The New York Hilton and Grand Hyatt New York are both re-opening, the former on October 4 and the latter November 1.
While there was a logic in providing services to travelers during the summer, preparing to do so as a hotel heads into Northeast winter – traditionally a down time for business to begin with – may seem odd. And indeed the decision to do so now has nothing to do with anticipated return of business travel. Instead, there’s a simple reason to re-open – and to do so no later than November 1.
The news comes just days after the City Council passed a bill requiring hotels that either closed or laid off 75 percent of their staff during the pandemic to provide $500 per week in severance pay to service employees for up to 30 weeks.
Hotels can exempt themselves from the mandate by recalling at least 25 percent of workers by Oct. 11 and reopening by Nov. 1.
The Hilton faced expenses under this law of up to $16.5 million and will recall 30% of its workforce to avoid the outcome. The Grand Hyatt will bring back the minimum 25% of its workforce even though it’s slated to be torn down.
Grand Hyatt New York
The new city law is a way for unions to extract funds from hotel owners, whether the hotels are open or not. Even if the hotels operate at a loss, they expect to lose less by opening than by complying with this new law. However owners can take solace in the fact that the City Council will protect them from future competition so future monopoly profits should more than make up for this expense.
Maybe the hotels can make up the losses in destination fees?