By Doyinsola Oladipo
NEW YORK (Reuters) -Unions representing roughly 53,000 Las Vegas workers on Tuesday kicked off critical negotiating sessions with hotel and casino operators after its members voted at the end of September to authorize a city-wide strike.
The culinary workers union and bartenders union represent workers at properties around the city, including those operated by MGM Resorts (NYSE:MGM) International, Caesars (NASDAQ:CZR) Entertainment, and Wynn Resorts (NASDAQ:WYNN). Workers are negotiating for a new five-year contract to boost wages and benefits as tourism in Las Vegas recovers from depressed visitor levels during the pandemic.
The Las Vegas unions are among the most powerful in the United States, covering workers who wait tables, clean hotel rooms and prepare food. Their demands mirror similar activity in the shipping, rail and auto industries where employees have sought better compensation due to the higher cost of living as unemployment stays low.
"The companies have an opportunity to do the right thing and step up and get a contract done, but if not, there could be a strike any time after that," said Ted Pappageorge, Secretary-Treasurer for the culinary union. "Any time after October 6th, there could be a strike," he said.
Over 3.3 million people visited Las Vegas in August 2023, a 7% decrease from levels during the same period in 2019 before the pandemic, according to data from the Las Vegas Convention and Visitors Authority. Average room rates were $158.47 in August, a 31% increase from the same period in 2019.
The unions met with MGM Resorts on Tuesday and are scheduled to meet Caesars on Wednesday and Wynn on Friday. Pappageorge said the unions have proposed the largest wage increases ever negotiated in their history, reduced workload and room quotas for housekeepers, better safety protections for workers, among others.
He said the unions have been in talks since April and have made little progress.
"We will continue to work with Local 226 and Local 165 to reach an agreement that provides our employees with competitive wages and benefits," said a Wynn Resorts spokesperson.
MGM and Caesars did not immediately respond to requests for comments.
The five-year union contract with MGM, Caesars, Wynn and smaller operators ended in May 2023, with an extension to Sept. 15, according to the union. About 95% of hospitality workers voted on Sept. 26 to authorize a strike across 22 properties on the Las Vegas Strip.
The unions have not yet set a strike deadline, according to a spokesperson. In recent years, the culinary and bartender unions and the casino and hotel companies have managed to avoid a strike.
The casino operators "stated in our meetings that negotiation processes are about where they thought they’d be at this time with expectations to reach an agreement in October," Truist equity analyst Barry Jonas said in a note.
MGM said that every 1% increase in wages will equal approximately $10 million of additional wage costs, according to Jonas. He estimated that wage increases could translate to a $40 to $60 million annual financial effect on Caesars and double that amount for MGM.
MGM employs about 22,000 workers represented by the unions while Caesars employs 10,000, according to the note.