Two-thirds of Australian hotels to cut services at Easter to avoid paying penalty pay of up to 275 per cent

MORE than two thirds of Australian hotels will close or slash services over Easter to avoid paying public holiday penalty rates.

The Metro Hotel Sydney. Metro Hotels will be cutting back services at its 14 properties A

MORE than two thirds of Australia’s hotels will shut their doors or slash services during what should be a bumper Easter holiday period because they have to pay penalty rates of up to 275 per cent, a key industry group warns.

The most common services to be chopped will be restaurants, bars and housekeeping, according to a survey by Tourism Accommodation Australia, which represents some of the country’s largest hotel groups.

India Bennett with Camillo Crugnale, the owner of Assaggio Ristorante at Hyde Park, Adelaide, which is closing for the public holidays. Picture: Noelle Bobrige

It comes as large numbers of Australians prepare to make the most of Easter and Anzac Day falling just a week apart to take an extended break.

However, unions argue hoteliers are using the Easter break as an excuse to lobby for the pay and conditions of poorly-paid and vulnerable workers to be slashed.

TAA managing director Rodger Powell said that despite figures showing 14 per cent of Australians are planning to maximise the Easter and Anzac Day double-holiday-hit to take an extra-long break, hotels would be unable to capitalise.

“This should be a prime-time holiday period, but with the current penalty rate regime we will just be working but won’t be making a profit,” he said.

“It doesn’t make sense for anyone’s business.”

The survey, which polled hoteliers in all states and territories and included tourist hot spots, found 67 per cent will close outlets or reduce services because of penalty rates.

Asked which venues or services would be most affected, 74 per cent said restaurant services, 57 per cent pointed to housekeeping, 53 per cent nominated bars and 41 per cent said room service and food.

TAA members include Hilton Hotels & Resorts, Crown Hotels & Retail, Hyatt Hotels & Resorts and Pan Pacific Hotels.

While acknowledging this was likely to upset customers, Mr Powell said it was unavoidable, as 54 per cent of hoteliers were staring down a loss and only 13 per cent were likely to turn a profit.

He blamed this on public holiday penalty rates as high as 275 per cent for casual workers under the Hotel Industry (General) Award, and 250 per cent for permanent staff on Good Friday and Easter Monday — which are public holidays in all states and territories.

David Perry, the CEO of the Windsor Hotel in Melbourne, which is bucking the trend to put on more staff to cater to Easter demand.

He said the current regime also disadvantaged workers.

“I think the key thing is that because these places are closed, current employees aren’t getting penalty rates and the option of opening the business and employing other people for those days is also lost,” he said.

However, United Voice, the union that represents hospitality workers, described TAA members’ views as “an attack on Australian values and the Australian way of life”.

Assistant national secretary Sharron Caddie said workers needed to be adequately compensated for working when other people were spending time with family and friends.

“Today’s attack is part of a push by big business and Tony Abbott to change all of this,” she said.

“They want to get rid of weekend and public holiday rates. They want the freedom to make bigger profits, regardless of the cost to the community.”

Current permanent award rates within the accommodation industry start at $16.85 per hour for a food and beverage attendant or housekeeper, $19.07 per hour for a chef and $20.80 per hour for a head chef.

This jumps to $42.125 for a food and beverage attendant or housekeeper, $47.675 for a chef and $52 for a head chef on Good Friday and Easter Monday.

Casuals get an additional loading, while some states also include Easter Saturday, Sunday and Tuesday as public holidays.

“The accommodation industry has great difficulty attracting and retaining staff: the work is very demanding and is low paid,” Ms Caddie said.

“Without weekend, night and public holiday rates there would be a massive exodus of workers from the industry. They would not be able to get workers to do this work.”

Sydney-based Metro Hospitality Group chief operating officer George Bedwani said the company, which runs Metro Hotels and Apartments, would be cutting back on services at its 14 Australian properties across the Easter long weekend.

This includes not offering lunch, not opening room service and reducing the number of staff.

Mr Bedwani said penalty rates should be reduced to make it profitable to operate on public holidays.

The survey said 81 per cent of hoteliers would employ more people if penalty rates came down.

“We are all willing to adapt,” he said.

“We don’t want to hurt the staff, but this is not logical.”

Camillo Crugnale, from Hyde Park fine-dining restaurant Assaggio Ristorante in Adelaide, said he had stopped opening for public holidays at the beginning of the year because he couldn’t make any money.

“We can’t afford to open because it’s too expensive,” he said.

However, David Perry, the chief executive at The Hotel Windsor in Melbourne, said his hotel was actually putting people on over public holidays such as Easter to cater for increased demand for services such as its afternoon tea sittings.

“There are winners and losers in everything, it’s how quickly you adapt,” he said.

“If anything, we often ramp things up.”