THE IRISH Hotel Federation has called for a pay freeze among hotel workers until 2009.
The federation warned that the “one size fits all” approach to pay strategy is no longer sustainable in an industry which it said has been unable to recover the cost of previous pay increases in the past two years through extra sales or price increases.
Federation president Matthew Ryan said “a prudent short-to-medium-term strategy for improved competitiveness based on curtailing all costs over which we have control, and maintaining our level of customer satisfaction will allow the hotel sector to emerge as a stronger, more sustainable industry.”
The federation said the call for the pay freeze is based on a significant downturn in consumer demand in the domestic market.
With domestic customers making up over 61 per cent of room nights in hotels nationwide and over 70 per cent in hotels outside of the Dublin area, the federation was predicting the year would be “the most challenging in the last decade”.
Mr Ryan added: “The approach to national pay bargaining must take fully into account the competitive challenges in sectors of high labour intensity such as hospitality, where the net profit margins are low,” Mr Ryan said.
“Many of the issues facing us are outside of our control, such as the strength of the euro in international markets . . . This year, the absence of strong domestic demand will probably result in increased pressure on hotel prices which places an onus on hotel managers to reduce costs in areas over which they have some control,” he claimed.
Meanwhile, the trade union Mandate – which represents over 44,000 wholesale and retail workers, including many in the hotel sector – has called for a flat rate wage increase, claiming that many low-paid retail workers suffer disproportionately when wage increases are percentage based rather than reflective of the industry’s performance.
At the launch of the union’s publication End Low Pay, which examines pay in the retail sector in relation to other areas of the economy, general secretary John Douglas said “high earners have the capacity to absorb the inflation we now see across a number of industries, but it is unfair to ask those on middle and low incomes to take painful corrective action”.
He added: “There is also no point in reducing pay if essential services are going to be affected and the union will monitor the situation very closely,” he added.