As the ballot measure forcing pay and benefit requirements on Long Beach's largest hotels takes effect today, several hotels are considering increasing room rates and amenity costs, while at least two others have reduced their number of rooms, possibly avoiding the ordinance altogether.
Randy Gordon, president and CEO of the Long Beach Area Chamber of Commerce, said that in a meeting last week hotel general managers discussed increasing room rates to cover the added cost Measure N will create.
"This is terrible, it's absolutely terrible, and we have said from the beginning that this would kill jobs, and that is exactly what it has done," Gordon said. "There will be court battles; room rates and food cost will go up. Hotels are a business, they need to make money, and this measure was a travesty."
Measure N requires a minimum wage of $13 per hour for workers at hotels of 100 rooms or more. California's minimum wage is $8.
Passing with 64.3 percent of the vote, according to the Los Angeles County Registrar-Recorder, the so-called living wage initiative also imposes a mandatory 2 percent annual increase in pay regardless of job performance or economic climate, five paid sick days per year and assures that workers receive 100 percent of guest services charges, such as mandatory gratuities attached to room service.
Another provision would drop wage mandates if hotels agreed to enter into collective bargaining with employees. Some
Of Long Beach's nearly 50 hotels, the ordinance will only affect 16, not including one that recently reduced its available rooms to drop below the 100 mark.
Hotel Current, 5325 E. Pacific Coast Highway, has downsized from 143 rooms to 99 rooms, according to hotel management, though they said the change had already been planned before Measure N's passage.
Another hotel, the Best Western Golden Sails, 6285 E. Pacific Coast Highway, told its employees in a Dec. 10 memo, which was obtained by the Press-Telegram, that it was reducing its rooms, but didn't confirm by how many. The labor group Unite Here Local 11, which was one of the supporters of Measure N, said they were told the reduction would drop the hotel from 174 rooms to 99 in order to avoid Measure N regulations.
In the process, the hotel laid off five employees last week, Unite Here said.
A representative of the hotel didn't return phone calls seeking comment.
Asked if these changes were a direct result of Measure N, Gordon said, "without a doubt, yes."
"More hotels are sure to follow suit," he said.
Gordon said the Best Western Golden Sails is the "first known hotel to take a drastic measure to counterbalance the very negative impact that we all knew Measure N would have on the hotel industry."
"We warned from the beginning it would kill jobs, not create jobs," Gordon said.
Supporters of Measure N also have expressed concern since the election, most recently at a Long Beach City Council meeting, that hoteliers are searching for ways around the law's provisions.
At Hotel Current, general manager Sheri Blackwood said plans to cut 44 standard rooms and go with 99 "lifestyle" rooms have been in the works for two years.
"We renovated 99 lifestyle rooms two years ago and have always wanted to use the back building, which housed the 44 standard rooms, for other uses," she said. "We needed to change this space to meet the needs and wants of our guests; we have no breakfast room or workout facility."
Blackwood said the change went into effect Dec. 1, but that the hotel stopped selling contracts for the 44 standard rooms one year ago.
"I think common sense would tell you that hotels are going to downsize to 99 rooms," Gordon said. "More hotels will follow suit, it is only a matter of time, and this was expected."
Of course, that may not be feasible for the largest hotels, such as the downtown Hyatt Regency Long Beach, which has 528 rooms.
Stephen Dagostino, general manager for the hotel at 200 S. Pine Avenue, said the hotel isn't taking any action yet to counter the employee pay increases and other new benefits.
"We haven't made any decisions regarding raising room rates to combat some of the cost of the ordinance at this time," Dagostino said.
Although City Council members have discussed how to ensure hotels comply with Measure N, City Attorney Robert Shannon has said the language of the law provides little in the way of compliance oversight.
"This particular ordinance gives no law enforcement authority to the city," Shannon said.
Hotel workers could file a class action lawsuit if they don't receive the wage increase, and the council could later take legislative action to ensure compliance, Shannon said.
But, ultimately, ensuring that hotels follow the spirit of the measure largely requires the vigilance of workers.
"It's one thing to pass the law, but it needs to be enforced," Leigh Shelton, spokeswoman for Unite Here said. "This will be something to continue to keep our eyes on to hold not only the hotels accountable, but the city accountable for making sure workers get the wage that the residents of Long Beach voted for."