NEW YORK — The fight over a proposal to regulate New York City’s hotel industry is testing the influence of a union with almost unique political clout.
For years, the Hospitality and Gaming Council killed your enemies — Airbnb, real estate developers and one powerful vice mayor – with unparalleled political power.
Now he faces a multimillion-dollar lobby over a bill he helped draft to require hotel owners to obtain operating licenses and restrict the use of subcontracted workers.
The owners plan to spend up to $20 million to combat what one industry representative described as a “nuclear bomb” for their sector. And a separate but related backlash from restaurant owners quickly succeeded in delaying the first hearing on the measure and getting the hotel industry excluded from the bill.
“The HTC is the most politically powerful union in the city – especially considering its size, it punches above its weight,” said Chris Coffey, a political consultant. “This bill will be a test of that. It won’t be easy for them, but there is no one better positioned.”
The lobbying effort pushes major hotel owners into combat with a union that has influence over the mayor Eric Adams and City Council and has barely lost a political fight in recent memory.
“I don’t think threats and intimidation are an effective tactic,” said Council member Julie Menin, the lead sponsor, referring to industry resistance. “On the contrary, more members have signed the bill since the threat was made.”
But one industry insider said the opposition is already having an impact on hotel owners.
“The instinct is to go to war, which is why we see some groups now planning to spend millions of dollars that would otherwise go to council members,” the person said. “The council is slowly scaling back the bill to avoid controversy and convince big industry that this is not the nuclear bomb they think it is.”
Influential lobbyists and political consultants are lining up on both sides of the issue.
Vito Pitta — Adams’ campaign lawyer — is lobbying on the union’s behalf through his firm Pitta Bishop, according to two people familiar with the matter. Frank Carone, one of the mayor’s closest advisers, is also on the union’s payroll, although he is not currently working on this specific legislation, according to people familiar with his involvement.
Meanwhile, Neal Kwatra, the hotel union’s former political director, is advising a group of owners fighting the law, according to four people familiar with the matter. Peter Ward, the union’s former president, also represents owners fighting the law, although several people familiar with the issue say his involvement has been minimal. And Evan Thies, a top adviser at Adams, represents the Hotel Association of New York City, the industry’s trade group.
From limiting Airbnb’s expansion in the city to effectively banning the construction of non-union hotels, the union has won virtually every major legislative priority it has pursued in recent years. He often bet on the right politicians and benefited from these alliances.
The union, for example, was instrumental in elevating Corey Johnson to chairman of the board in 2017. During his term, the legislative body multiple approved cracking down on accounts in short-term rentals and spent special license rules which were widely seen as a way to ensure that future hotels used union labor.
The Hoteliers Union later endorsed the ill-fated presidential candidacy from former Mayor Bill de Blasio, who supported the union-favored special permit despite objections from his own planning department.
The union’s former political director, Katie Moore, ran Mayor Eric Adams’ 2021 mayoral campaign, and Jason Ortiz, a political consultant close to the union, ran an independent budget for him.
During this election cycle and in 2023, the union has contributed at least $1 million to council candidates. Its grip on the legislative body is so strong that when the hotel owners’ association wanted to delay action on the latest licensing bill, it contacted the union directly rather than the board, which ostensibly controls its own calendar for hearings and votes.
Even critics of the latest legislation acknowledge the union’s influence and say it is likely that a version of the bill will pass despite opposition from hotel owners and real estate interests. The measure currently has 34 council sponsors, a veto-proof majority, up from about 24 sponsors at the end of last week. Additionally, it gained support from other unions, including 32BJ, DC37, NYSNA, and the Central Labor Council.
But the power — and money — of the hotel industry has not been used against the union to this extent in previous legislative initiatives.
The hotel owners association supported the fight against Airbnb and the industry helped fund a campaign supporting legislation to restrict short-term rentals. The association was supportive of zoning changes that require hotels to obtain a special permit through the city’s lengthy land use review procedure. This policy had the effect of limiting the supply of new hotels – and increasing rates at existing hotels.
But the industry is aggressively fighting this latest move, arguing it would destroy the city’s tourist economy and put hotels out of business. The hotel association’s opposition and planned $20 million spending by a spinoff group called Hotel Owners of New York create a dynamic that didn’t exist in the union’s previous struggles.
The union initially intended for the project to be approved over the summer, but a July council hearing was postponed until October amid strong reactions from the hotel industry, real estate interests and restaurant owners. (The bill has since been amended to exclude restaurants and bars located in hotels and address other concerns, and the New York City Hospitality Alliance is no longer opposed.)
“This legislation was drafted with policy, not politics, in mind,” said Vijay Dandapani, president of the hotel association, in a statement.
Despite the union’s long-standing influence, the threat of industry money being spent against the bill and the board members themselves could affect their deliberations on the legislation.
“The hotel industry, if you take this down your throat, how will you respond in 2025? The union will no longer have the playing field to itself,” said a person from the hospitality sector who requested anonymity to speak freely. “You have awakened a sleeping giant.”
Supporters of the bill are undeterred and say the hard-line opposition expressed by hotel owners is not representative of the entire industry.
“It is disappointing that some hotel owners have refused to engage constructively in the process, but I hope they now realize that this is not a winning approach,” Rich Maroko, the union’s president, said in a statement.
Menin, in turn, said she is “absolutely open” to further changes to the bill.
“The real problem here is that there is a small group of anti-union billionaires who refuse to negotiate and essentially try to prevent other hotel owners and association members from negotiating,” said one person close to the union. “Hotel owners are certainly biting the hand that kept them well fed for many years.”
