Thai hotel industry resists proposed minimum wage hike

The tourism industry has voiced its concerns over the recent approval by the tripartite wage committee to increase the minimum wage to 400 baht for four-star hotels in 10 key tourism cities, beginning with the Songkran holiday. Hoteliers argue that the implementation of the wage hike is unjust as the recovery from the pandemic has been uneven across the targeted destinations.

Marisa Sukosol Nunbhakdi, the previous president of the Thai Hotels Association (THA), emphasised that merely 10% of hotels are in a position to elevate daily room rates on the back of stronger revenue post-pandemic, as most accommodations are still struggling to bounce back. She also highlighted the higher operating costs that hotels bear, including utilities.

“It is unfair to raise the minimum wage only for hotels, as other industries are also recovering steadily from the pandemic.”

Marisa further queried the specificity of the new regulation, which applies only to four-star hotels in certain areas, and expressed that not all hotels in this category are performing well.

The tourism industry is labour-intensive and needs time to adapt to rising costs. she stressed that a few weeks is insufficient to adjust to the wage hike set for April 13.

As Thanet Supornsahasrungsi, President of the Association of Chon Buri Tourism Federation, highlighted, many hotels have not undergone star rating system certification by the Thailand Hotel Standard Foundation, leaving some operators uncertain about the potential impact of this rule.

Udom Srimahachota, the vice president of the THA’s western chapter, noted that although the minimum wage applies to a small portion of hotel workers, such as gardeners and housekeepers, hotels cannot avoid wage increases at all levels. He clarified that labor costs typically make up 30–35% of hotel expenses.

Udom warned that hotels may need to reduce staff service charge income, or even resort to layoffs to offset costs to accommodate the wage increase, as associated costs, such as social security contributions, will also rise.

“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.”

Udom expressed hope that the new regulation would be postponed until the government provides clarity on its approach, giving operators time to adapt as the tourism sector gradually recovers. He also urged the government to address the issue of importing foreign workers for the hotel sector, reported Bangkok Post.