NEW YORK, Nov 8 – Unions representing Las Vegas hospitality workers said they reached a “historic” tentative agreement with Caesars Entertainment on Wednesday for a new contract covering 10,000 workers, two days before a strike threatened to shut down the Strip.
The negotiations come as unions across the industry press employers for better pay and benefits, buoyed by a labour shortage. Casino resort operators have been reaping record profits from a steady post-pandemic recovery in Las Vegas tourism.
The Culinary Workers and Bartenders Unions said the tentative five-year contract was “historic in nature” given the wage increases in the first year and the funds allocated for health care and pensions, according to Ted Pappageorge, secretary-treasurer of the Culinary Union.
Caesars Entertainment (CZR.O), the second-largest Las Vegas casino operator by employees, said the deal provided “meaningful wage increases” and was in line with plans to bring more union jobs to the Strip.
The Las Vegas unions, considered among the most powerful in the United States, said it had also reduced the workload for housekeepers for the first time in 30 years and negotiated language to be able to campaign and support non-union workers on the Strip.
“As a package, we think this is the best contract we’ve ever had,” Pappageorge told reporters on a conference call.
According to data from the Las Vegas Convention and Visitors Authority, visits to the city were down 4% in September compared to the same period in 2019. But room rates are up more than 47%.
The city is gearing up for events including this month’s Formula 1 Las Vegas Grand Prix, which is expected to draw thousands of tourists.
“Companies that can’t afford a strike shutdown will be under the most pressure to make big concessions,” said Erik Gordon, a business professor at the University of Michigan.
“It’s taken a little too long in my opinion,” said Daniel Busby, 33, a fry cook at the Paris Las Vegas Hotel and Casino, operated by Caesars, before the deal was reached. “We’re just asking to live a little more comfortably.”
The unions have been in talks with the casinos for about seven months, and 95% of their members voted to authorise a citywide strike at the end of September.
Talks with casino operators MGM Resorts International (MGM.N) and Wynn Resorts (WYNN.O) have yet to produce an agreement ahead of Friday’s strike deadline.
A strike at MGM and Wynn would affect nine casino resorts and 25,000 workers, the majority of whom are employed by MGM.
MGM said it expects to reach an agreement with the unions on Wednesday and the deal will result in the largest wage increase in the history of its contracts with the unions, MGM Chief Executive Officer William Hornbuckle told investors on an earnings call.
Wynn said the next bargaining session with the unions is scheduled for Thursday.
MGM has said that each 1% wage increase equates to about $10 million in additional labour costs, according to Truist analyst Barry Jonas.
Jonas estimated the wage increases could add $40 million to $60 million in annual costs for Caesars and double that amount for MGM, based on their employee numbers.
The Culinary and Bartenders unions represent about 53,000 workers in Vegas.
Shares in Caesars and MGM rose 1%, while Wynn Resorts fell 0.3%.
