Hotels chafe at targeted wage hike

Hotels chafe at targeted wage hike

Some claim new ruling is unclear

Hotel operators offer deals at the recent Thai Teaw Thai Fair. Mr Udom says labour costs account for 30-35% of hotel expenses. (Photo: Apichart Jinakul)
Hotel operators offer deals at the recent Thai Teaw Thai Fair. Mr Udom says labour costs account for 30-35% of hotel expenses. (Photo: Apichart Jinakul)

Hoteliers say it is unfair to apply the minimum wage hike only to the tourism industry as the recovery has been uneven among targeted destinations.

The tripartite wage committee approved raising the minimum wage to 400 baht for four-star hotels in 10 major tourism cities, starting from the Songkran holiday.

Marisa Sukosol Nunbhakdi, former president of the Thai Hotels Association (THA), said only 10% of hotels are capable of raising daily room rates based on firmer revenue following the pandemic, as the majority of accommodation have yet to recover.

Mrs Marisa said hotels have higher operating costs, including electricity and water bills.

In addition, hotels have not benefited much from the government budget, as state meeting budgets are limited to 700-800 baht per person, with a room rate of around 1,000 baht for governmental officers, she said.

"It is unfair to raise the minimum wage only for hotels, as other industries are also recovering steadily from the pandemic," said Mrs Marisa.

It is also unclear why the new regulation only applies to four-star hotels in certain locations, she said. Not every hotel in this category has a healthy business.

Hotels are a labour-intensive business and require time to prepare for surging costs, said Mrs Marisa, adding they need more than a few weeks, as the wage hike is scheduled for April 13.

Thanet Supornsahasrungsi, president of the Association of Chonburi Tourism Federation, said as many hotels have not been evaluated under the star rating system certified by the Thailand Hotel Standard Foundation, some operators are unsure about how this rule could affect them.

Udom Srimahachota, vice-president of the THA's western chapter, said although the minimum wage applies to a small number of hotel workers such as gardeners and housekeepers, hotels cannot avoid raising wages at all levels.

He said labour costs normally account for 30-35% of hotel expenses.

Mr Udom said hotels may need to cut staff service charge income, or even lay off some workers to trim costs in order to accommodate the wage hike, as associated costs will also increase, such as social security contributions.

He said if the government's goal is to improve people's quality of life via a higher wage, it should focus on policies that help the overall economy.

Mr Udom said he hoped the new regulation would be delayed until the government clarifies its methods, allowing time for operators to adjust as the tourism sector gradually recovers.

Moreover, the government should resolve the bottleneck of importing foreign workers for the hotel sector, he said.

In related news, the THA yesterday held an election for the new committee board, with Thienprasit Chaiyapatranun selected as the new president.

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