After layoffs, hotel workers wonder what’s next for hospitality industry

Local News

The Modern Honolulu laid off about 30% of its workers last week after a timeshare company bought the hotel in April 2018.

Now, tourism figures show timeshares and vacation rentals are on the rise statewide. 

Visitor statistics so far this year show an increase in visitors but a decrease in spending compared to last year. Data also shows an increase in those looking to veer away from staying at hotels, and some hospitality workers are wondering what’s next for them. 

Seventy-eight workers from the Modern Honolulu were handed a letter with two options on Wednesday. 

“It states I have 30 days until my position is being terminated, and I have 15 days to inquire about switching to another department,” said one of the laid off workers, Jack Krause.

He says housekeeping, banquets, valet and other pool attendants were also given the news. 

However, he said he wasn’t surprised when the timeshare company Diamond Resorts bought the Modern last year. 

“They almost immediately started to clean house, there was a lot of sales of banquet equipment, of furniture, we all got the sense the hotel was being gutted,” he said. 

In a statement from Diamond Resorts, a spokesperson said, “We don’t take the decision to lay off any employee lightly, which is why we’re offering every one of these team members — full time, part time and casual — a severance package. We want to make sure they have support as they transition to new careers and we will be here for them through that process as we convert the property into a vacation ownership resort.”

Krause now fears other hotels will follow the Modern. 

“I want to work it’s all I want to do,” he said. “I want to have a job in Hawaii, I want to provide for Hawaii tourism, being robbed of that and seeing that this trend is happening and that the next hotel job I get could potentially turn into timeshares—the same thing could happen.”

According to Hawaii Tourism Authority data, in the last 10 years, vacation rental units have increased 138% statewide.  Timeshare units have increased about 43% and hotel rooms statewide have increased 3%.

In those 10 years, several hotels have closed across the state like the Makena Resort on Maui which became a luxury community and the Maui Lu in Kihei which is under construction to become a Hilton Grand Vacations Resort.

“Transient vacation rentals have hurt the industry,” said Mufi Hannemann, president & CEO of the Hawaii Lodging and Tourism Association. “But we’re all for competition we just want everyone to play by the same rules.”

Hannemann also points out that with county-proposed property tax increases on hotels, Hawaii could see trouble down the line

“Now more than ever, government has to be very, very careful in the wake of what has happened to the Modern and perhaps others down the line. We’re having a difficult time trying to stay competitive and stay in business,” he said. 

Local 5 has filed a federal complaint saying the Modern violated the laid-off employees’ labor rights and refused to bargain in good faith with the union. 

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