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Hotel labour market in crisis?
The tourism and hospitality industries are now our biggest export
earners and require a robust, plentiful work force but currently its
supply is looking compromised, especially in the hotel sector.
Things are looking rosy for New Zealand’s hospitality industry,
with record numbers of tourists coming into the country, and
those numbers are tipped to increase.
There’s excitement around the special features New Zealand
offers – its stunning scenery, unrivalled extreme sports activities,
a slower, more “real” pace of life, and hospitality, food and wine
that’s pretty much second to none.
Capacity is growing in New Zealand’s hotel industry too, with
1500 hotel rooms in Auckland tipped to come on stream by 2021
and new properties scheduled for Wellington, Christchurch,
Queenstown and Dunedin.
As well as the general shortage of staff for cafés, restaurants
and bars, there’s a lack of employees going into the hotel industry
and “it’s desperate for staff,” according to AUT’s senior lecturer in
Hospitality, David Williamson.
With tourism and hospitality the country’s most significant
industries, it needs the infrastructure behind it and Williamson
has been looking into why the hotel labour market that feeds into
it isn’t looking so healthy, especially in the regions.
As part of his PhD thesis, Williamson carried out an
independent study of wages and hourly rates in the hotel industry
from the post war period up until 2000, discovering a big drop
in real wages, falling by 24 per cent from 1980 to 2000. While he
hasn’t carried out research since 2000, he doubts the rates have
moved upwards significantly.
Williamson says several industry insiders he’s spoken with
believe unless hotel workers are given a better deal and job
packages are made more appealing, soon there could be serious
WHAT HAS CHANGED?
The Tourist Hotel Corporation was established in 1955 to manage
and run the government’s hotels, and encourage the development
of hotel tourism in New Zealand aimed at international tourists,
as few domestic tourists stayed in hotels then.
From 1957 to 1979, wages rose in real value by 38 per cent,
according to Williamson, “This was in the era of strong unions
and award bargaining and things are now considerably worse for
front-line hotel employees.”
He carried out further research on HR in hotels which was
introduced in 1990 when the THC was privatised, and anti-union
management was introduced, just as the country was sailing into
recession, “Awards were dismantled, unions removed and there
was a strengthening by management of an anti-union attitude.
Today, the labour market comparatively is not receiving a fair shake
of the stick,” says Williamson. “These companies ask a great deal
of these employees but it seems there’s very little loyalty coming
back the other way.”
With the Tourism Industry Association’s goal of reaching $43b
in revenue by 2025; staff numbers to facilitate that growth need to
grow phenomenally. According to the TIA’s People & Skills Report
2025, 47,000 extra staff are needed in the next decade and given
existing labour shortages, the industry’s rightly concerned.
Williamson says, “That’s 50 per cent growth in the labour
market needed, and it’s actually more in the regions where
there’s a 50 per cent growth in tourism employment needs
against a drop in working age population.”
Another factor of concern in New Zealand’s current hospitality
climate is the unprecedented number of Migrants coming into
the industry on temporary visas. “Thirty per cent of all new hires
in tourism are Migrants and many senior managers in the hotel
industry are saying if it wasn’t for these workers, they couldn’t
operate the hotels. Is this the way to go, because it raises
questions about the authenticity of the tourism experience for
visitors,” asks Williamson.
TIA hotel sector manager Sally Attfield agrees there are
some regions where hotels are finding it difficult to get the
right staff, due to factors outside the sector’s control, like low
unemployment, lack of housing or strong competition from other
parts of the job market. “However, the sector is putting in place
a range of short, medium and long-term solutions to staffing
issues, both in hotels and the wider tourism industry.
“We certainly don’t agree with the use of the term ‘crisis’. With
the very strong growth the tourism industry is experiencing, issues
inevitably arise in areas like people and skills. Many hotels are
having to work harder to get the right staff. But it is not a crisis.”
Issues for workers such as paying high rents while
earning the minimum wage and living in expensive tourist
hot spots like Queenstown, are creating real supply
challenges for the industry.
BY JES MAGILL
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