Tourism sector needs IR reform

You may have noticed how difficult it has become to get a single night’s accommodation during weekends in Australia, particularly via Wotif. And in yesterday’s Sunday Mail I noticed a large advertisement for two night weekend packages by Rydges, and it appears hotels are pushing us into staying two nights or not at all. While partly this may be good marketing, it may also reflect the impacts of the Fair Work Act, according to Queensland Tourism Industry Council chief Daniel Gschwind

Mr Gschwind gave an excellent presentation to the NCVER national research conference I attended last week in Mooloolaba on Queensland’s Sunshine Coast. While he talked a lot about China, and the prospect of 100 million Chinese travelling internationally in a few years time, he also noted that an important issue for the tourism sector is workforce flexibility, which made me wonder how the sector was faring under the new IR laws that replaced WorkChoices. Hence I asked Mr Gschwind a question regarding the impact of the Fair Work Act, and he noted it is a major constraint on the industry. With the sector unable to avoid paying penalty rates, as it could under WorkChoices, its labour costs have risen significantly on weekends. This has had a number of effects, including:

  • many hotels are refusing to book people in for a single night over the weekend, as they want to avoid the extra labour costs of refreshing rooms for new guests where they can; and
  • many restaurants are not opening during weekend times they traditionally opened (e.g. some may have previously opened Sunday night), not because of a lack of demand, but because labour costs are so high that it wouldn’t be economically viable to open.

These impacts are readily verifiable and add support to the need for a new review of the operation of our IR laws.

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6 Responses to Tourism sector needs IR reform

  1. Craig Wilson says:

    Gene, I think this needs fleshing out. sure, high labour costs. but how much of that can be sheeted home to IR…?


    • The Happy Hillbilly says:

      Workchoices ran for three years – penalty rates were standard beforehand for a long time. They are not facing any new costs in penalty rates that they did not previously have to pay.

      • Gene Tunny says:

        Yes, good point. I suppose the industry would argue that there are a whole lot of cost pressures on the sector (increasing rents & utility bills) and the new IR arrangements have added to other cost pressures to make a few previously economic activities uneconomic. However, I think I’ll need to do some more research on this. Thanks for your comment.

    • Gene Tunny says:

      Yes, I agree I need to look into this a bit more, hopefully in a future post.

  2. Katrina drake says:

    100 million more Chinese international travellers ! See the world now before the queues get way too long. That will take some organisation.

    • Gene Tunny says:

      Yes, see the popular places now while you can. I expect the market for quirky, unique experiences will continue to grow, catering for people who don’t like the crowded traditional tourist places.

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