Phil Stamm

For Hyatt, a difficult decision in trying times

By Phil Stamm
December 25, 2009

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I’VE BUILT my career in the hospitality industry, spending more than 25 years with Hyatt Hotels, more than six in Boston. It’s a cyclical business, like many, but the current downturn is the worst storm we’ve ever had to weather.

Business travel is way down, cutting demand for hotel rooms as well as meetings and conventions. Leisure travel is also in the doldrums, as more and more people opt for “staycations.’’ When people forgo trips, the revenue lost to the destination probably doesn’t cross their minds. But those numbers add up. After awhile, they add up to lost jobs.

That’s what happened at the Hyatt Hotels in Greater Boston. The number of visitors to Boston plummeted, as did revenue at our hotels. We had to make tough decisions to keep our business afloat and preserve as many jobs as possible. Early steps included management reductions and every cost-cutting tactic we could muster. In August, we made a difficult decision we had hoped to avoid, laying off 98 housekeepers and hiring an outside company to manage this work.

This was an extremely difficult decision for me, as I had worked with some of these housekeepers for several years and valued their contributions to the hotel. The tough economy has made for many unpleasant situations. I regret that we did not do a better job with transition support for employees as well as our communications with them. We have acknowledged that our initial steps fell short and were not consistent with our culture of respect. For that, we have publicly apologized.

Even if we could go back and make these tough changes in a different way, though, we still would have had to have made them. Like many companies and organizations struggling through hard times, we have not been able to avoid making tough decisions in response to revenue declines.

However, we have been able to extend a meaningful helping hand to our former colleagues.

At a time when the unemployment rate for Massachusetts came in at 8.9 percent, Hyatt took extraordinary steps to provide support to our former associates. All were offered full-time positions in Boston by United Service Companies, a national hotel staffing organization. We have also guaranteed that they will receive their Hyatt rate of pay in these positions through the end of 2010. As an alternative, our former associates can opt for a job preparedness and placement assistance program.

In addition, each housekeeper received severance pay and an automatic extension of health care coverage - for which we are paying all the costs - through March 31, 2010. Housekeepers who accept the positions they have been offered with United Service Companies will then be eligible for health care coverage through that company.

It has surprised and saddened me that only about a half-dozen of our former housekeepers have accepted these jobs. The union, Unite Here Local # 26, is advising them to reject the new employment opportunities we have arranged for them. They have held demonstrations at our properties and put pressure on guests and corporate customers to cancel hotel reservations. They recently even encourage a rally of fifth-graders - who clearly had not been told about the full-time jobs with benefits Hyatt has arranged.

Attacks on our business will not bring back the lost jobs. In fact, these actions ultimately hurt our current hotel employees and jeopardize important tax revenues that Hyatt provides to the city and state. Regrettably, the union is placing its own local and national agendas ahead of the best interests of our community, as well as our past and present employees and their families.

Phil Stamm is general manager of the Hyatt Regency Boston.

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