Karnataka hotels warn of food price hike after wage revision

The Karnataka State Hotels Association on Monday warned that the State Government’s decision to implement revised minimum wages will lead to a steep rise in food prices across hotels and restaurants.

Noting that the average minimum wage increase is about 60 per cent from the current wages and will severely impact restaurants, association president GK Shetty said a plate of Idli may jump to Rs 80 from the present Rs 50 and Masala Dosa to Rs 150 from Rs 80-90.

Vegetarian meals priced at Rs 150-200 may rise to Rs 250-300, and biryani dishes in Bengaluru could increase from Rs 300-350 to nearly Rs 500, he said, adding that, “With such increases, eating out will become more expensive for ordinary citizens, impacting the hotel industry.”

Karnataka has notified new minimum wages for organised and unorganised sectors. As per this, an unskilled person should be paid Rs 23,376 per month in the Greater Bengaluru Area, and for a highly skilled worker, it has been fixed at Rs 31,114 per month. Outside Bengaluru, the minimum wage for unskilled work ranges from Rs 19,300 to Rs 21,251.

Shetty said that the nearly 60 per cent increase in minimum wages would significantly raise operating costs for hotels, particularly small and family-run establishments already struggling with rising expenses.

The price of a commercial LPG cylinder had been hiked from Rs 1,884 to Rs 3,152 in just a few months. All the groceries, power tariffs & garbage cess rates were also hiked, adding to the strain of small hoteliers, he said in a release. Shetty pointed out that the hotel sector already provides several welfare benefits to workers, including food, accommodation, uniforms and washing allowances, unlike many other industries.

“Hotels are not like other sectors. We provide food, lodging and other facilities to employees. The Government should have considered the unique nature of the hospitality industry before imposing such a steep wage hike,” he said.

The association, he said, had appealed to the Karnataka Government to classify the hospitality sector separately while implementing minimum wage revisions, but their request was not accepted.

The association has urged the Government to reconsider the Minimum Wages implementation for the hotel industry and prevent widespread hardship for small hotel operators and consumers alike.