Editorial | Beyond the hotel strikes

The recent wave of work stoppages at Jamaican resort hotels have subsided. It is however unlikely that the causes of workers’ disgruntlement have been fully resolved.

Large swathes of the industry’s employees, especially those at its lower rungs – like those who clean the rooms, manicure the lawns and wait on tables – believe that they are paid too little and are dissatisfied with their working conditions.

In that regard, neither the government nor the industry’s owners, especially those that were hit by the strikes, should take the return to calm for granted. Instead, it should be seen as an opportunity to engage in a frank, and full, discussion of tourism’s, and the hotel sector’s, role in a growth-oriented Jamaican economy, including, what, in this context, is adequate compensation for hotel employees. In other words, the dialogue should be part of a larger discourse on fashioning an industrial policy, in keeping with Prime Minister Andrew Holness’ November declaration of his administration’s pivot from a sole occupation with macroeconomic stability to an emphasis on sustained and robust growth.

On the immediate question of wages, Mr Holness has also signalled his administration’s sympathy for the workers’ cause, which should make efforts on that front a less acrimonious affair going forward.

“We will do our part to facilitate negotiations and to ease the cost of living burden on the workers in the tourism industry,” he said in a November speech, in which he also announced the removal of income tax on gratuities to tourism workers.

The PM’s declarations, on their face, are positive developments, but they require greater clarity. For what the government’s ‘facilitation’ of the negotiations ought not to be is an insidious State paternalism, or the Government’s intercession with the owners in a way that effectively sidelines or undermines the agency of workers or their representatives.

Governments sometimes act in this way with presumably good intentions: insulating skittish investors from perceived scrappy trade unions. But this approach, in the long run, is usually worse for industrial relations. In the absence of regular and serious employee representation, vexed issues simmer, then boil below the surface, until, as happened in October and November, they erupt.

There is no question about the importance of tourism to Jamaica’s economy. In 2023 it accounted for 6.5 per cent of GDP and employed around 113,000 people, or over eight per cent of the employed labour force.

Critically, the island grossed an estimated US$4.38 billion from its nearly 4.2 million visitors (approximately 70 per cent of them stop-over tourists as opposed to cruise ship passengers) of which, by government estimates, approximately 40 per cent is retained domestically. In other words, over US$1.75 billion stayed in the island, thereby making tourism, in net terms, Jamaica’s second largest earner of foreign exchange, after remittances, which in 2023, brought in US$3.37 billion.

While negative US government travel advisories and hurricanes this year created a few bumps for the industry after its robust post-pandemic recovery, the government insists that the underlying industry remains strong and poised for continued growth well into the long term.

Indeed, in mid-December Princess Hotels and Resorts opened two adjacent properties, with more than 1,000 rooms, in Negril, in the west of Jamaica, becoming part of a growing list of Spanish chains that have entered the market of the last two decades. Princess promised to add a casino to its Jamaica offering.

It is reasonable to assume by their keenness for the island that these investors, from Spain and elsewhere, find Jamaica a profitable market. Otherwise they wouldn’t continue to bring new investment, or expand their operations here.

UNFAIR WAGES

But as recent events have shown, many of their Jamaican employees don’t believe that they are paid fair wages, or that the conditions under which they are employed are good.

Obviously, Prime Minister Holness agrees.

There are no readily available reliable data on salaries in Jamaican hotels, or comparisons with regional counterparts. Few, if any, tourism operations in the island are unionised, and most employees are on fixed-term contracts.

However, the website of the compensation analytics company, ERI Economic Research Institute (ERI), places the average base salary for Jamaica hotel workers at over J$1.8 million. The compensation of technical and supervisory staff would probably weigh, compared to the lower level line employees like those who were involved in the recent strikes.

Indeed, housekeeping staff at Bahia Principe, a Runaway Bay, Ann – one the first properties to face protests – said they received a basic salary of J$37,000 fortnightly (around US$6,000 annually). Gratuities would unlikely take wages much higher, even with the removal of income tax from those earnings. Indeed, most of the workers who struck don’t meet the J$1.7 million threshold of annual income to pay income tax.

After the stoppages workers were promised top-ups, but these appear to be stop-gap interventions, facilitated by the tourism minister, Edmund Bartlett, rather than outcomes of bargaining between employer and employee.

Noticeably, none of the major Jamaican-owned hotels were hit by the recent unrest. It is not clear what this says about the state of industrial relations at these operations. Perhaps there are lessons to be shared with their foreign-owned companies.

More significantly, though, the tourism industry will probably discover that there is nothing inherently antithetical in companies engaging in collective bargaining with trade unions as part of a mature partnership in which the latter pursues fair wages, but also appreciates a converged interests between employers and employees in order for both to thrive in a competitive global economy.

This is also part of the stratagem of the industrial policy aimed at pushing tourism further up the food chain of global efficiency and exploiting its potential for linkages with the rest of the economy.