While the association agrees with the decision to increase wages to improve workers’ livelihoods, it believes the new minimum wage, adopted on July 1, does not reflect the real tourism and economic situation in each region, reports the Bangkok Post.
“We support this policy, but a blanket rate for all hotels nationwide is unfair,” said THA President Thienprasit Chaiyapatranun.
Only five or six major tourist destinations are posting growth, while activity in most second-tier cities remains sluggish, he added.
For instance, he said, the government’s co-payment tourism subsidy scheme still has more than 54,000 room-nights left unused for second-tier cities, suggesting low demand and an uneven recovery in the hospitality sector.
The annual general meeting of the THA on Wednesday attracted 353 hotel representatives out of 1,038 members.
A majority of attendees voted for the proposal to sue the wage committee and hire Gold Law, which specialises in Administrative Court cases. Legal services are expected to cost roughly B1.7 million.
The THA will ask the Administrative Court to review and revoke the wage committee’s announcement, issued on June 17, stating that the B400 minimum wage applies to hotel businesses under the Hotel Act, specifically hotels under categories 2, 3 and 4 in all provinces.
Mr Thienprasit said the new minimum wage law violates Section 87 of the 1998 Labour Protection Act.
“Although the Section 87 (2) grants authority for the wage committee to determine a minimum wage for hotel businesses in any locality, this doesn’t mean that the committee can arbitrarily announce a wage,” he said. “It must consider the facts in accordance with the conditions and criteria stipulated in Section 87 (1).”
Section 87 (1) requires the committee to evaluate the wage based on the cost of living index, inflation, production costs, prices of goods and services, business capability, labour productivity, GDP and socio-economic conditions.
In order to revoke the wage committee’s announcement, the process must occur within 90 days after the Royal Gazette published this regulation in late June.
The association hopes that a favourable ruling in its case will allow hotels to return to the same minimum wage as other sectors based on 17 different regions in Thailand.
For instance, the wage in major cities like Bangkok and Phuket would be B400, while the lowest rate, B337, would apply in Narathiwat, Pattani and Yala. Typically, manpower expenses make up roughly 30% of total hotel operating costs, said Mr Thienprasit.
Without any revision on the B400 rate, the association is worried that more hotels will be forced to close down or lay off more staff.
Illegal hotels could also take advantage of lower operating costs compared to licensed hotels of the same type, said the THA president.
“The National Economic and Social Development Council this year projected the number of foreign arrivals at only 33 million, decreasing from 35.5mn last year. Overall hotel revenue is also expected to shrink by 7% year-on-year on average,” he added.