Hilton Hawaiian Village Waikiki Beach Resort offered striking Local 5 UNITE HERE hotel employees up to $10 per hour in wage increases over four years in a new contract that workers ratified Monday to end a 40-day strike.

Local 5 said the contract was ratified by an “overwhelming majority.” Some 1,800 Local 5 workers went on strike Sept. 24 when negotiations reached an impasse between Local 5 and Hilton Hawaiian Village, the largest single-resort property in the state. Workers are expected to begin returning to work at 4 a.m. today.

When the strike started, workers were seeking a $12 hourly-wage increase, and Hilton at first offered to meet them about halfway. The final outcome this time around was significantly higher than in 2018 when 2,700 Local 5 workers at five Marriott-managed hotels went on a 51-day strike that ended with the ratification of a contract that gave union members up to $6.13 an hour in pay and benefit increases over four years.

Cade Watanabe, Local 5 financial secretary-­treasurer, said in a statement, “Workers at the Hilton Hawaiian Village have led all of us to an important and historic victory that puts hospitality workers and this community one step closer to making ‘one job enough’ a reality.”

Adam Wit, vice president and senior counsel, labor relations, Hilton, said Saturday in a statement, “We believe this agreement is beneficial to our valued team members and to our hotel. We look forward to welcoming our team members back to work and continuing to provide our guests with our signature hospitality.”

The local strike was part of a nationwide effort by UNITE HERE, which said the national movement is gaining momentum from ratification of a new contract at Hilton Hawaiian Village and in Boston where Marriott workers have a tentative agreement and are slated to take a ratification vote today.

UNITE HERE noted that 2,000 hotel workers remain on strike at Hilton, Hyatt and Marriott hotels in San Francisco and cautioned that more strikes are possible in cities across the country, including in Honolulu and on Kauai.

Watanabe said, “Our campaign continues until we have achieved settlements with Hyatt, Kyo-ya &Marriott — where more than 3,200 hotel workers have also authorized additional strikes if necessary.”

Ed Schack, a cook at the Hilton Hawaiian Village for 35 years, said in a statement, “After being on strike for 40 days, I could not be more proud of my coworkers and my union for reaching a tentative agreement that accomplishes our major goals including wage increases that put a real value on the importance of our jobs as hospitality workers. At the same time, I know the fight is not over yet and I am ready to stand behind other hotel workers fighting for a fair contract.”

Now the expectation is that other Local 5 Hotels will need to come close to Local 5’s Hilton Hawaiian Village union contract to avoid strikes and stay competitive.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said, “While we have concerns about the continued rising cost of businesses in Hawaii, no question we are happy that everyone is soon back to work and we can try to grow our visitor spending.”

The new Hilton Hawaiian Village Local 5 contract matches the new wage increases for UNITE HERE workers in San Diego, who also got about a $10 hourly-­wage hike over four years.

The American Hotel &Lodging Association has projected that Hawaii hoteliers would pay the nation’s sixth-highest amounts of hotel wages this year at nearly $3.7 billion, up from nearly $3.4 billion in 2023 and nearly $3.1 billion from the pre-pandemic 2019 level.

Local 5 said that since 2019 the U.S. hotel industry’s gross operating profit has increased by 26.6% and average daily room costs have increased by 23%, while hotel staffing has decreased by 13% as hotels implemented pandemic staffing cuts and suspended guest services, which has caused workers to lose jobs and income.

National average hotel wages in February were $23.84 per hour, according to the Bureau of Labor Statistics. That’s significantly less than what most of Hawaii’s Local 5 hotel workers were making before this latest Hilton Hawaiian Village contract.

Honolulu Star-Advertiser research shows that an average Local 5 housekeeper prior to the strike made about $28 an hour, which equates to an estimated $65,000 for full-time wages, including some $7,000 in tips. Currently, the all-in cost for the employer is more than $100,000 in wages and benefits for full-time work.

When the average wage for housekeepers increases to about $38 an hour, the new annual wage would be more than $86,000, including tips. The all-in cost for the employer in wages and benefits would rise to more than $121,000 for full-time work.

The average Local 5 front desk worker prior to the strike made about $31 an hour, which equates to nearly $65,000 for full-time wages. The all-in cost for the employer is more than $99,000 in wages and benefits for full-time work.

If the average wage for a front desk worker increased to about $41 an hour, the new annual wage would be more than $85,000, and the all-in cost to the employer with benefits would be about $120,000 for full-time work.

The most lucrative Local 5 union jobs are often in the bartender classifications since these jobs come with substantial tips. Star-­Advertiser research shows that prior to these negotiations, Local 5 bartenders on average made about $35 an hour, which equates to an annual average of nearly $133,000, including an average of $60,000 in tips. The annual all-in cost for the employer in wages and benefits is more than $167,000 for full-time work.

Under the new contract bartenders would make about $45 an hour, which equates to more than $153,000 annually including tips. The all-in annual cost for the employer in wages and benefits would rise to nearly $189,000 for full-time work.

Lynette Eastman, general manager of the Surfjack Hotel &Swim Club, a small boutique hotel in Waikiki, said the new union wage scales at the Hilton Hawaiian Village will increase the wage disparity that is already present in the market and could make it harder especially for smaller hotels to hire and retain workers.

She said even if hotel revenue is flat or going up, higher operating and labor costs could negatively affect the bottom line.

Vieira said, “There is a concern that the cost of operating hotels has gone up substantially and labor is going up significantly; this puts pressure on the cost equation for visitors to come to Hawaii. The destination is going to have to focus on making it worth it.”