Penalty rates are crippling businesses over the Easter holiday with many set to close and reduce services in a move to avoid losing money.
Two thirds of hoteliers quizzed in a survey said they had no option but to shut some outlets as they simply could not afford to penalty rates of up 275% on Good Friday and Easter Monday.
More than eight out of 10 admitted that closing could damage their image. But the alternative was to lose money, they said.
Rodger Powell, managing director of Tourism Accommodation Australia (TAA), which commissioned the survey, said employees, as well as businesses, will suffer. And failing to provide a full service to consumers during a holiday period could see a “return to the dark ages”.
“Current employees are not earning penalty rates now because the hotel venues are closed,” he said. “If penalty rates were dropped or lowered to a point where hotels could service guests and still make a profit, then hotels would employ more people to cover the jobs on those days with no disadvantage to existing employees.”
When asked whether they would employ more staff if penalty rates were lower, 81% of respondents said they would.
It illustrated that excessive penalty rates simply prevent businesses from making money and staff from earning a wage, Powell said.
“The level of penalty rates is not benefitting anybody because hoteliers are reducing opportunities for workers simple because it isn’t economic for businesses to open their doors when labour costs are so high,” he said.
They survey revealed that of those hotels intending to keep outlets open on Good Friday and Easter Monday, only 13% expect to make money, 54% to make a loss and 23% to break even.