Here here!! For pete’s sake give them the 30 cents. Seriously? They are simply asking for a raise, not an arm and a leg.

Having to go to mediation for a 30 cent per hr. increase in pay is a complete joke. Someone needs too wake up.

0.30 cents per/hr times 8 hrs/day = $2.40

$2.40 times 5 day/week = $12.00

$12.00 times 4 weeks/month = $48.00

$48.00 times 100 employees = $4,800.00/month

$4,800.00 times 12 months = $57,600.00/year

That’s some pretty simple math, doesn’t include the cost to make that nearly $60,000.00 extra to pay out, also doesn’t include CPP, EI and all other employer contributions.

Not taking sides, but 0.30 cents can add up to quite a burden on businesses.

Does anyone know anything about how hotel operating costs break down, that is, what percentage goes to labour, etc.?

To obtain some sense of proportion, the Coast Inn has 157 rooms which rent for a minimum of $149 per night. The provincial average occupancy rate is about 70%. If the Coast Inn does that well, it has an average daily income from room rental of at least $16,375. There is probably substantial income on top of that from the two restaurants, room service, and facilities rental. I don’t know how much, but it seems likely that they’re taking in at least $20,000 per day. The requested raise of $240 per day is 1.2% of that income.

Evolution– I can see why we have Unions when people think like you. I would have to say some of the employees are already working below the poverty line. Another question are the employees getting a 40 hr work week and if not maybe they have no benefits. I would have to say the Union and the employees are being more than fair for what they are asking.

Evolution here is some math for ya 62 people have half of the entire wealth on this planet. What a great system we have indeed when the 7 billion rest of us inhabitants have to fight tooth and nail for a sliver of whats left over.

Thank you billposer, that’s the kind of rationalization I was hoping to incite, as I said I’m not taking sides, 0.30 cents/hr may be quite manageable for the Coast Inn but could be a budget buster for another operation.

oldman1, thanks for the smack down…you need a Union because I’m thinking?

oldman1, using the number above of 100 people and taking $16.00 per hour as an average between the $14.14 and the $18.00 per hour shown above, assuming an 8 hour workday, that works out to $12,800.00 in wages. On top of that, there are other costs to the employer for CPP, etc.

Using billposer’s earlier number of $16,375.00 brought in by room rentals, the $12,800.00 for wages represents a fairly big chunk out of the revenue stream.

While we can assume that the hotel brings in revenue from other sources, we also have to assume that there additional costs such as salaries for exempt and managerial staff, utilities, supplies and of course the ever increasing taxes and fees to various levels of Government!

It’s easy to sit in our homes or offices and point fingers one way or the other, but it would probably be best if we all had a look at the entire situation, from both sides of the table. If owning and running a hotel is assumed to be akin to owning a gold mine, one might expect a long lineup of investors willing to put up their money to build and operate a hotel. Funny thing is, I don’t see that happening!

62, you sure about that?

I only have to look around this small city to realize most here live quite comfortably with no visible battle scars.

If the Union is saying that a 1% increase works out to a $0.14 per hour raise for the lower income workers, then their request for $0.30 per hour works out to just a touch over 2%.

Without access to the Coast’s books, none of us know the financial situation that exists.

Is 1% too little, is 2% to much?

Perhaps they can reach a compromise? For example, if the Coast offers to come up to 1.5% AND the Union reduces it’s union dues, the employees might see a combined effective benefit of around 2%!

That could work, but highly unlikely as I don’t see the Union as being willing to reduce it’s dues to it’s members!

Not having a contract since last May is just dumb.The wages are to low in the first place and this is why we have so many people in poverty. The food banks are filling up with customers so would you like to make a donation.

if the company comes up with a just and fair contract but I just can not see that happening. Like oldman says this is why our welfare recipients are gaining numbers and our food banks have huge lineups. Not enough money to live on.

This is a profitable hotel chain that manages its operations very tightly.
From what I have observed, they do not spend an extra dime on anything unless it is absolutely necessary.
However, they do maintain their properties fairly well, and have numerous long term employees.
Coast Hotels are owned by Tokyo based Okabe Co. Ltd, have 30 Canadian locations, and 12 in the U.S. of A. Hotels are just one of many business sectors the parent company operates.
Okabe is a publicly traded company.
metalman.

If hotels, motels, and restaurants are all supposed to be so profitable why are there always more of them than any other types of businesses listed for sale? Owners all got so rich they decided to retire early and enjoy all those ill-gotten gains they’d extracted out of exploiting their underpaid workers? Or people who’d found out that there wasn’t any ticket to riches in owning and operating any of those kinds of businesses, even when paying their staff low wages?

