For the fifth day in the last four weeks Sydney’s hospitality industry is facing the prospects of loss due to the prevalent Penalty Rates. The Anzac Day is the fifth public holiday in the last four weeks to have impacted the financial condition of the hospitality industry. In a recent survey by the Tourism Accommodation Australia NSW survey nearly 65% of the respondents claimed that the Easter Holidays had a major adverse impact on their businesses. Nearly 60% of the respondents mentioned that the penalty rates have caused them to lose money impacting their service offerings (restaurants being the segment that is the most hit).
During the Easter Holiday weekend public holiday penalty rates had been a major reason why more than half of the hotels and restaurants closed their shutters. With rising costs it was imperative that they maintained a balance during the four day long Easter holiday mentioned TAA NSW director Carol Giuseppi. Even for hotels that did not open their restaurants it meant a loss because of the cost of wages that soared during the long weekend. She also mentioned that double the time and half the rates is never a factor that can boost their competitiveness in the international market. She sounded pessimistic when she mentioned that the Anzac Day would be no difference. She insisted that the penalty rates must be changed considering the perils that the industry is facing as a result.
She also mentioned that the penalty rates are making hotel and restaurant businesses a loss making venture. The 24/7 nature of this industry means that employees working in this industry end up spending more time on the job during the nights and during weekends. But the current penalty rates, made applicable to the industry, is forcing them to work under-staffed severely undermining their operational capabilities and resulting in poor service to the guests.
She urged the Federal Government that the penalty rates currently imposed on the hospitality industry be reviewed and their nature of business be considered in order to remove them from the purview of this penalty clause which has been imposed on them along with the rest of the industry. She highlighted the fact that what is normal by the rest of the industry standards is not normal by the hospitality industry standards and vice versa. If the hospitality industry, mainly the hotels and the restaurants are going to be a major player in the economy, attract investments and continue to generate employment then the Government must consider a different industry specific wage-penalty structure.
It is pertinent to mention here that the accommodation industry is a major employment provider in NSW with more than 23,600 jobs (60% of which are Sydney based) and a further 41,546 jobs that are allied and depended on the core industry. The Australian Fair Pay Commission identified that wages amounted to 24 percent of the total business expenses which is significantly higher than the rest of the industry average at 15.8%. This makes the wage rates in hotels in Sydney to be 52% higher than the other industries.