service charge row

Trade unions give 3-week ultimatum to hotels

Published On: January 23, 2017 09:24 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 23: The row between the hoteliers and trade unions will hit the  tourism sector hard, if the  government does not intervene immediately, Hotel Association of Nepal (HAN) has warned.

Organizing a press meet in Kathmandu on Sunday, HAN said that the trade unions have given ultimatum to provide them entire 10 percent service charge amount.

Claiming that the agreement between HAN and unions -- some 11 years ago -- to share the service charge was not in favor of the workers, the trade unions have announced protest programs from Sun day. “If our demands are not met, we will be forced to announce more stricter protest from February 12,” a ultimatum letter by the trade unions reads, adding that they have started their protest programs from January 22.

“But the ultimatum given by trade unions could hit the tourism sector hardly as it has just started to pick up again,” President of HAN Amar Man Shakya said Speaking at a press meet organized by the HAN on Sunday. 

 Shakya also said that tourists planning to visit Nepal will cancel their booking and will change their travel plan and go to other countries, if there is disturbance in the tourism sector. “It will directly affect the tourism sector,” he said, adding that the service tax should be charged only after providing quality facilities to the customers. “Making the service charge compulsory has already passed a bad impression to both domestic and foreign tourists.”

In 2006, HAN decided to levy 10 percent service charge compulsory from the customer’s after the trade unions and employees pressurized the hoteliers to charge customers. According to the agreement, the amount thus collected from the service tax would be shared between employees and hotel.

The hotel management has been taking 32 percent of service charge to maintain and improve its facilities and service and employees are  getting the remaining 68 percent of the total service charge. But the trade unions have been asking for all the service charge, recently.

The number of tourists travelling to Nepal has started increasing after the massive earthquake in 2015 and the economic blockade imposed by India. 

In 2016, more than 700,000 tourists visited Nepal which is around 200,000 more as compared to 2015. But the disturbance in the tourism sector will again push the number of arrivals.

The association also informed the government of the unions demand that is going to hit the tourism sector very hard, Shakya added.

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