Service charge row continues silently

BY B. M. DAHAL

With the date of the Essential Services Act expiring in four weeks (during the third week of September this year), clouds of uncertainty have again started looming large in the minds of the tourism entrepreneurs, especially hoteliers. About five months back, the government brought the hotels, motels and restaurants under the Essential Services Act as the hotel workers began their shut down strike to pressurize the entrepreneurs and the government to introduce a 10 per cent service charge.

The country’s tourism industry, which has suffered from various problems one after another, might be in for yet another setback if the government, hoteliers and the hotel workers are unable to settle the issue permanently through dialogue.

The government was compelled to slam the ban on hotel workers’ strike as they had even rejected the recommendations made by the high level committee led by Prithvi Raj Ligal, Vice-Chairman of the National Planning Commission (NPC). They had their shut down strike planned for an indefinite period. The committee had asked the government to bring the hoteliers and the workers across the table for negotiations but hotel employees were adamant in their stance.

After the hotel industry was brought under the Essential Services Act, both the hoteliers and hotel workers have shown serious interest to solve the problem once and for all through talks. The hotel unions seem to be more flexible in their stance now.

"Since the country’s tourism industry is in a disappointing state, the government has to make positive decisions to revitalize it. The sick tourism industry certainly needs positive attitude from all the other stakeholders as well," says Narendra Bajracharya, President of Hotel Association Nepal (HAN).

Bajracharya says that the hotel bookings are being cancelled even for the upcoming autumn as the security problem has yet to be addressed fully.

"As the government has realized the problems of tourism well, we are hopeful that it will take necessary measures for the protection and promotion of this sector," he says.

He, however, says that HAN and its members are seriously thinking on how to settle the longstanding problem of service charge permanently.

Hoteliers have been saying that the service charge may have adverse impacts on the overall tourism industry as it makes the packages more expensive. They also argue that Nepal will be unable to compete with the other destinations in South Asia once the packages become expensive.

Ajay Ratna Sthapit, Honorary Secretary of HAN, says that the hotels and unions have been holding talks at the institution level.

"HAN is also approaching the government and the unions to seek ways to address the service charge issue," Sthapit says.

He is of the opinion that the hoteliers and the workers have to hold extensive discussions to settle the problem.

Madhav Neupane, President of Nepal Independent Hotel Workers’ Union, says that hotel employees’ unions want to resolve the dispute over the service charge through talks.

"Keeping in view the declining trend of tourist arrivals at present, we are alert that tourism should not suffer further due to our activities. We have realized it," says Neupane, who is also the member of the Joint Struggle Committee of the two hotel unions.

"But we cannot withdraw our demand. As 10 per cent service charge issue has become a broad based issue, we want the commitment of the government as well as the hoteliers," he says.

He, however, says that a compromise could be reached through talks. "We want the government to set the date for the introduction of the service charge. We are ready to reach an understanding regarding the service charge."