Sooner or later it was going to happen. The nationalist unions specialized in tourism in the south of Gran Canaria are beginning to finalize a different agenda when negotiating with hotel companies starting in September. Following in the wake of their US colleagues, they are asking the middlemen to step aside to negotiate salary improvements directly with the owners: that is, the funds that control a good part of the tourism business. This has happened to Blackstone in North American tourist destinations and the wave has already reached the south of Gran Canaria. The focus of private capital on reducing costs in human capital-intensive tourism has also been an objective of the revitalized labor movement because union centers not linked to Madrid are assuming a greater role in Maspalomas and Meloneras. "The boss thing It's a thing from the Regime of '78, not from us, who are far away," a nationalist union source said this Tuesday.
Blackstone, under the HIP brand, in the south of Gran Canaria owns complexes such as the former IFA Hotels (less Faro de Maspalomas), Barceló Margaritas in Playa del Inglés and those of Grupo Dunas. Apollo owns IFA Faro Maspalomas and a Bankinter del Meliá SOCIMI located in San Agustín. "We have come to the conclusion that we have overcome the transition period because Blackstone began to arrive on the island in 2018, and it has helped a lot to the Gran Canaria destination, we do not doubt that, after five years of courtesy and they must have already returned to the PreCovid19 figures, it is time to move from words to actions, we are moderate people contrary to what the mediator usually makes us see, which is logical because they are employees," said a nationalist union leader in the south of Gran Canaria .
Contrary to widespread belief, in the US investment funds involved in tourism, and in all sectors of activity, are the greatest allies of workers because their business is moving cash and if the financial machinery stops, Everyone loses, but above all the fund, which has paid for the purchase as well as rehabilitation and intends to sell after a while without labor conflicts. Future buyers don't want problems. Logic says that the day Blackstone sells its complexes in the south of Gran Canaria it will agree with another investment fund, that is, it will always be a financial business to which salary improvements are passed on.
The hotel sector is an example of this. Financial Times reported this week that hotels owned or controlled by private equity groups Blackstone, Oaktree Capital and Advent International have been the target of recent strikes. Hotel workers in California and Arizona have won significant pay increases after organizing strategic strikes, which often coincide with business conventions. The willingness of hotel workers to strike over labor concerns seems to indicate a reaction to the strategies typically employed by private equity owners.
A 2023 study found that private equity-backed hotels generated significant and lasting increases in room revenue by reducing labor costs. Generalist private equity investors tend to spend their profits from reduced labor costs on increasing sales and marketing. In other words, even as they spent less on workers, these companies made their public image a more important part of their business strategy, an approach that may also have increased their exposure to reputational risks, such as strikes.
Unions like Unite Here have found support in some of the largest pension funds in the United States, which manage the retirement savings of unionized workers. The Calpers board chair was previously vice president of California's largest public sector union. Perhaps not surprisingly, given the financial clout of these giant pension funds, their attention to these issues is forcing their external fund managers to respond. Nearly all of Calpers' private fund managers had agreed to adopt the labor principles it disseminated in the spring, Cashion and Orlich said.
In United States, Financial Times said this July, fund managers are giving unions more coverage over labor standards at their portfolio companies.. The wave of strikes, as well as recent scandals involving child and migrant labor, have highlighted the threat that worker exploitation can pose to profitability, particularly in private markets, where recent illegal labor practices They have been in the spotlight. The push for stricter labor standards comes as the American labor movement, despite historically low levels of overall union membership, is trying to recover. If it continues, greater union power could bring more strength to this fight.
