MAJOR hotel owners in the country believe the approval of a legislated wage hike will disrupt the momentum in the recovery of the tourism industry.
In a letter to House Speaker Martin Romualdez dated March 14, 2024, Philippine Hotel Owners Association (PHOA) President Arthur M. Lopez said that while the stakeholders’ group recognizes the need to improve the welfare of workers, the tourism industry continues to be “fragile” and is still recovering from the Covid-19 pandemic.
“Tourism numbers and revenue figures are struggling to recover,” said Lopez in a news statement sent over the weekend. “The industry is still grappling with low tourist arrivals, decreased room occupancy rates, and subdued revenue generation compared to prepandemic levels. What is needed is a strategic and sustainable approach to economic recovery,” he added.
International arrivals last year reached 5.45 million, breaching the Department of Tourism’s 4.8-million target for the year. However, this was still 34 percent less than the 8.26 million historic high arrivals in 2019. Foreign visitors also spent an estimated US$8.69 billion (P482.73 billion) in the country last year, which was 6.6 percent less than the $9.3 billion (P516.62 billion) they spent in 2019. (See, “International tourists spent $8.69 billion in PHL in 2023–DOT,” in the BusinessMirror, January 3, 2024.)
The House of Representatives is currently discussing proposals calling for a P150 to P350 increase in the daily minimum wage; the Senate recently approved on third reading Senate Bill 2534, providing a P100-minimum wage hike. The current minimum wage in Metro Manila is P610 per day.
Labor groups generally welcomed the moves in Congress to support legislated wage increases, although economists, even in the Lower House, warned that this would speed up inflation, or the rise in the prices of consumer goods and services, as well as result in the closure of small- and medium-scale operations.
Marikina Rep. Stella Quimbo said, “When we increase the minimum wage…companies will just pass on the increase to prices of goods, and we can expect that will result in an inflationary problem.”
For his part, Albay Rep. Joey Salceda said, “We already have a workable arrangement with the regional wage boards…[The wage increase, however] will hit the SMEs. They won’t be able to afford it.”
Meanwhile, Lopez urged policymakers to consider the “unique challenges” faced by the tourism and hotel sector in the current economic climate, but failed to specify what these were. He added that regional wage and productivity boards should be entrusted to decide on any proposed wage increases.
“There is a need for more comprehensive initiatives encompassing education, training, and business environment improvements to foster long-term growth and job creation,” said Lopez.
PHOA has 60 member-companies that operate 206 hotels in the country. The group recently signed off on the new implementing rules and regulations of the Service Charge Law, issued by the Department of Labor and Employment. (See, “Service charge must not be used as ‘reward’ to keep good hotel staff—DOLE,” in the BusinessMirror, March 5, 2024.).