Report Thai Hotels Warn of Job Cuts Amid Proposed Wage Hike

[snoop1130]

Photo courtesy of Bangkok Hotels & Resorts

 

The Thai Hotels Association (THA) has expressed serious concerns about potential mass layoffs in the hotel industry if the government goes ahead with plans to increase the daily minimum wage to 400 baht next week. The association has urgently appealed to the prime minister, seeking to halt this proposal.

 

La-iad Bungsrithong, an advisor with the THA, pointed out that five-star hotels in Chiang Mai have already felt the pinch after a 14% rise in wage costs since last year when the 400 baht minimum wage was first introduced. This change initially affected major tourism hotspots such as Chiang Mai and Phuket, where hotels adjusted wages twice this year alone.

 

Starting 1st July, the Labour Ministry intends to enforce this wage increase on two-star hotels and those with more than 50 rooms. For Chiang Mai, this means a jump from the 2024 minimum of 350 baht, marking a more than 12% hike. Other destinations like Chiang Rai and Phang Nga might experience a 13.6% increase, the THA reports.

 

La-iad emphasised the struggle faced by upper-scale hotels to manage their operational costs. With wages potentially making up 35-45% of expenses, including benefits, the timing of this policy is seen as problematic, especially during the low season and amidst rising energy costs triggered by geopolitical tensions in the Middle East. Hotels may be forced to cut staff due to insufficient revenue to meet these rising costs.

 

THA Southern Chapter President, Suksit Suvunditkul, highlighted that provinces with lower current wage rates, particularly in the Deep South, could be hit hardest, facing an 18.7% rise. The low season only exacerbates the challenge, compounded by a dip in visitors from China and the Middle East.

 

In Phuket, hoteliers have previously adapted to the wage increase, raising pay for 30% of staff and adjusting for experienced workers, resulting in a 60% total wage increase. Suksit noted that payrolls often represent 25-30% of operational costs in the high season, potentially soaring to 50% during quieter months, threatening further layoffs and instability.

 

Despite the pandemic’s impact, reducing staff numbers, hotels now prefer to employ multi-skilled individuals. While using casual staff allows flexibility, it doesn't necessarily cut costs due to the need for training to maintain service standards.

 

The THA appealed last week for reconsideration of this policy, citing the potential 10-15% rise in operational costs amid a sluggish economy as unmanageable. The association continues to push for solutions that balance fair wages with sustainable business practices.

 

  Adapted by ASEAN Now from The Thaiger 2025-06-24

 

 

[blaze master]

Why would they be cutting jobs when agoda searches are soaring.