With Events in 21 Cities, UNITE HERE Calls on leaders in D.C. to Close Hotel Owners’ Tax Loophole, End Job Cuts

Boston, MA — 100 hotel workers and members of the hospitality workers’ union, UNITE HERE Local 26, along with workers in 21 cities across the U.S., organized a National Day of Action on Thursday to shine a light on the “shadow boss” hotel owners they say are driving cuts to jobs and services in the hospitality industry. Workers will rally outside the IRS building in Government center and will be joined by State Senator Lydia Edwards and Boston City Councilor Ed Flynn.

Hospitality workers’ union UNITE HERE is calling on major hotel owners called REITs (Real Estate Investment Trusts) to stop pushing for job cuts and are asking leaders in D.C. to close the tax loophole that enables REITs to avoid paying taxes on billions paid to investors. In Boston, many major hotels are owned by REITs including the Hilton Logan (Park Hotels & Resorts), the Sheraton (Host Hotels & Resorts), and the Park Plaza (Sunstone Hotel Investors). As part of the actions workers will hold signs that rename hotel REITs as the hotel industry’s “Real Estate Income Tax Scandal.”

Eighteen publicly traded hotel REITs paid $3.4 billion in dividends in 2019. REITs do not pay income taxes on these billions because they claim not to operate or manage the hotels they own. But earnings calls reveal the role that REIT executives play in the operations of hotels they own. A core service cut driven by REITs is the elimination of daily room cleaning and sanitation as an industry-standard, which UNITE HERE estimates would impact 180,000 housekeeping jobs primarily held by women of color across the U.S. hotel industry. Read our report, “Playing Dirty,” to learn more.

In November of 2021, Park Hotels & Resorts Inc listed operating priorities which include “permanent reduction of full-time, hotel-level staffing” including “contactless check-in/room service,” “limit housekeeping,” and “eliminate or re-purpose unprofitable F&B operations.”

“We do think that given the crisis, and you don’t want to let any crisis go to waste, we have been working hard and working with our operating partners and also talking with the union about opportunities to rightsize that [operating] model,” said Park CEO Thomas Baltimore in a 4th quarter 2020 earnings call. That same year as hotel workers faced unemployment and cuts to their jobs, Park TRIPLED Baltimore’s pay.

Sebastian Morales, a doorman who has worked at the Park-owned Hilton Logan in Boston for 15 years, says that REITs owners seek to maximize profits by taking away jobs and services. “When these companies cut costs, it means they are cutting jobs and conditioning the guests to expect less. At the Hilton Logan, they have removed overnight room service and the buffet. What the owners don’t understand is that human workers are their most valuable asset. I’ve had so many guests say that they can stay at any hotel, but the reason they come back here is because of employees. We are the ones who take care of the guests and make their stay a good experience.”

Susana Coelho, a front-desk operator who has worked at the Hilton Logan for almost 19 years, says that in the past year, she has seen a reduction in the number of available shifts and cutbacks on guest services. Coelho used to love her job, but now, she says, “Park doesn’t care about the employees; they only care about the shareholders. So many of us have devoted our lives to this hotel—we come in to work during blizzards and bend over backwards to do our jobs well. Guests come back because of employees. But the owners don’t see our value. As long as they have food on their tables, we don’t matter. It’s heartbreaking.”

Carlos Aramayo, President of UNITE HERE Local 26, says: “REIT owners are operating behind the scenes to line their shareholders’ pockets on the backs of skilled and dedicated workers. Their hotels are taking away good jobs from the real people who make the hotels run. Reducing services also hurts customers, because hotel guests expect in-room dining and daily room cleaning.”

Contact: TiffanyTen Eyck, [email protected], 313-515-1807
Lynette Ng, [email protected], 413-275-8195

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UNITE HERE Local 26 represents workers in the hospitality industries of Massachusetts and Rhode Island. Our members work in Boston and Providence’s best hotels, restaurants, and university dining halls in addition to the Boston Convention Centers, Fenway Park, and Logan International Airport. We clean hotel rooms, greet guests, and prepare and serve food for hundreds of thousands of travelers to Boston and the northeast. UNITE HERE is the hospitality workers’ union in the U.S. and Canada, representing over 300,000 workers in hotels, gaming, restaurants and food service, airports, and more. Ninety-eight percent of its members were laid off at the start of the COVID-19 pandemic, and sixty percent remain out of work today.