Hotel owners have filed a lawsuit, claiming the additional cost of complying with a union-driven cleaning ordinance will prevent them from opening properties in San Francisco even after other restrictions are lifted.
SAN FRANCISCO—San Francisco hotel owners and trade groups are locked in a legal battle against local authorities over an ordinance that officials and labor leaders say will set the standard in post-COVID occupant safety but that hoteliers say makes hotel operations unsustainable.
Among other mandates, the San Francisco City and County Board of Supervisors’ “Healthy Buildings Ordinance,” passed on 7 July, requires hotels to clean and disinfect all lobby surfaces, fixtures, elevators, stairwells, meeting rooms and loading docks “multiple times daily,” as well as clean each occupied guest room and bathroom every day unless the guests ask for their rooms not to be cleaned. The ordinance also directs hotels to employ gloved doormen at each exterior door that doesn’t open automatically.
“The Board of Supervisors seeks not only to reduce the spread of COVID-19 in congregate areas where workers and tourists risk exposure to contagious diseases, but also to demonstrate to visitors, residents and workers that San Francisco hotels and commercial office buildings are, and will remain, among the cleanest and safest facilities in the world,” the ordinance reads.
In response to the ordinance’s passing, hotel representatives, including the Hotel Council of San Francisco, the California Hotel & Lodging Association (CHLA) and the American Hotel & Lodging Association (AHLA), announced a lawsuit against the San Francisco Board of Supervisors on 20 July, claiming the law was driven largely by labor leaders looking to ensure work for, and dues from, their members.
Specifically, the hotel groups estimate that, in addition to the $498,000 a year it will cost a 250-room hotel to comply with Centers for Disease Control and California Department of Public Health coronavirus protocol, the ordinance will cost hoteliers $220,000 in annual labor costs. Hoteliers also argue that the ordinance puts hotel workers at greater risk because of more potential interaction with guests who may be infected.
Hotel Council of San Francisco President Kevin Carroll, on a 20 July webcast, called the ordinance “unlawful and unenforceable,” while AHLA President Chip Rogers said the ordinance “defies logic and commonsense.”
As a result, some hoteliers say that even after the city gives hotels the go-ahead to resume hosting tourists, they will keep properties closed as long as the ordinance is in place because of the higher costs associated with compliance.
Handlery Hotels’ President Jon Handlery, who has one San Francisco hotel, and Davidson Hotels & Resorts Chief Operating Officer Pete Sams, whose company has two San Francisco properties, said they don’t plan to reopen their hotels unless or until the ordinance is relaxed.
“Hospitals don’t have this type of cleaning protocol,” said CHLA President and CEO Lynn Mohrfeld. “It’s a bad deal for everybody.”
The ordinance pits local officials against owners and managers of hotels in a market was one of the hotel industry’s most lucrative in the U.S. last year. San Francisco and San Mateo hotels’ boosted revenue per available room 4.2% to $205.99 in 2019, as nightly room rates advanced 4.1% to $251.24, while occupancy was 82%, according to Hotel News Now’s parent company STR.
Those numbers have fallen steeply as a result of COVID-19 and the city’s stay-at-home order that went into effect on 16 March. San Francisco-San Mateo’s second-quarter RevPAR plunged 86.6% from a year earlier, as nightly room rates fell 56.4% to $106 and occupancy dropped to 25.9%.
Reduced revenue makes coming up with the funds to comply with the additional protocol more challenging, said Handlery, whose 377-room hotel employed about 90 people before the property was shut down in April. His family has run its Union Square property since 1948.
“I should probably change my hotel’s name from The Handlery to The Lysol,” he said. “We’re getting pounded at the worst time we could’ve ever hoped for.”
Handlery and Mohrfeld said the city’s hotel leaders weren’t consulted on the ordinance and it was union-driven, specifically by Unite Here Local 2, which represents about 9,000 hotel workers in San Francisco and San Mateo counties.
Union spokesperson Ted Waechter said that the union worked with Supervisor Aaron Peskin on the ordinance, but took issue with the hoteliers’ assertion that the ordinance made the hotel workplace more dangerous for workers, saying that hotel operators were using the pandemic’s impact as an excuse to cut labor costs.
Waechter also pointed out what he called “disastrous” hotel reopenings in other parts of the country, specifically including Las Vegas. In late June, Culinary Workers Union Local 226 and Bartenders Union Local 165, which are Nevada affiliates of Unite Here and represent 60,000 workers in Las Vegas and Reno, filed a lawsuit against hotel and casino operators over working conditions, and have estimated that 22 members or their dependents have died from COVID-19 since March.
“A particular concern is that moving to a system where housekeepers clean rooms almost exclusively after checkout is that COVID-19 particles could build up for days,” Waechter said. “Our housekeepers say they’ll feel less safe than cleaning on a routine basis.”
Waechter also downplayed the hoteliers’ claim of financial hardship, saying that the compliance costs “equates to $3.80 per room per night. The burden this puts on hotels is pretty minimal.”
The office of Supervisor Peskin, who sponsored the ordinance, didn’t respond to multiple requests for comment.
Where the ordinance leaves hotel operators heading into the fall is anyone’s guess. While San Francisco’s hotel-room demand is traditionally high in September and October because of seasonal conventions, that business may fail to materialize this year because of lingering health concerns by business travelers and companies.
“Even without the ordinance, if I based my decision [to reopen in August] on March numbers, I probably wouldn’t reopen,” Handlery said. “The ordinance makes the decision easier for me. It’s game-set-match.”