Hotel owners urge Rody: Veto service charge bill

Hotel owners have urged President Duterte to veto Senate Bill 1299 and House Bill 8784 or the Service Charge Bill, which will give 100 percent of service charge to employees, as they claim that it would impact the cost of doing business in their sector.

In a letter to Duterte, Philippine Hotel Owners Association Inc. president Arthur Lopez pointed out that PHOA and

the Hotel and Restaurant Association of the Philippines were informed in a House of Representatives hearing that 90 percent of the service charge will go to the employees while the remaining 10 percent will be for losses.

“Both organizations were not consulted in the hearings of the Senate, which approved a 100 percent distribution to employees and supervisors,” Lopez told Duterte.

Lopez said the passage of the consolidated bill will cause an increase in the cost of doing business due to the absorption of losses and breakages by the business and the service charge to managers will have to be paid as incremental payroll.

He added that an increase in cost might constrain hotels to reduce their workforce, which could impact the country’s unemployment rate. The passage of the law, Lopez said, may also lead to reduced competitiveness and investors’ confidence due to the higher cost of doing business in the country as well as cause an exodus of talents and higher rates that would out-price the industry in the Southeast Asian region.