Tribune Business Editor

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Up to two-thirds of the hotel industry’s workforce may benefit from the 24 percent minimum wage increase unveiled by the Prime Minister, it was revealed yesterday, amid hopes the sector’s rising business volumes will offset the extra cost.

Robert Sands, the Bahamas Hotel and Tourism Association’s president, told Tribune Business the $50 per week increase announced by Philip Davis KC was “long overdue” while the January 2023 implementation date gives the industry “sufficient time to prepare” and adjust cost structures.

He added, though, that the upcoming $260 per week minimum wage cannot be “viewed in isolation” but is part of a broader cost package that needs to be lowered to ensure the tourism industry’s sustainable development and continued contribution to economic growth.

“We recognise that was long overdue.” Mr Sands said of the minimum wage increase. “We anticipated some increase in the minimum wage, so this does not come as a total shock. We will have sufficient time to prepare for it. It is mostly the line staff, entry level service staff for the most part, that will be impacted.

“I think you can say mostly the service area, which represents two-thirds of a hotel’s workforce. Anywhere up to two-thirds of a workforce in a particular hotel and casino will be impacted by this.” Workers in areas such as food and beverage, housekeeping and pool attendants typically receive the minimum wage as their base pay, but earn the majority of their income via tips and the 15 percent gratuity.

“Companies will still take a hit on this particular issue, although it was not unanticipated,” Mr Sands added. “The real answer is you don’t anticipate this level of increase, but we have always been resilient and it is a testament to our tenacity that we have weathered seemingly insurmountable challenges in the past. 

“We hope business levels continue to grow, we continue to grow our business, and that we are able to generate incremental business that helps us to navigate the adverse effects of this increase at this point in time.”

Pointing to the bigger picture, Mr Sands added: “We recognise the rising costs everybody is facing, but this cannot be viewed in isolation. We have to work towards ensuring the cost of doing business in The Bahamas is at a level that is sustainable, and contributes to economic growth and development for the country. We must work towards items that contribute to that.”

Again identifying renewable energy as a priority item, the BHTA president also reiterated previous calls for vacation rentals to pay their fair share in taxes and infrastructure upkeep to ensure the financial burden does not fall solely on the resort sector.

Darrin Woods, the Bahamas Hotel, Catering and Allied Workers Union’s (BHCAWU) president, told this newspaper that many resort industry staff impacted by the minimum wage rise will not enjoy the full $260 per week increase because they are not working a full 40 hours. Yet, even at 37.5 hours, some impact will be felt.

Suggesting that the increase will help more workers qualify for bank loans, he added: “I agree with the Prime Minister that the increase is long overdue. When we talk about from 2015 to 2022, that’s a long time in terms of having to wait.”

The BHTA, in a statement on the minimum wage increase, said: “The tourism industry, as key private sector partners with the Government and employers of similar scale, has been aligned with the Government’s perspective that an increase to minimum wage is due. The topic has been on the table for collective discussion between the public and private sector for some time.

“We are equally aligned with the Government’s acknowledgement and concerns regarding the myriad of unprecedented challenges we are facing due to forces outside of our control. We concur with and support the Government’s efforts to mitigate the adverse effects on our economy. Supply chain issues, ensuing product shortages and price hikes attributed to the pandemic, global inflation, post economic devastation exacerbated by past hurricanes is our harsh reality.” 

It continued: “The tourism industry – from bonefish lodges to local Bahamian restaurants, home-grown boutique bed and breakfast accommodations to mammoth-sized resorts – recognise the importance of curtailing the rising cost of living and doing business in The Bahamas as an essential element to our ability to survive, and eventually thrive as a key driver of our tourism economy.

“The topic of minimum wage is only one component of a holistic strategy that must be designed and deployed to achieve all that we collectively seek to accomplish – a thriving, resilient, sustainable, diverse economy that befittingly supports a population comprised of a diverse range of micro, small, medium and large-sized business owners, operators and employees, the public sector and quasi-public sector agencies and their employees.

“However, we encourage the Government to meaningfully pursue structural reform needed for the growth of our tourism industry and economy in general, such as the diversification in power generation, and to swiftly deploy initiatives designed to address long-standing issues that contribute to the high cost of doing business in The Bahamas.

“In addition, we support and encourage the Government’s efforts to ensure tourism participants who have been benefiting from but not contributing to the public purse are brought into the financial fold, so we may aptly share the weight of the financial burdens we bear as a nation today.”

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