Up to two-thirds of the hospitality industry workforce could benefit from the 24% minimum wage increase unveiled by the Prime Minister, it was revealed yesterday, in the hope that the increased business volumes in the sector will offset the additional cost.
Robert Sands, president of the Bahamas Hotel and Tourism Association, told Tribune Business that the $50 per week increase announced by Philip Davis KC was “long overdue”, while the January 2023 implementation date gives industry “enough time to prepare” and adjust cost structures.
He added, however, that the upcoming minimum wage of $260 a week cannot be “considered in isolation”, but is part of a larger set of costs that must be reduced to ensure the sustainable development of the labor industry. tourism and its continued contribution to economic growth.
“We recognize that this is long overdue.” Mr. Sands talked about raising the minimum wage. “We expect some increase in the minimum wage, so it is not a total shock. We will have enough time to prepare for it. It is especially the line staff, the entry-level service staff for the most part, who will be impacted.
“I think we can say especially the service area, which represents two thirds of the workforce of a hotel. Anywhere up to two-thirds of a particular hotel and casino’s workforce will be affected by this. Workers in areas such as food and beverage, housekeeping, and pool attendants generally receive minimum wage as their base salary, but earn the majority of their income via tips and the 15% gratuity.
“Businesses will still be impacted by this particular issue, even if it weren’t unforeseen,” Sands added. “The real answer is that you don’t anticipate this level of increase, but we have always been resilient and it is a testament to our tenacity that we have overcome seemingly insurmountable challenges in the past.
“We hope that activity levels will continue to grow, that we will continue to grow our business and that we will be able to generate additional activity that will help us deal with the negative effects of this increase at this stage.”
Highlighting the bigger picture, Mr Sands added: “We recognize the rising costs that everyone is facing, but this cannot be viewed in isolation. We must ensure that the cost of doing business in the Bahamas is at a sustainable level and contributes to the economic growth and development of the country. We have to work on elements that contribute to it.
Again identifying renewable energy as a priority item, the BHTA Chairman also reiterated previous calls for holiday rentals to pay their fair share of taxes and infrastructure maintenance to ensure that the financial burden does not rely solely on the resort sector.
Darrin Woods, president of the Bahamas Hotel, Catering and Allied Workers Union (BHCAWU), told this newspaper that many employees in the hospitality industry affected by the minimum wage hike will not benefit from the full $260 increase per year. week because they don’t work a full 40 hours. Yet even at 37.5 hours, some impact will be felt.
Suggesting the increase will help more workers qualify for bank loans, he added: “I agree with the Prime Minister that the increase is long overdue. When we talk about 2015 to 2022, it’s a long wait. »
The BHTA, in a statement on the minimum wage increase, said: “The tourism industry, as key private sector partners with government and employers of a similar stature, has aligned itself with the government’s perspective that an increase in the minimum wage is due The subject has been on the table of collective discussion between the public and private sectors for some time.
“We are also aligned with the government’s recognition and concerns about the myriad of unprecedented challenges we are facing due to forces beyond our control. We approve and support the government’s efforts to mitigate the negative effects on our economy. Supply chain issues, resulting product shortages and price hikes attributed to the pandemic, global inflation, post-economic devastation exacerbated by past hurricanes are our harsh reality.
He continued: “The tourism industry – from bonefish lodges to local Bahamian restaurants, from local boutique bed and breakfasts to mammoth-sized resorts – recognizes the importance of reducing the rising cost of living and doing business in the Bahamas as essential to our ability to survive and eventually thrive as a key driver of our tourism economy.
“The minimum wage theme is just one part of a holistic strategy that must be designed and deployed to achieve all that we collectively seek to achieve – a prosperous, resilient, sustainable and diverse economy that appropriately supports a population made up of a wide range of owners, operators and employees of micro, small, medium and large enterprises, public and parapublic sector organizations and their employees.
“However, we encourage the government to pursue meaningful structural reforms necessary for the growth of our tourism industry and the economy in general, such as the diversification of electricity production, and to rapidly roll out initiatives designed to address long-standing issues that contribute to the high cost of doing business in the Bahamas.
“Furthermore, we support and encourage the government’s efforts to ensure that tourism participants who have benefited but have not contributed to the public purse are brought into the financial fold, so that we can rightly share the brunt of the burdens. financial burdens that we bear as a nation. today.”