Cehat and Hostelería de España warn of a "serious impact" from rising labor costs

International news
The reduction of working hours to 37.5 hours a week, whose draft bill was approved Tuesday by the Council of Ministers, could cause a 3% drop in turnover in the tourism and hospitality sector, equivalent to 5,099 million euros a year, according to the Spanish Confederation of Hotels and Tourist Accommodation(Cehat) and the Spanish Hotel Industry.

Both employers’ associations have warned that this measure “will especially penalize micro-enterprises”, which represent 94% of the companies in the sector, in addition to generating a direct wage impact of 2,538 million euros in more than 300,000 hotel and catering companies.

According to data provided by employers’ associations, the hospitality industry is a sector based on presence, where productivity depends directly on the availability of workers. Therefore, the reduction of service and production time in establishments will directly affect income, since fewer customers will be served in the same amount of time.

In addition, the wage cost for the sector will increase by more than 2.5 billion euros, which is added to the recent increase in the minimum wage (SMI) and social contributions, generating a context of high economic pressure for companies.