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Pubs and hotels struggle to absorb increased wage costs

The AHA says pubs and hotels were forced to cut staff hours following 2011 wage rise.

20/03/2012 - Pubs and hotels have been forced to slash employee working hours and reduce trading times to help cover mandatory wage increases implemented in 2011, according to a recent study. Kalon Huett

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The Australian Hotels Association (AHA) recently submitted its Annual Wage Review 2011-12 to Fair Work Australia (FWA), in which it claimed around four out of five licensed venues made cuts to opening hours that impacted staff rosters and incomes - and were a direct result of the latest round of wage rises.

A survey of 643 industry members was conducted in January, with the AHA finding 87 per cent of pubs and 80 per cent of hotels had responded to the FWA's 3.4 per cent wage boost by scaling back employee working hours.

And it appears this may not be an isolated decision, as the association warned the industry is unable to cope financially with another rise in 2012 and that further cuts would be the inevitable result of such a move.

AHA Corporate Affairs Manager Steven Fanner told News Limited: "It's a cost a lot of businesses try to absorb without putting up their prices, because they're worried about the effect that would have in the current climate."

"So they respond to current wage rates by having leaner operations, which means cutting hours."

31 per cent of hotels and 24 per cent of accommodation venues said they cannot sustain another wage rise in 2012.

The majority of hospitality businesses reported decreased trading hours in 2011 in order to compensate for the effects of the wage increase - 52 per cent of accommodation venues and 63 per cent of pubs.

According to the survey, 77 per cent of hotels and 68 per cent of accommodation venues attempted to absorb the increased costs without raising product and services prices.

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