A nationwide daily minimum wage hike, effective January 1, is driving hotels in Chiang Mai to increase staff responsibilities rather than expand permanent workforces, while small hotels in Chon Buri may face financial strain due to rising costs, according to industry associations.
The cabinet approved the wage hike, setting rates between 337 and 400 baht per day. Key tourist destinations like Chon Buri and Phuket were assigned the maximum rate of 400 baht, while Chiang Mai’s Muang district settled at 380 baht.
Paisarn Sukjarean, president of the Thai Hotels Association’s northern upper chapter, noted that most hotels in Chiang Mai already offer wages above the minimum, bolstered by service charges that elevate daily earnings to 500-600 baht. The new rate is expected to raise costs by 3-5%, but a strong tourism season should mitigate the financial impact.
“Tourism has surged this high season, and accumulated revenue should cushion the low season ahead,” Mr. Paisarn said. However, with labour shortages persisting, hotels are opting to redistribute tasks among staff instead of increasing headcount, moving beyond the typical staff-to-room ratios of 1:1.5 or 1:2. Some establishments plan to rely on casual staff during peak periods to avoid permanent welfare costs.
In Chon Buri, where small and medium-sized hotels account for 20% of accommodations, the higher minimum wage may pose significant challenges. Thanet Supornsahasrungsi, president of the Association of Chonburi Tourism Federation, emphasized that smaller establishments with low room rates are particularly vulnerable.
“Staff expenses represent 35% of operational costs for most hotels,” Mr. Thanet explained, adding that high-end hotels in Bangkok, with higher room rates, benefit from economies of scale, unlike their counterparts in tourist provinces.
He also urged the government to consider more flexible wage structures based on market demand, alongside investment in labour reskilling and upskilling. Operators are prepared to offer higher salaries to employees with advanced skills, such as foreign language proficiency.
Both officials highlighted the need for government support to stabilize operational costs, including electricity and fuel prices, to ensure the sustainability of the tourism sector during these adjustments.
