics were only exacerbated by recent refinery closures, including the Phillips 66 refinery in Wilmington in October and the idling and planned closure of the Valero refinery in Benicia, Calif., which reduced refining capacity in the state by about 18%.

California also has seen a steady reduction in its crude oil production, making it more reliant on international imports of oil and gasoline.

In 2024, only 23.3% of the crude oil refined in the state was pumped in California, with 13% from Alaska and 63% from elsewhere in the world, including about 30% from the Middle East, said Jim Stanley, a spokesperson for the Western States Petroleum Assn.

“We could see a supply crunch and real price volatility” if the Middle East supply is interrupted, he said.

The Strait of Hormuz in the Persian Gulf, through which about 20% of the world’s oil passes, was virtually closed Monday, according to reports. Though it produces only about 3% of global oil, Iran has considerable sway over energy markets because it controls the strait.

Also, in response to the U.S. attack, Iran has fired a barrage of missiles at neighboring Persian Gulf states. Saudi Arabia said it intercepted Iranian drones targeting one of its refinery complexes.

California Republicans and the California Fuels & Convenience Alliance, a trade group representing fuel marketers, gas station owners and others, have blamed Gov. Gavin Newsom’s policies for driving up the price of gas.

A landmark climate change law calls for California to become carbon neutral by 2045, and Newsom told regulators in 2021 to stop issuing fracking permits and to phase out oil extraction by 2045. He also signed a bill allowing local governments to block construction of oil and gas wells.

However, last year Newsom changed his stance and signed a bill that will allow up to 2,000 new oil wells per year through 2036 in Kern County despite legal challenges by environmental groups. The county produces about three-fourths of the state’s crude oil.

Borenstein said he didn’t expect that the new state oil production would do much to lower gas prices because it is only marginally cheaper than oil imported by ocean tankers.

Stanley said the aim of the law was to support the Kern County oil industry, which was facing pipeline closures without additional supplies to ship to state refineries.

Statewide, the industry supports more than 535,000 jobs, $166 billion in economic activity and $48 billion in local and state taxes, according to a report last year by the Los Angeles County Economic Development Corp.

Bloomberg News and the Associated Press contributed to this report.

Business

Block to cut more than 4,000 jobs amid AI disruption of the workplace

Published

14 hours ago

March 2, 2026

Press Room

Block to cut more than 4,000 jobs amid AI disruption of the workplace

Fintech company Block said Thursday that it’s cutting more than 4,000 workers or nearly half of its workforce as artificial intelligence disrupts the way people work.

The Oakland parent company of payment services Square and Cash App saw its stock surge by more than 23% in after-hours trading after making the layoff announcement.

Jack Dorsey, the co-founder and head of Block, said in a post on social media site X that the company didn’t make the decision because the company is in financial trouble.

“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,” he said.

Block is the latest tech company to announce massive cuts as employers push workers to use more AI tools to do more with fewer people. Amazon in January said it was laying off 16,000 people as part of effort to remove layers within the company.

Block has laid off workers in previous years. In 2025, Block said it planned to slash 931 jobs, or 8% of its workforce, citing performance and strategic issues but Dorsey said at the time that the company wasn’t trying to replace workers with AI.

As tech companies embrace AI tools that can code, generate text and do other tasks, worker anxiety about whether their jobs will be automated have heightened.

In his note to employees Dorsey said that he was weighing whether to make cuts gradually throughout months or years but chose to act immediately.

“Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead,” he told workers. “I’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome.”

Dorsey is also the co-founder of Twitter, which was later renamed to X after billionaire Elon Musk purchased the company in 2022.

As of December, Block had 10,205 full-time employees globally, according to the company’s annual report. The company said it plans to reduce its workforce by the end of the second quarter of fiscal year 2026.

The company’s gross profit in 2025 reached more than $10 billion, up 17% compared to the previous year.

Dorsey said he plans to address employees in a live video session and noted that their emails and Slack will remain open until Thursday evening so they can say goodbye to colleagues.

“I know doing it this way might feel awkward,” he said. “I’d rather it feel awkward and human than efficient and cold.”

Business

WGA cancels Los Angeles awards show amid labor strike

Published

1 day ago

March 1, 2026

Press Room

WGA cancels Los Angeles awards show amid labor strike

The Writers Guild of America West has canceled its awards ceremony scheduled to take place March 8 as its staff union members continue to strike, demanding higher pay and protections against artificial intelligence.

In a letter sent to members on Sunday, WGA West’s board of directors, including President Michele Mulroney, wrote, “The non-supervisory staff of the WGAW are currently on strike and the Guild would not ask our members or guests to cross a picket line to attend the awards show. The WGAW staff have a right to strike and our exceptional nominees and honorees deserve an uncomplicated celebration of their achievements.”

The New York ceremony, scheduled on the same day, is expected go forward while an alternative celebration for Los Angeles-based nominees will take place at a later date, according to the letter.

Comedian and actor Atsuko Okatsuka was set to host the L.A. show, while filmmaker James Cameron was to receive the WGA West Laurel Award.

WGA union staffers have been striking outside the guild’s Los Angeles headquarters on Fairfax Avenue since Feb. 17. The union alleged that management did not intend to reach an agreement on the pending contract. Further, it claimed that guild management had “surveilled workers for union activity, terminated union supporters, and engaged in bad faith surface bargaining.”

On Tuesday, the labor organization said that management had raised the specter of canceling the ceremony during a call about contraction negotiations.

“Make no mistake: this is an attempt by WGAW management to drive a wedge between WGSU and WGA membership when we should be building unity ahead of MBA [Minimum Basic Agreement] negotiations with the AMPTP [Alliance of Motion Picture and Television Producers],” wrote the staff union. “We urge Guild management to end this strike now,” the union wrote on Instagram.

The union, made up of more than 100 employees who work in areas including legal, communications and residuals, was formed last spring and first authorized a strike in January with 82% of its members. Contract negotiations, which began in September, have focused on the use of artificial intelligence, pay raises and “basic protections” including grievance procedures.

The WGA has said that it offered “comprehensive proposals with numerous union protections and improvements to compensation and benefits.”

The ceremony’s cancellation, coming just weeks before the Academy Awards, casts a shadow over the upcoming contraction negotiations between the WGA and the Alliance of Motion Picture and Television Producers, which represents the studios and streamers.

In 2023, the WGA went on a strike lasting 148 days, the second-longest strike in the union’s history.

Times staff writer Cerys Davies contributed to this report.