Hotel workers agree to wage freeze extension

Hotel workers across the Island agreed to extend a wage freeze established a year ago, until June.

The agreement will help hoteliers ride out a rough winter.

Last year occupancy levels for the first four months ranged from 29 percent to 48 percent and John Harvey, chief executive officer of the Hotel Employers of Bermuda (HEB), said this year's projections for occupancy were worse.

In a letter to the Bermuda Industrial Union Mr. Harvey stated: "I can assure that every effort is being made by our sale and marketing committee to attract and secure more air arrivals to Bermuda and this will continue.

"Indeed, the bad weather our Island has experienced the last month has led to a number of flight cancellations, which has deepened our woes."

Yesterday BIU president Chris Furbert spoke at three meetings with hotel workers and explained the situation.

He said workers had been expecting the request, but many were concerned how long the wage freeze would last.

"Last year, when the wage freeze was first mentioned I told them it could last anywhere from 18 to 24 months," he said. "I still think that is the case."

Wages were frozen last February due to poor occupancy rates. At the time Government stepped in and agreed to waive payroll tax for hotel workers, thus ensuring employees would not suffer and hotels would also receive some much needed financial relief.

The wage freeze was expected to end next week, although Government's agreement to waive payroll does not expire until June this year.

However, with overall occupancy rates even lower in 2009 when they fell eight percentage points to 51 percent the HEB asked for the freeze to stay in place.

"The workers were not surprised," Mr. Furbert said of the 1,500 hotel employees he represents. "They have agreed to the freeze until June and then the HEB will have to see if Government will exempt the payroll tax. What I told workers today was as they are getting the payroll exempt, which is 4.75 percent, it is OK. The increase they would have been getting next week would have been between 2.5 and four percent.

"I think the Government deserves a lot of credit for the agreement that was reached last year. The Finance Minister worked with the HEB."

And Mr. Harvey added: "I am pleased the decision was made to extend the wage freeze and it is only with this ongoing co-operation and recognition of the present economic challenges that the hotel industry is experiencing will we be able to survive this difficult time in our history. We thank both the Government and the BIU for their support."

Asked about the prospect of extending payroll relief last week, Premier and Tourism Minister Ewart Brown said Government would continue to help hoteliers as long as it was in the Country's economic interests.