Palms brings in outside food service operator

Sep 14, 2015 9:43 AM

The decision by Palms owners to turn some of its food service operations over to an outside company has Culinary Local 226 ready to go to war, so to speak. The agreement with a company known as Sodexo will become official Nov. 2.

The decision sounds like other similar deals that will relieve the  resort’s private equity owners – Leonard Green Partners and TPG Capital – of the costs associated with the care and maintenance of what could have been a Culinary Union bargaining unit of more than 800 people.

The deal says nothing at this point about the quality or personality associated with non-gaming amenities that in some hotels become marketing tools. It’s a jobs issue for workers who will have to re-apply for jobs and who may see a modification in their benefits once Sodexo takes control Nov. 2.

So what is Sodexo?

It is a food service operator that has a lot of experience dealing, not with travel and tourism, but with governmental agencies. Sodexo was just awarded a four-year contract with the U.S. House of Representatives and also manages food service operations for agencies in the Washington D.C. area such as the Department of Transportation, the U.S. Patent Office and the Department of Defense.

Does this say anything about its ability to turn out a tasty club sandwich? Probably not but it does suggest that the Sodexo business model will enable it to buy the elements of that sandwich cheaper than the Palms can.

Local 226 of the Culinary had contacted Palms CEO Todd Greenberg this summer asking the hotel to remain neutral while it arranged a possible election to see whether employees would support the union. But the Palms says it has been in negotiations with Sodexo since early this year.

The Palms operations to be serviced by Sodexo include the coffee shop and buffet, room service, employee dining room and associated departments.

The Palms is hanging on to other restaurants, those with some obvious marketing potential. For instance, it is now home to what has been described as the largest Hooters in the country, a feature that may be more successful  as a food and beverage option than it was as a stand-alone hotel and casino.

Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: [email protected].