My first job was working in a hotel for minimum wage. When I decided I needed more money, I went and found a different job that paid more.

Just saying.

Basic cost accounting here.

The $12,800 daily wages for the day is not a reliable number for 100 employees (not 85?), because its unlikely they all work every day. Some of them are bound to have days off or only work 3-4 days a week. Maybe 50 employees a day is more realistic? SO half of $12,800 is only $6400 from $20,000 hypothetical revenue.

The 159 rooms cited at $149 per night… fixed costs for the hotel once covered changes significantly the incremental contribution margin for each additional room rented out. At 60% occupancy capacity the contribution margin might be small under 20%, but above say 80% occupancy the contribution margin could be as high as 80%… that being the key to this business.

The 1% raise offer applies to the lower end of the pay scale at $14.40. Assuming the 2% would be double the 1% to reach a flat rate of $.30 is erroneous math because $.30 may be a 2% raise for the lower end employee, but represents only 1.67% for the higher end pay employees. Depending on the mix of higher end and lower end pay employees the actual percentage for a flat rate of $.30 is somewhere within the range of 1.67% and 2%.

Lets say it is as high as 2% flat rate. That is renting an extra 3 rooms per night at current rates (assuming other fixed and variable costs are already covered) for a hotel like the Coast Inn.

Is this achievable to increase the occupancy by 3 rooms a night to achieve the pay raise? It would require exception service by the employees to retain the repeat clients and spread good word of mouth and who knows maybe they could increase the occupancy by 6 rooms a night…

Also the time without a contract is a lost pay raise, so in effect if they do finally get the 2% and its not retroactive, which it rarely is, then by the time they do sign for a 2% its the equivalent to the company as if they just signed for the original 1% at the expiration of the last contract… so the company gets what they want either way in the end.

Really Evolution? 30 cents an hour is going to be tough on some employers? If an employer is counting on that 30 cents to keep them in business I would suggest they have bigger problems than they think they do.

Everything has gone up lately except wages.

Sorry gas went down but not for long.

@eagleone it is always retroactive as the current contract starts when the old one expired. If a year goes by and you finally get a 3 year contract worked out there are 2 years left and 1 year is retroactive. This is a union.

Is the 30 cents per year or for the term of the contract, we don’t know the specifics so does your 3 rooms become 6 in year 2 and 9 in year 3 etc? Leave the mediating for the mediator if they go that route.

when has anyone ever known “everything” to NOT have gone up MORE than wages have? Whether wage increases are miniscule or substantial they’re still ‘costs’ to a business (or government) that have to be recovered in ‘prices’ (or taxes). While the ‘incomes’ actually received by the wage earner are always only a PART of those ‘costs’. There may be an illusion that a raise in pay makes everyone better off, but are they really? We have a ‘graduated’ Income Tax set-up. The more the employee’s gross pay, the greater the percent of that gross is taken in tax deductions. CPP adds another equal deduction paid for by the employer to the increased take on increased pay grossed by the employee. EI is even worse, the employer pays $ 1.40 on top of every
$ 1.00 taken off the employee. Worker’s Compensation is also up, and entirely employer paid based on gross payroll. Add in mandatory holiday pay and statutory holiday pay where applicable, and the cost to the employer is substantially more than what the employee receives as a net increase on his paycheque. And there are a LOT of other factors involved, like the increased amount of working capital the business must have and be able to maintain to meet these payments. The margins in most businesses nowadays aren’t increasing, they’re shrinking. To reverse that, and get employee’s a better ‘living wage’ we’d better start to look at some way to provide income boosts that are NOT ‘costed’ into prices.

Hope they get their raise. When I worked at the coast it was the only union hotel in town to my knowledge, but I still found it to be a poor experience compared to the union environments in the hotels I worked at in other cities.

If they are still the only union shop, the wages are likely already the highest in town in that industry which makes it difficult to negotiate raises. Nevertheless the majority of the staff are underpaid compared to the work they do.

Eagleone– You are right. Many companies like to drag out contracts as long as they can so they can get away from paying retro. slinky— belonging to a Union is no guarantee that you are going to be able to recover retro pay. This contract being delayed this long is telling me that the employees are short of funds and cannot afford to go on strike to back their demands.

We will see if the staff are as important to Coast Hotels as management keeps telling them.

Perhaps a few days on the picket lines maybe the ticket…

If the hotel would have to raise the room rates by the same percentage as the increase in wages, I think the $3.00 would be acceptable.

Holy cow….talk about cheap skate employers. I got bigger raises than that from a fast food joint I worked at in 1970.

If the employees are tired of cheap talk then have their Union serve strike notice and I think you will get action but that will be up to the employees to decide.