Las Vegas' culinary workers union and bartenders union are currently in talks with industry leaders MGM Resorts (NYSE:MGM) International, Caesars (NASDAQ:CZR) Entertainment, and Wynn Resorts (NASDAQ:WYNN), aiming to secure a new five-year contract. The negotiations, which propose the largest wage increases ever, reduced workload and room quotas for housekeepers, and improved safety protections, could potentially lead to a citywide strike if the demands of the hospitality workers are not met.
The previous five-year contract ended in May 2023, and the ongoing discussions also include key issues such as healthcare cost reduction, safeguards against tech-related job losses, and granting strike rights to non-union employees.
MGM and Caesars employ about 22,000 and 10,000 union workers respectively. Despite these resorts reporting record profits and demonstrating strong post-pandemic recovery, Secretary-Treasurer of the Culinary Union, Ted Pappageorge expressed that workers haven't reaped any benefits yet. He warned of potential strikes post-Tuesday if substantial progress is not made in the negotiations.
These contract negotiations come at a time when Las Vegas is navigating its post-pandemic recovery. In August 2023, there was a 7% visitor decrease compared to pre-pandemic levels, while room rates increased by 31% to $158.47. Truist equity analyst Barry Jonas estimates a $40 to $60 million annual financial effect due to the proposed wage increases.
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