The Cabinet approved a nationwide daily minimum wage hike from Jan 1, ranging from B337 to B400. Several tourism destinations were assigned the highest rate of B400, including Chon Buri and Phuket, while the rate in Chiang Mai’s Muang district is set at B380.
Paisarn Sukjarean, President of the Thai Hotels Association’s northern upper chapter, said rising minimum wages should not significantly affect hoteliers in Chiang Mai.
Many hotels already pay their employees a higher rate than the minimum, plus service charges of up to 10% of room revenue, for total earnings of B500-600 per day, he said, reports the Bangkok Post.
While hiking the daily minimum wage to B380 could mean 3-5% higher costs for hotels, robust tourism this year should help to ease the situation, Mr Paisarn added
Mr Paisarn said tourism had improved tremendously, especially during this high season. Though the low season arrives in a few months, robust income accumulated during the high season should help to compensate for the less busy period, he said.
Given the industry-wide labour shortage as manpower costs rise, he said hotels will not increase their employment, but instead allocate more responsibility to staff, assigning them more work than the typical staff-to-room ratio of 1:1.5 or 1:2 in Chiang Mai.
Some hotels will consider employing more casual staff to avoid incurring higher fixed costs on welfare, which is mandated for permanent staff. This plan allows them to hire more people for the high season and cut expenses during the low season, said Mr Paisarn.
He said the government should help by maintaining costs, such as electricity and fuel prices, to help operators.
Thanet Supornsahasrungsi, President of the Association of Chonburi Tourism Federation, said tourism businesses that survived the pandemic already pay employees more than 400 baht daily to maintain staff levels amid a labour shortage.
However, he said the higher minimum wage could impact small and medium-sized hotels, which account for 20% of the total in Chon Buri, as their room rates are low and they stick to the minimum threshold.
Mr Thanet said staff expenses typically make up 35% of hotel operational costs.
He said setting the daily minimum wage at B373 for some high-end hotels in Bangkok made no sense when the hotels have more expensive room rates than those in the tourism provinces.
The government should allow more flexible wages based on market supply and demand, shifting its focus to labour reskilling and upskilling, said Mr Thanet.
Hotel operators are willing to pay higher salaries to staff equipped with additional skills, such as languages, he said.