Home News Las Vegas Casino Business Suffers Because of the Hospitality Workers Strike

Las Vegas Casino Business Suffers Because of the Hospitality Workers Strike

By Manny Wood.
Fact checked by Wilbur Thompson.

Approximately 53,000 Las Vegas hospitality workers are currently engaged in crucial labor negotiations with hotel and casino operators, following the authorization of a city-wide strike by union members at the end of September.

The culinary workers union and bartenders union, which represent employees at various properties across the city, including those operated by MGM Resorts International (MGM.N), Caesars Entertainment (CZR.O), and Wynn Resorts (WYNN.O), are striving to secure a new five-year contract aimed at enhancing wages and benefits. This move comes as Las Vegas tourism rebounds from the pandemic-induced decline in visitor numbers.

The history of the culinary workers union and bartenders union has been deeply intertwined with the evolution of labor rights in the United States. These unions have a rich history of advocating for better working conditions and fair compensation for their members.

Culinary Workers Union was and has been at the forefront of labor activism in Las Vegas for decades. It has played a pivotal role in representing and protecting the rights of workers in the hospitality industry, including those in restaurants, hotels, and casinos. Over the years, it has successfully negotiated contracts that have improved wages, job security, and healthcare benefits for its members. The union has a strong reputation for its ability to mobilize workers and its commitment to social justice causes.

Bartenders Union has a similarly robust history. It was established in 1933 and has been a key player in securing fair wages and working conditions for bartenders and beverage servers in Las Vegas. This union has fought for equitable treatment of its members, ensuring that they receive competitive compensation and protection from workplace hazards. The Bartenders Union has a tradition of standing in solidarity with other labor organizations to advocate for the rights of all workers in the hospitality industry.

Both unions have made significant contributions to the labor movement in Las Vegas, helping workers achieve better standards of living and job security.

Las Vegas’ unions are among the most influential in the United States, covering a diverse range of workers, including those who serve tables, clean hotel rooms, and prepare food. Their demands mirror similar labor activity in other industries where employees are seeking improved compensation to match the rising cost of living.

“The companies have an opportunity to do the right thing and step up to get a contract done, but if not, there could be a strike at any time after that,” warned Ted Pappageorge, Secretary-Treasurer for the culinary union. “Any time after October 6th, there could be a strike,” he emphasized.

In August 2023, over 3.3 million people visited Las Vegas, a 7% decrease from pre-pandemic levels in 2019, according to data from the Las Vegas Convention and Visitors Authority. Average room rates in August saw a 31% increase from the same period in 2019, reaching $158.47.

The unions initiated negotiations with MGM Resorts on Tuesday and are scheduled to meet with Caesars on Wednesday and Wynn on Friday. Pappageorge revealed that the unions have proposed the most substantial wage increases in their history, alongside reduced workloads and room quotas for housekeepers, improved safety protections for workers, and other demands.

“We will continue to work with Local 226 and Local 165 to reach an agreement that provides our employees with competitive wages and benefits,” stated a spokesperson for Wynn Resorts.

MGM and Caesars have not immediately responded to requests for comments.

The previous five-year union contract with MGM, Caesars, Wynn, and smaller operators expired in May 2023, with an extension until September 15, according to the union. On September 26, approximately 95% of hospitality workers voted to authorize a strike across 22 properties on the Las Vegas Strip.

As of now, the unions have not set a specific strike deadline. In recent years, the culinary and bartender unions, along with casino and hotel companies, have managed to avert strikes.

Truist equity analyst Barry Jonas noted, “Casino operators have indicated in our meetings that the negotiation process is progressing as expected, with hopes of reaching an agreement in October.”

Jonas estimated that every 1% increase in wages could translate to approximately $10 million in additional wage costs for MGM. For Caesars, this could result in an annual financial impact of $40 to $60 million, while MGM could potentially see double that amount.

MGM employs approximately 22,000 workers represented by the unions, whereas Caesars employs around 10,000, according to the analyst’s note.