Rising wages cause hoteliers concern
Hoteliers are becoming worried about spiralling payroll costs, according to research by the British Hospitality Association and Barclays.
According to the survey, conducted last month, 20% of respondents saw wage costs rise by more than 6% last year, with a further 15% experiencing an increase of over 10%. Just over a quarter (26%) saw costs increase by between 3-6%. Only 7% of those surveyed saw wage costs go down.
Chief executive Bob Cotton (pictured) said: “These higher increases are considerably more than the growth in average earnings in the country as a whole, and far higher than inflation. This is unsustainable if it continues at this level.”
Mr Cotton said reasons for the wage hikes included the fact that a severe shortage of skilled staff was pushing up wages and the impact of the National Minimum Wage which increased by 11% in October.
He said: “The minimum wage directly affects businesses in some of the more outlying parts of the country and this upward pressure is worrying, as the survey shows. In London and South East, it pushes up the differentials, so the effect is the same.”
However Mr Cotton told TravelMole that he did not believe the minimum wage had “caused a lot of problems” in the industry. He pointed out that the wage increases had more to do with the fact that hotels in provincial areas were doing quite well at the moment.
According to the survey between September and December 2001 nearly half (47%) of provincial hotels saw occupancy increase with only 30% showing a decrease. Mr Cotton pointed out: “At the end of the day people will pay what they have to to get the right calibre of staff. If you are not able to recruit the right kind of people then you have to pay more.”
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