Wage rise adds another cost challenge for accommodation operators

Accommodation providers will face higher wage bills from July 1 after the Fair Work Commission awarded a 4.75 percent increase to minimum award wages, a decision Accommodation Australia says comes at a challenging time for operators already dealing with weaker tourism demand and rising costs.

Under the Fair Work Commission’s 2026 Annual Wage Review, minimum award wages will increase by 4.75 percent from the first full pay period commencing on or after July 1.

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The National Minimum Wage will rise from $24.95 per hour to $26.44 per hour, increasing from $948.00 to $1004.90 per week for a full time working week. The Commission has also set a minimum entry-level award rate of $25.74 per hour, or $978.10 per week, for classifications that apply during the first six months of employment.

Accommodation Australia CEO James Goodwin said the sector recognised the Fair Work Commission’s role while acknowledging the challenges the decision would create for operators.

“The accommodation sector works hard to be an employer of choice and acknowledges the decision by the independent umpire today,” Mr Goodwin said.

“But the fact is this increase in the minimum wage will put pressure on many operators, particularly smaller regional motels – which are doing it particularly tough.”

“We value our hard-working staff but note that this decision comes at a difficult time for all, when tourism demand has declined and costs have increased due to the uncertain situation internationally and the cost-of-living crisis at home.”

While the increase will provide welcome relief for employees facing ongoing cost-of-living pressures, industry leaders say it comes at a difficult time for accommodation businesses.

The Fair Work Commission said the decision sought to balance cost-of-living pressures facing workers with broader economic conditions, while acknowledging that many award-reliant employees have experienced a decline in purchasing power during the recent period of elevated inflation.

According to the Commission, more than 60 percent of workers affected by the wage review are women and more than 70 percent work part-time. Many are employed in accommodation and food services, retail, health care and administrative support roles.

The increase follows several years of rising operating costs for accommodation businesses, including insurance, utilities, compliance requirements and supplier charges.

Regional operators are likely to feel the impact most acutely, particularly those already facing softer tourism demand and cautious consumer spending.

Businesses covered by awards will need to ensure payroll systems and wage rates are updated before the new rates take effect from the first full pay period on or after July 1.

Operators can use the Fair Work Commission’s Pay and Conditions Tool to check applicable awards and updated minimum pay rates.

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