JUST days after the accommodation industry's bid to restrict minimum wage increases to 1.5% failed, a survey has shown labour costs have forced firms to cut staff.
The Accommodation Association of Australia survey of 200 businesses found more than 45% of respondents had to reduce staffing levels due to rising labour costs this financial year.
It also found nearly 40% of respondents were also expecting to reduce staffing levels for the same reason next fiscal year, while another 36% were "considering a reduction".
The survey was released days after the Fair Work Commission released its decision to increase the minimum wage by 2.6% or $15.80 a week, next financial year.
In its submission to the Commission's wage review, the accommodation lobby had argued for the wage rise to be restricted to 1.5%, citing the rising labour costs.
AAA chief executive Richard Munro said the survey results were "compelling evidence of the challenges" the industry was facing.
"It (wages) remains our industry's highest cost and until there are closer links between wages and productivity, the accommodation industry, as well as tourism more broadly, will suffer," he said.
Mr Munro said while staff were one of the industry's "most valuable resources", the cost of wages was "outpacing revenue".