EUROPE - Pension fund investors should be challenging boards over staff pay in London hotels, described by one trade union official as "impossible to live on".
Hotel workers union official Kevin Curran told IP Real Estate: "The hotel industry depends on its brands. If I were an investor, I would be concerned that one or two horror stories about the treatment of staff would badly affect that brand - and my investment."
He described the employment terms and conditions of some employees, especially those contracted on housekeeping contracts via agencies, as "appalling" and urged shareholders to support the 'living wage campaign', which estimates the current liveable hourly minimum wage in the capital at £8.30 (€9.31) - significantly above the £5.93 national minimum wage.
Curran pointed to Intercontinental, whose Holiday Inn subsidiary has signed an agreement with the UK's umbrella trade union body, the TUC, as part of a third-tier supplier deal for the 2012 Olympic Games.
In practice, said Curran, the group had declined to meet with the union and refused access to the hotel's workforce.
Intercontinental did not respond before deadline to a request for comment today.
Speaking on a conference panel on remuneration on the weekend, Tom Powdrill of PIRC, a corporate governance consultancy, attributed pension scheme passivity on the pay issue to the fact most outsource management of their schemes to external asset managers.
"There aren't enough good guys out there," he said.
While some pension schemes, such as the Quebec state pension fund, have recently moved out of hotels in favour of office, others, such as British Steel, have recently been buying.
Curran said: "Investors should be taking an interest, not just because it's ethical, but because all the evidence shows a workforce treated with respect and given opportunities to development deliver bigger profits."