The unions representing hospitality workers in Las Vegas reached a tentative deal with Caesars Entertainment (CZR.O) for a new labor contract covering about 10,000 employees on Wednesday, two days before a strike deadline.
The negotiations come as unions across industries press employers for better pay and benefits, buoyed by a shortage of workers. Casino resort operators have been earning record profits from a steady post-pandemic recovery in Las Vegas tourism.
The Culinary Workers and Bartenders Unions said the five-year contract would cover employees including attendants, waiters and kitchen workers at nine Vegas properties.
Details of the agreement were not immediately available. The unions plan to make a statement later in the day.
Caesars Entertainment, the second-biggest Las Vegas casino operator by number of employees, said the deal provides "meaningful wage increases" and aligns with plans to bring more union jobs to the Strip.
The Las Vegas unions, considered among the most powerful in the United States, have been demanding higher wages, stronger protections against new technology that may threaten jobs, a reduction in steep quotas for housekeepers and improved safety.
Visits to the city in September were 4% lower than in the same period in 2019, according to data from the Las Vegas Convention and Visitors Authority. Room rates, however, have surged more than 47%.
The city is gearing up for major events including the Formula 1 Las Vegas Grand Prix this month, which is expected to draw more than 100,000 tourists.
"Companies that can't afford a strike shutdown are going to face the most pressure to make big concessions," said Erik Gordon, a University of Michigan business professor.
“It's taken a little too long in my opinion,” said Daniel Busby, 33, a fry cook at the Paris Las Vegas Hotel and Casino operated by Caesars, before the deal was reached. “We are just asking to be able to live a little bit more comfortably.”
The unions have been in talks with the casinos for about seven months and 95% of their members had voted at the end of September to authorize a city-wide strike.
TALKS WITH MGM, WYNN CONTINUE
Talks with casino operators MGM Resorts International (MGM.N) and Wynn Resorts (WYNN.O) are yet to yield an agreement ahead of Friday's deadline for a strike.
A strike at MGM and Wynn would affect nine casino resorts and 25,000 workers, a majority of whom are employed by MGM.
MGM said they are meeting with the unions in the afternoon, according to a spokesperson.
Wynn did not immediately respond to a request for comment.
MGM has said every 1% increase in wages will equal about $10 million of additional labor costs, according to Truist analyst Barry Jonas.
He estimated that wage increases could lift annual costs by $40 million to $60 million for Caesars and double that amount for MGM, based on their employee figures.
The Culinary and Bartenders unions represent some 53,000 workers based in Vegas.
Caesars shares were up 1%, while MGM rose 1.4% and Wynn Resorts dropped 0.5%.
