Union workers strike at the Palace Hotel

SAN FRANCISCO (KGO) -- Just hours after both sides in the hotel labor dispute met with San Francisco's mayor, workers walked off the job at another hotel in the city. It is the second hotel walkout in less than a week. Can the hotels meet union demands during this tough economic time?

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Even the experts have different views on the state of the hotel industry. The union said the deal could be sealed for the 350 workers at the Palace Hotel for $275,000 and that includes wages and benefits.

But the hotel said they are being crippled by rising healthcare costs and the economic recession.

These limited strikes, hotel by hotel, are a strategy to put pressure on hotel management. The key issue here is the same driving most labor disputes these days.

"We're going to fight to make sure they continue to pay our health care. These guys are using the economy as an excuse to roll back things we've fought generations to achieve," said Union President Mike Casey.

Historically, San Francisco has been one of the strongest hotel markets in the country, but according to PKF, an industry consulting firm, the recession is having an impact.

PKF is not taking sides in the strike, they are simply sharing their economic analysis.

"Beginning in 2009 the industry has really taken a significant downturn due to record high unemployment levels. In 2009 we're forecasting declines in the industry in the top line room's revenue in excess of 20 percent," said Miky Kuo from PKF Consulting.

But the chair of UC Berkeley's Institute for Research on Labor and Employment, says even after 9/11 when tourism plummeted, the nation's hotel industry made a profit.

In fact, Ken Jacobs says the last time they did not show a profit was back in 1991. He believes they can afford to pay what the union is asking.

"The Starwood Hotel, the owner of the Hotel Struck, has shown a $180 million in profits so far this year, even in the depths of the recession," he said.

"That's not a lot of money when you're looking at over 1,000 properties worldwide -- do the math on that. Divide that up by 1,000 or 1,100 properties worldwide, and that's money they made, but they're not making in San Francisco," said Starwood Hotels negotiator Richard Curiale.

The next bargaining session is scheduled for Thursday and that's at the Grand Hyatt, the hotel that was on strike last week. The workers at the Palace are scheduled to go back to work on Friday, three days after 24-hour round the clock picketing.

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