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Phuket resorts require guts to offer large tips in a competitive market

Phuket Wages: Secrets of the 10,000 Baht Bonus

Monday, September 15, 2008
STAFF at Phuket resorts are always comparing notes when it comes to wages, and especially service charges.

Lately, the talk has all been about the new northerly five-star resort that is dangling a carrot of enormous size to catch new staff.

While the tourism industry on Phuket is suffering because of the airport siege and the residual effect of the now-removed state of emergency, resort openings continue.

So does Phuket's battle with Samui. The hunt for quality staff has, if anything, grown more intense over the past few months.

Add to the mix the attractions of that other holiday island, Samui, where staff are in some cases housed in comfort that is almost as luxurious as that for guests.

Swimming pools, five-day weeks, staff buses . . . the list grows longer.

On Phuket, this one particular star resort brand has now upped the ante. Staff who join the workforce there are guaranteed a service charge fee of 10,000 baht a month.

Nearby, where a soon-to-open all-villa resort uses the same local pool for staff, the service part of the package has been fixed at 9000 baht.

There are plenty of other resorts and hotels on the island where that amount of money constitutes the entire wages plus tips package for each month, or even a little more.

It's a stellar sum. So the staff at resorts generally are eyeing this new high standard-setting with considerable jealousy.

We can only guess what the managements at other resorts are thinking, and we expect the expletives are flying.

The service package certainly adds a disturbing new pressure point on containing wages yet keeping key staff at a time when occupancy rates and revenue are under extreme pressure.

The hope is certainly that the Phuket high season proves to be a great success, as it has been in recent years.

Yet each week that the political turmoil drags on, high season bookings suffer. Travel warnings and uncertainty compound the problem.

With a little help from our embedded spy at one leading resort, Phuketwan has been able to delve into the intimate world of tips and service charges.

At the top, the new Everest for ambitious resort staff is the 10,000 baht being offered by the northerly resort. This applies, we have been told, to even a relatively lowly shop attendant.

Another newly-opened five-star Patong resort offers a minimum 5000 baht in service charges. In August, we are told, the staff there earned 6000 baht because business was good.

Another five-star at the southern end of Patong Bay offers a fixed 7000 baht service portion.

Along the coast at Karon, we are told that one big five-star usually pays an extra 10,000 baht in low season months, but this August was not so good and the payment dropped to 6000 baht.

Even that amount seemed pretty good to yet another Phuket resort, where the service charge is fixed. During low season, the staff are paid an extra 3000 baht a month.

From November to April, that rises to 6000 baht. If the resort is doing very well, the resort actually keeps whatever the takings are above that amount.

It's hardly a surprise, then, that resorts are reluctant to talk about this aspect of their wages policies.

But over time, as the Phuket prosperity cycle generally trends upwards, new carrots are being dangled in an effort to win quality staff in a competitive environment.

The five-day week, too, is a very appealing notion for people who are currently working six days.

Some resorts, usually at the traditional end of the market, generally regard any attempt to steal their loyal staff as an act of treason or sabotage.

Other resorts treat staff changes as an inevitable consequence of the current market and take steps to replace those who opt to go with properly trained and energetic youngsters.

For resorts with good brand names, the attraction for staff is often in adding that brand to a CV. Pressures on wages are not so intense if the brand is a trendy, desirable springboard to an even better-paid job in two years' time.

But if the brand wears thin and customers move on, then the management faces a rethink.

At present, though, the key approaches are:

..Blow competition out of the water with a huge salary package that fixes a high service charge, guaranteed all year long.

..Offer a fixed service charge element that varies from high season to low season, and allows the resort some cream in good seasons, at the cost of staff discontent.

..Let your staff benefit when income rises above the guaranteed minimums.

..Slip the staff whatever variables apply to the service income, without guarantees.

It's plain that while the shortage of quality staff is likely to continue, the opening of new resorts will push the top level of wages higher.

The risk is, though, that if the medium-term attractions of Phuket lessen, the first people to go will be the ones on packages that the management considers to be excessive.

Staff who are sacked under those circumstances are likely to be able to draw some perverse satisfaction: the managers who hired them at excessive rates are likely to be out the door before them.

Comments

Comments have been disabled for this article.

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Good thing I read this story after breakfast. Yuk pic!

Posted by Roberta on September 16, 2008 09:32

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USD 300 a month a stellar sum??? from resorts and hotels that can earn over an average of USD 1000 per room per night????? The hospitality industry has taken advantage of low salaries for decades throughout Asia and perhaps the quality of properties are starting to suffer on a global scale. Maybe by increasing the income of Thai hospitality workers we could attract a higher calibre of employee and raise the standards of service and communication. Perhaps then you will even have more Thai General Managers on the ferang salaries that are far more outrageous in comparison. Maybe it is just time to give a little bit back...

Posted by Tony on September 21, 2008 15:47


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