The two largest resort operators in Las Vegas would lose more than $10 million a day combined if housekeepers, cooks and others go on strike, a possibility starting Friday, the union representing thousands of casino workers said.
Continue Reading Below
The Culinary Union detailed how it thinks a one-month strike would impact MGM Resorts International and Caesars Entertainment, which operate more than half the properties that would be affected if 50,000 workers walk off the job. Workers last week voted to authorize a strike as disputes over workplace training, wages and other issues have kept the union and casino operators from agreeing on new contracts.
The union conceded that it is difficult to estimate how the strike at more than 30 casino-hotels would affect Las Vegas overall because the last citywide strike took place in 1984, when the city had 90,000 fewer hotel rooms and only about 12.8 million annual visitors. Last year, more than 42.2 million people visited.
But it says MGM and Caesars would see a 10 percent reduction in revenue because of the loss of group and independent travelers. A strike also could happen as fans head to Las Vegas for the Stanley Cup Final.
“Furthermore, one might assume a 10 percent worsening of operating margins due to the use of less experienced and less skilled replacements … to keep the doors open, rooms cleaned, food cooked, and cocktails served, not to mention other factors such as the disruptions to management staff’s regular work,” the union wrote.
Using the companies’ earnings reports for the first three months of the year, the union’s estimates show a one-month strike could reduce MGM’s earnings before interest, taxes and other items by more than $206 million and Caesars’ by over $113 million.
Contracts expire at midnight Thursday for bartenders, housekeepers, cocktail and food servers, porters, bellmen, cooks and other kitchen workers at properties on the Las Vegas Strip and downtown Las Vegas, including Caesars Palace, Bellagio, Stratosphere, Treasure Island, The D and El Cortez.
Dealers are not part of the Culinary Union. Casino-resorts that would not be affected by the strike include Wynn Las Vegas, Encore, The Venetian and Palazzo.
Analysts with Deutsche Bank put the likelihood of a citywide strike “as low” and said negotiations could continue past Thursday.
“Recall, in 2013, the Culinary Union remained in negotiations with some Strip operators for several months post the June 2013 contract expiration, ultimately agreeing to a new deal in November 2013,” they wrote in a research note Wednesday. “Business during this time was uninterrupted, and we would note that media/press releases from that period struck a similar tone to what we are seeing today.”
MGM, which employees 24,000 of the workers, said it met with union negotiators Monday and has more talks scheduled this week. The company says it remains confident that it “can resolve the outstanding contract issues and come to an agreement that works for all sides.”
Caesars said it “expects to agree to a new 5-year contract with the Culinary Union on or about June 1 when the current contract expires.” About 12,000 of its workers are part of the negotiations for new five-year contracts.
The union said it is asking for training on new skills and job opportunities as the companies adopt technology that can displace workers. It also wants an independent study to analyze the workload of housekeepers and contract language that would protect workers if properties are sold.
“What is going to happen to my position?” said Fernando Fernandez, a guest runner at Caesars Palace. “I think they are going to be disappearing it, because robots are going to be available to deliver everything.”
He said he wants training to fix or program the robots that he believes could eventually replace him.
The union says it has asked MGM for average annual wage increases of 4 percent for each of the five years. A document says the company has countered with an approximate 2.7 percent increase.
Caesars workers are asking for an increase of 4.2 percent effective Friday, and annual increases of about 4 percent thereafter. Another document shows the company has offered an approximate 2.8 percent increase for each of the five years.
The average hourly wage of union workers is $23, including benefits such as premium-free health care, a pension and a 401(k) retirement savings plan and $25,000 down-payment assistance for first-time homebuyers.
Follow Regina Garcia Cano on Twitter at https://twitter.com/reginagarciakNO