CINDY ELLEN RUSSELL / CRUSSELL@STARBULLETIN.COM Workers from Ala Moana Hotel and Waikiki hotels marched at Outrigger Enterprises Group's Waikiki Beach Walk yesterday to bring attention to union contract negotiations.

Ala Moana Hotel workers rally

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The union representing workers at the Ala Moana Hotel is seeking to turn up pressure on management at the property, where contracts for nearly 300 employees expired in May 2006.

Unite Here! Local 5 rallied yesterday at Outrigger Enterprises Group's Waikiki Beach Walk project, to try to persuade its affiliate and Ala Moana Hotel manager, ALM Management Services LLC, to agree to a contract similar to what major Waikiki hotel chains signed last year.

However, ALM, which has been in contract negotiations with the union since taking over the property in March, said wage increases would mean raising prices at the 1,154-room property, which ALM says can't command the rates of hotels in nearby Waikiki.

The so-called condotel is significantly different from a traditional hotel because about half of room revenue is split with 1,050 individual condominium owners, who have placed their units in the hotel management pool. ALM said raising management fees for the condo owners to allow for employee wage increases isn't an option.

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The hotel workers' union is trying to turn up the heat on management at the Ala Moana Hotel, whose employees have gone without a contract since May 2006.

Unite Here! Local 5, which represents nearly 300 workers at the so-called condotel, staged a rally yesterday at Outrigger Enterprises Group's Waikiki Beach Walk project, to try to pressure its affiliate, ALM Management Services LLC, to agree to a contract similar to what major Waikiki hotel chains signed last year.

ALM has been in contract negotiations with the union since taking over the property in March, after acquiring hotel operations from affiliates of Crescent Heights Inc.

The union's proposed contract includes wage hikes of $2.40 for non-tipped workers and $1.20 for tipped employees over four years. The union said it has secured a few minor tentative agreements, but none on substantive economic issues such as medical and pension benefits.

"There should be no reason why Outrigger at Ala Moana isn't able to agree to the same contract standard as the rest of Waikiki," said Cade Watanabe, Local 5 spokesman, adding that most Waikiki housekeepers, for example, earn nearly $15 per hour, while Ala Moana housekeepers make about $13.50 per hour.

Outrigger spokeswoman Nancy Daniels said the company isn't involved in contract negotiations for the affiliate property.

Meanwhile, ALM said it continues to evaluate the union's proposal, but indicated that wage hikes would mean raising room prices at the 1,154-room property, whose rates at between $175 and $249 per night are far below the larger Waikiki beachfront hotels.

Operations at the condotel -- whose 1,050 units were sold to individual owners who placed the rooms into a hotel management pool -- are significantly different from a traditional hotel, where a single owner typically retains the entire room revenue generated by the property, said Grant James, the hotel's general manager. Management fees at a traditional hotel typically range from 2 percent to 4 percent, in addition to incentive fees.

In this case, ALM splits half of the room revenue generated with the individual condo owners, who pay a set management fee for the rental program. Raising management fees to cover increases in workers' salaries and benefits isn't an option since the fees were agreed upon when owners bought their units, James said, adding that the management contract runs for at least five years.

"This hotel for the last 18 months has been under renovation," he said. "A number of owners haven't received the returns they would've expected because it was under renovation -- that's where a lot of owners wouldn't be accepting of a rate increase."