A five-day strike by union workers that began yesterday at the Hilton Hawaiian Village has the potential to cause near-term damage to the state’s leading industry.

"Any disruption in our tourism industry will not be beneficial to anyone in our islands," said state tourism liaison Marsha Wienert. "We hope that both sides are negotiating in good faith."

The recovery of the state’s still-fragile economy has been riding the coattails of the tourism industry with visitor arrivals up 7 percent and visitor expenditures ahead 12.7 percent through the first eight months of the year.

Hoteliers, who had to heavily discount rooms to attract guests, have been encouraged by increased occupancy levels that were at 71.2 percent through August compared with 65.5 percent at the same time a year ago.

Few in the islands would want to see a strike damage the recovery in tourism, but the labor dispute has already prompted at least one large mainland group to threaten to cancel an event next month that was to bring more than 10,000 visitors to the state.

The International Foundation of Employee Benefit Plans, which is planning to rent about 5,700 hotel rooms next month for its annual conference, threatened to cancel the Nov. 14-17 event if there is the potential for a strike or other union action. The group said most of its members are pro-union and would not want to cross a picket line.

It’s not just conventions. Individual tourists could also be put off by word that Waikiki hotel workers are on strike.

Keith Vieira, senior vice president of operations for Starwood Hotels & Resorts-Hawaii & French Polynesia, said he is concerned about the labor disruption for both the industry and the state.

"This could affect all of us in Hawaii because it’s a leisure discretionary spend and they don’t have to go here," Vieira said. "They could go somewhere that doesn’t have any disruption."

Unite Here Local 5 spokesman Cade Watanabe said the union and the Hilton have been negotiating over wages, working conditions, job security and outsourcing. But no agreement has been reached on any issue. Roughly 1,500 workers at Hilton Hawaiian Village, the chain’s largest hotel, are represented by the union. They include housekeepers, bellmen, front desk, valets and food service workers.

Jerry Gibson, area vice president for Hilton Hawaii, said the parties made substantial progress at their last bargaining session on Sept. 29 and that additional negotiations are scheduled for later this month. He said the Hilton is continuing to operate and has staffing in most of its departments.

"It is unfortunate that Local 5’s leadership has chosen to take this unnecessary step," Gibson said. "Union tactics such as work stoppages and demonstrations are harmful to employees, to the hospitality industry and to the state of Hawaii."

Watanabe said the employees return to work on Tuesday.

"What we are doing is part of our right to demonstrate out there," Watanabe said.

While the strike is not welcome, its impact most likely will not be long-lasting, said David Uchiyama, vice president of brand management for the Hawaii Tourism Authority.

"We’re coming out of probably one of the worst times for tourism overall in 2008 and 2009, so any disruption is going to have an effect," Uchiyama said. "But the existing action being taken is very isolated and for a very short time, and this is consistent with what we’ve seen in (Unite Here) actions for San Francisco, Chicago and elsewhere."

Hilton’s Gibson said not only is the union hurting tourism with the strike, but the union is also calling convention groups asking them not to come to Hilton Hawaiian Village.

The International Foundation, the group that is planning to come next month, said it may be able to find rooms at hotels without union issues. Watanabe said he hopes the group can book rooms at other properties.

The foundation said it has scheduled a conference in Hawaii every five years since the 1970s. If it has to cancel this year due to the strike, the foundation said it is unlikely to bring a conference of this size back to Hawaii.