By Andrew Starke

The hospitality sector will be hit harder than most by the 3.4 percent national wage increase announced on Friday (June 3), placing hoteliers under extra financial pressure.

This is the view of Australian Hotels Association (AHA) CEO Des Crowe who contends that the increase will have a disproportionate impact on the hotel industry, which is more exposed to higher penalty rates for night time and weekend work.

Crowe said hotels would feel the impact of the increase at night time and on Sundays and public holidays, when employers must pay additional penalty wages.

“For the second year in a row the hospitality industry has been hit with a significant wage hike,” he said.

”This increase will impact the availability of work within the hotel industry.

”Higher wages costs mean employers may be forced to offer shorter hours or reduce staffing levels on certain shifts.”

Crowe stressed that trading conditions have not been good in over the past year and the immediate future does not appear to promise any improvement.

“Any increase in wages is magnified in the hospitality industry, where larger proportion of work is performed outside normal business hours and subject to punitive penalty rates,” he said.

The AHA also expressed disappointment with Fair Work Australia’s refusal to offer concessions to employers in disaster-affected regions.

“It is completely unfair for employers in disaster-affected regions to be subject to the full measure of this significant cost increase,” said Crowe.

”The recent spate of natural disasters has created an imbalance between the number of regions suffering severe downturns and the rest of the country.

”Many hotels were forced into lengthy periods of closure and are now operating in depressed trading environments as their local communities recover.

”There is no simple procedure for disaster-affected businesses to seek relief from wage increases and the rejection of special case treatment by Fair Work Australia will be frustrating for many of our members.”

The increase was at the higher end of industry expectations given the low rate of inflation and a slowing of economic growth following the recent natural disasters.

Crowe warned that the compounding impact of the wage increase will lead hotel employers to consider ways to limit their exposure.

“Hospitality is a round the clock industry but the Fair Work Act and the hospitality award conditions make it cost prohibitive to trade during certain times,” he said.

”Every time there is a wage increase, these impediments to maintaining or increasing working hours for employees in hotel sector is hit harder than other industries.

”Unless the hospitality economy improves dramatically in the coming months, many hotels will have trading difficulties with these added wage costs.”

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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