LOS ANGELES -- The fate of many immigrant hotel workers was a big topic of
conversation at the Americas Lodging Investment Summit (ALIS) here.
Hotel operators, investors and analysts feared that
potential deportation of hundreds of thousands of undocumented immigrants would
drive up labor costs and reduce profit.
While the mood among the approximately 3,000 attendees at
the conference was generally optimistic because of the good economy and President
Trump's corporate tax cut, the fate of the expiring Deferred Action for
Childhood Arrivals (DACA) program was worrisome.
Wyndham Hotel Group CEO Geoff Ballotti called it the hotel
industry's top issue.
"Labor's always been our No. 1 issue. It becomes all
the more important right now. I think everyone in the industry wants to see
that resolved and resolved quickly," said Ballotti, who is the vice chair
of the American Hotel & Lodging Association, the U.S. hotel industry's
Alex Tisch, Loews Hotels & Co.'s executive vice president of commercial and
business development, said, "I'd like to see it play out where it comes to a
reasonable solution for a lot of good employees."
The potential impact of DACA's expiration may be particularly
acute for the hospitality industry.
The hospitality, retail and construction sectors accounted
for almost half of the 1.3 million immigrants that were eligible for DACA
status when President Donald Trump said he was dismantling the program last
September, the Washington Post reported last September, citing a study that national
business coalition New American Economy performed for the newspaper.
Aimbridge Hospitality CEO Dave Johnson said hotels "need more employees to clean rooms and work the
"It's getting tough," he said. "We need some kind of
immigration reform. We need those employees."
Speaking on a panel at ALIS, Susquehanna Financial Group senior lodging
analyst Rachael Rothman estimated that labor accounts for as much as 35% of
full-service hotel costs. And those costs stand to increase if more immigrant workers
are deported, especially if the U.S. unemployment rate remains low. It was 4.1%
last month, when California, Hawaii and Mississippi had their lowest
unemployment rates in more than 40 years.
"We have a country that's not so open to immigration,"
said ALIS panelist Michael Barnello, CEO of LaSalle Hotel Properties. "With this level of unemployment,
the people who don't have jobs don't want jobs."
DACA launched under the Obama administration in 2012.
Marriott International, the world's largest hotel operator, immediately pledged
its support for the program, saying at the time that it would "remain
committed to working with Congress on broad immigration reform efforts and call
on members to urgently pass the DREAM Act or other legislation to provide the
certainty and permanent solution that DACA individuals deserve to remain
valuable contributors to our society and economy."
While declining to comment specifically about the debate
over DACA, Tisch said he would "like to see the historical norm remaining
Ballotti also declined to elaborate on the pros and cons of
DACA. He did say he was "optimistic" that the Trump administration
would resolve the issue shortly.