Increasing the daily minimum wage to 400 baht only among large employers could distort the job market in the hotel industry, say hoteliers, as the higher pay rate would attract workers to certain hotels.
As tourism in Thailand has not yet fully recovered, hoteliers say the government should prioritise reducing other expenses and launch different schemes to stimulate demand.
“Applying the measure only to large hotels, which employ more than 200 workers, is unreasonable,” said Thienprasit Chaiyapatranun, president of the Thai Hotels Association (THA).
Labour Minister Phiphat Ratchakitprakarn recently announced a possible daily wage hike to 400 baht nationwide from Oct 1 for businesses with at least 200 workers.
The current minimum wage is between 330 and 370 baht depending on the province.
Mr Thienprasit said the key purpose of the minimum wage hike is to ease the cost of living for employees.
However, when large and small hotels are located in the same area, where living expenses are the same, this could lead to workers resigning from small hotels to work at large hotels for more money.
Typically, five- and six-star hotels already offer higher wages proportional to additional skills, such as language skills, or workers with more experience.
The government in April began a pilot project by increasing the minimum wage to 400 baht in a few selected provinces and industries. That included four-star hotels and above in designated districts, which could be considered discrimination, said Mr Thienprasit.
He said the government should instead calculate the appropriate minimum wage based on economic indicators such as prices of food, ingredients and electricity as well as inflation.
It should not just decide the rate as promised during the election campaign without additional information.
Raising the daily minimum wage was a key election promise of the Pheu Thai Party. It pledged last year to increase the wage to 400 baht within its first year in power and to 600 baht by 2027.
Hiking the wage at different rates in each province is more acceptable, said Mr Thienprasit, since people in each area face different living costs, while the pace of the tourism recovery differs from region to region.
Morrakot Kuldilok, president of the eastern chapter of the THA, said the new minimum wage could increase hotel costs by at least 10-15%.
The requirement to pay the wage in companies employing at least 200 workers would affect most hotels, from three-star and above, which have 100-400 rooms, said Ms Morrakot.
Eventually, hotels must increase pay for other positions. Not only minimum-wage workers, but front office staff and management would also expect a pay rise.
In reality, many hotels cannot afford to do so as they are unable to raise their room rates, she said.
“Hotels are labour-intensive, they can’t turn to machines to reduce costs,” she said.
Ms Morrakot said the government should come up with other policies to reduce operating costs, such as maintaining the price of ingredients and electricity, offering tax incentives, or increasing the meetings budget for the public sector, along with boosting tourism demand to increase revenue.