The real price of luxury | Daily News

The real price of luxury

Behind some of Sri Lanka’s nicest hotels is a bleak situation for workers:
Hotel workers protest for higher wages and better working conditions. (File photo)

Ruwan Gunaratne* has worked behind the bars of luxury hotels for nearly three decades. He started learning his trade in five-star hotels in Colombo, and then spent a few years in the Maldives before moving back home to his family.

Now, he is a shift captain at a seaside hotel just outside Colombo, mixing tropical cocktails and managing a small bar staff.

In all those years of work, Gunaratne has mastered English, and the recipes for hundreds of cocktails. But he doesn’t have much money to show for it.

When he started his recent job five years ago, he said he made about Rs. 10,500 a month as his base salary. But now, despite years of service and increases in the cost of living, he makes just over Rs. 18,000.

“I have three children and a wife to support,” Gunaratne said in a recent interview. “How is that enough?”

He said it can often feel like he lives “two lives.” On some nights, tourists run up bar tabs way over the amount he makes in a month.

Of course, Gunaratne and other hotel employees don’t only earn a basic salary. Each month they get a cut of the service charge the hotel collects.

And although the service charges can be good, sometimes as much as Rs. 25,000 to Rs. 30,000 in the peak months, they fluctuate with the season.

The steady money, and the amount from which the EPF and ETF retirement funds are calculated, is barely enough to live on, he said.

“Tourism is the number one industry in Sri Lanka,” Gunaratne said. “But there’s a dark side.”

Even as hotel owners and tourism promoters laud Sri Lanka’s growing hotel industry as a job creator, workers say that on the ground, the situation actually looks very different.

Luxury hotels, poor wages

Colombo and Sri Lanka’s tourist hubs are changing. The new five-star Shangri-La Hotel rises above Galle Face Green, its workers in their neatly pressed uniforms greeting foreign guests

Everything from small guesthouses to international chains like the Marriott dot the coasts, accommodating the growing hoard of tourists flying into Sri Lanka.

Last year, that number climbed to over 2 million, according to the Tourism Development Authority, up from about 650,000 in 2010.

The industry supporting those guests employs over 150,000 people directly, and another 200,000 indirectly, government statistics show.

But the work conditions of the staff at these glamorous vacation spots can be deceiving, workers and advocates say.

“This is our problem, not just my problem,” Gunaratne said.

Inter Company Employees Union General Secretary Janaka Adikari, whose union represents workers in private hotels, agreed.

“These hotels and new chains are coming, but the situation of the employee in the hotel industry is a sad one,” he said.

“Even in the five-star hotels, the employees’ situation is very poor, they are suffering,” he added. “The only benefit there is that they are working in an air-conditioned environment.”

Adikari said the fundamental problem is the division between basic salaries and service charges. Under the current wages ordinance, hotels have to pay their employees above a minimum of Rs. 6,900 a month – a number so low that most hotels don’t even pay it anymore, he said.

A pretty standard starting wage, according to interviews with hotel workers, activists, and industry representatives, is Rs. 12,000.

Service charge varies by the season, peaking from November to February.

But the major issue with this situation is that EPF and ETF are calculated only from the basic salary. So even if someone makes Rs. 37,000 in a good month, only the basic salary of Rs. 12,000 is used to calculate the retirement contribution.

Because of this, employees often get caught in a “service charge trap,” said Shafeek Wahab, a long-time hotel industry consultant. They manage their salaries over their career, he explained, but when they retire, they find that they have basically nothing to live on.

Another issue is that banks only consider the basic salary when people apply for loans.

Employees often report having trouble applying for home and vehicle loans, as banks usually won’t account for service charge as a part of their income.

Wahab said most employers are very aware of the problems this payment structure creates. “The hoteliers are taking advantage of the employees,” Wahab said.

According to him, the owners don’t want to change the system “because it comes out of their bottom line.”

A different problem for the owners

Some hotel owners say they are open to the idea of using the service charges to raise base salaries.

“To incorporate the service charge into the salary is an important task,” said The Hotels Association of Sri Lanka (THASL) President Sanath Ukwatte.

Ukwatte, who is also the Chairman of the Mount Lavinia Hotel Group, said that the association had also discussed a different mechanism to improve retirement benefits.

He said they are considering paying a quarter month’s salary as retirement benefits for each year of continuous service of permanent staff, from the 10th year onwards.

Yet even as workers protest their low wages, the hotel owners say they are facing another problem, and one that’s affecting the health of the whole industry: they can’t find enough workers to fill vacancies.

“This is the biggest challenge we face at present in hotel operations,” Ukwatte said.

He said that even though the Sri Lanka Hotel School and other private training schools were graduating people every year, the amount of new trained workers “is just not sufficient for the industry, even today.”

A compounding problem is that many of the young people who train in hotels in Sri Lanka immediately move to the Gulf states, where they can earn better salaries.

Gunaratne, the bar manager, said that as a shift captain, he trains between 20-26 people a year. According to him, most of them immediately move to the Middle East to work in the hotel sector there.

“This is an absolute pity,” Ukwatte said. “There are many jobs available here in Sri Lanka in the hospitality and the tourism sector, with opportunities to rise to senior management positions.”

“But people still go out to the MiddleEastern countries and seem happy to do the same job for years without any growth in their career,” he added.

Wahab said he believed the two realities – low wages and high vacancies – were related. “People don’t find the salary attractive,” he said. In places like Qatar and Dubai, the base pay is just better.

Wahab said raising the base pay in Sri Lanka could keep people back home. But he said the industry also needed to better market itself as providing long-term, stable careers with upward mobility.

“I think the industry is not making an effort to demonstrate to the public that it’s an industry that has a lot of opportunities,” he said.

Raising the base wage

As far as the government is involved, the Labour Department’s Wages Board recently made a move to raise the minimum wage for the hotel and catering trades.

The new base wage of Grade I employee, meaning jobs like dishwashers, bar labourers, and cloak room attendants, would be Rs. 10,000 for the first year. The Wages Board also allots a Rs. 2,500-a-month budgetary relief allowance.

Asked how they had determined the new minimum wage in an interview, Labour Commissioner for the Labour Standards Division, Janaka Paranamana said the Wages Board had consulted employers and employees’ unions. “In the past it was too low,” he said. “Now the minimum wage is a living wage.”

But Janaka Adikari, the union secretary, disagreed. “It’s not sufficient, it’s not good,” he said. “At least a percentage of the service charge needs to be considered as a part of the salary.”

Until that happens, he said he believed the situation for hotel employees would not change. He said his union would continue “picketing and emphasising this issue to society and the government.”

For Gunaratne, back behind the bar, these political manoeuvres are not felt.

It’s now July, which means it’s the low season, and money is tight again. He said that on a recent afternoon, he only made Rs. 120 at the bar in tips.

Gunaratne said he notices the country changing, especially the influx of luxury hotels in Colombo.

“There are all these hotels,” he said. “But who would want to work there? I have two sons and one daughter,” he added. “I tell them not to work in hotels.”

(*Gunaratne requested a pseudonym for this article.)

 


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