With San Francisco’s busiest convention season on the horizon, 13 major hotels struck a deal with a labor union Tuesday that gives 4,200 workers an increase in benefits and wages and the right to organize at new hotels.

For two years, Unite Here Local 2 has battled with the hotels — collectively known as the Multi-Employer Group — over terms of a labor agreement. The union has called for a boycott of the hotels, and in August workers authorized a strike.

The labor dispute has worried tourism officials due to its effect on The City’s No. 1 industry. About $51 million in convention-related revenue was lost in the past two years due to the dispute, according to the San Francisco Convention and Visitors Bureau.

“We can now begin promoting our tourism and convention business without this cloud hanging over our head,” San Francisco Chamber of Commerce President Steve Falk said.

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“The reason it took this long was we were coordinating our efforts with other cities whose contracts were not up at the same time,” said Mike Casey, president of Unite Here Local 2, which represents the 4,200 hotel workers. “We were waiting for ’06.”

By waiting until this year, San Francisco union workers were able to coordinate labor negotiations with similar efforts in at least five other major cities, giving them more leverage over the large hotel corporations, Casey said.

The union effort may repeat itself when the labor agreement with the 13 hotels expires in August 2009. Labor contracts are still under negotiation in some of the other cities, but Casey said he expects “many [contracts] are going to line up down the road.”

The hotel workers — including housekeepers, kitchen staff and bell staff — will vote Sept. 22 whether to ratify the new contract terms. The agreement includes a $3-an-hour raise for nontipped workers. Hotel workers earn on average $15 an hour, according to the union. The agreement also allows workers to organize at new hotels through a simple majority vote, known as “card check.”

“This is a welcome and positive conclusion to the two-year dispute,” Mayor Gavin Newsom said in a statement. “Now we need to rebuild on the trust on both sides. This city is known for being a model for labor relations and we want that to continue.”

Noah Griffin, spokesman for the hotels, said the deal represents a “significant financial investment” in the industry’s workers.

The union had made unsuccessful demands for unlimited prescription coverage, more vacation time and extended dental benefits, but Casey said there “is not one concession in this contract.”

The agreement

Basic points of the tentative agreement reached between Unite Here Local 2 and 13 hotels:

Contract expires: Aug. 14, 2009

Number of workers affected: 4,200

Date of ratification vote: Sept. 22

Hotels agree to pay for increased health care costs per employee

Current: $650 per month/per employee

Projected: $1,080

Prescription benefits

Current: $2,000 cap per year

Agreement: $4,000 cap per year

Pension increase

Existing: $25 per year of service

Agreement: $30 per year of service ($35 if worker retires in next three years)

Example: 10 years of service will equal to $300 per month in pension

Wages

Salary increase: $3 per hour for nontipped workers over the next three years

Current average hotel worker salary: $15 per hour

Right to organize

In new hotels, workers would have right to organize through simple vote known as “card check”

Source: Unite Here Local 2