Fiji Hotel and Tourism Association, 03 September 2026 – Fiji is in the middle of a genuine debate about what workers should be paid. While we support fair wages for fair work and understand the difficulty with accessing productive, skilled staff; we also have unique insight into the challenges being experienced by the wider tourism industry that includes its significant supply chains and support services.
Our industry competes for staff against Australia and New Zealand, where the same skills earn multiples of what we pay here, and we lose good people to that gap every year. A stronger wage floor helps us retain talent to a certain extent, and retention matters more to service quality than almost anything else we invest in. But supporting the direction of a policy and supporting the way it is currently being proposed are two different things, and the difference matters enormously here.
The number on the table is $8 an hour, up from the current $5, put forward by the Fiji Trades Union Congress as a living wage rather than a standard minimum wage adjustment. That is a 60 per cent increase in one step, on a minimum wage that has already moved up from $2 an hour in 2014 to $4 in August 2024. It then moved to $4.50, then $5 from April last year – a roughly 150 per cent rise over eleven years, with close to 87 per cent of that increase landing in just the last three years. The Fiji Commerce and Employers Federation has pointed out that our rate already sits more than 60 per cent above Papua New Guinea’s, despite PNG’s economy being four times the size of ours. The Prime Minister has said government sees no reason it could not consider the union’s proposal but has since called an outright jump to $8 “unsustainable” given the pressures the economy is under, and the finance minister has been consistent that any move has to go through a proper process.
As of a few weeks ago, government confirmed a funded review of the current $5 rate, with officials explicitly saying any increase would need to happen incrementally. But nothing has been decided. This remains a union proposal sitting inside a commissioned review, not a settled policy. What is clear, however, is that factions are seizing the current run-up to the national elections to press this as the perfect moment for a dramatic shift, framing the wage debate as a test of political will rather than a matter of economic sequencing. That makes it even more important for industry voices to be heard now, before the review reports back, so that the outcome reflects balanced consultation rather than electoral opportunism.
I raise the timing because 2026 is a genuinely difficult year to absorb a shock of this size without careful sequencing. The five per cent Tourism Services Tax took effect on 1 September, introduced, in our view, with inadequate consultation. Around the same time, a global fuel shock tied to tensions in the Strait of Hormuz began working its way through our economy, and fuel makes up close to a quarter of Fiji’s imports. Westpac has downgraded Fiji’s 2026 growth forecast from 3.3 to 2 per cent and expects inflation to peak near 6.4 per cent by September. Fiji Airways has had to consolidate routes in response to jet fuel costs, which constrains visitor arrival capacity directly, not just ticket prices. Energy Fiji Limited has warned electricity rationing is a possibility.
Tourism accounts for around 40 per cent of our GDP, one of the highest exposures to a single sector anywhere in the Pacific. Given SME’s make up 60 percent of Fiji’s private sector growth engine, layering a 60 per cent wage floor increase on top of all of this, in the same twelve-month window, without any visible sequencing between these separate cost shocks, is definitely not sustainable.
It is worth glancing briefly at how comparable tourism economies have handled this same tension, because the pattern is consistent and instructive. The Maldives, where tourism dominates GDP even more than it does here, tiers its minimum wage by business size, with tourism businesses and medium enterprises paying a different rate to large corporates and small operators paying less again, deliberately shielding smaller and tourism-specific employers from a single blanket number. Samoa is moving through a four-year, multi-stage increase agreed through its National Tripartite Forum, with government, unions and employers all at the table, rather than a single leap. Vanuatu’s last increase went through a statutory Tripartite Labour Advisory Council required by law to weigh cost of living, productivity and employment impact before recommending anything to the minister. Mauritius reviews its minimum wage annually through a National Wage Consultative Council and runs a separate wage schedule specifically for its catering and tourism sector. None of these countries got everything right, and none of this is to say Fiji should copy any one model wholesale.
But every genuine comparator we looked at, has done two things Fiji’s current proposal has not: staged the increase over time, and either tiered it by sector and size or negotiated it through a proper tripartite process. A single-step 60 per cent rise, with no announced tranching, and no completed review, would be an outlier against nearly every serious peer economy in our region.
So what does this actually means across our industry – because the impact is never uniform in a developing island economy. Our larger, internationally branded resorts already pay above $5 (sometimes well above), in most cases through service charges, allowances and enterprise agreements, and while a jump to $8 would still add meaningfully to payroll at scale, they generally have the reserves, pricing power and productivity investment to absorb it without existential risk. Mid-sized independent hotels sit in a much tighter spot, large enough that they cannot easily cut corners, too small to carry the balance sheet of an international brand, and squeezed simultaneously by the wage line, the new tax, and fuel-driven input costs on food, transport and electricity, and added competition for skilled staff. Their real options narrow down to raising room rates against better-resourced competitors, cutting hours, or deferring the refurbishment and reinvestment that keeps a property competitive. But it is our smaller operators, guesthouses, boutique properties, tour operators and small food and beverage outlets, where there is the most concern. Many are already paying close to $5 because that is genuinely what a thin-margin business model can sustain.
For that tier, a sudden move to $8 is closer to an existential threat than a cost adjustment, and the realistic response for some will be reducing staff, increasing casual work, shelving any expansion, or in the worst cases, closing altogether. Those are also the businesses least likely to have had a real seat at the table in a review being run out of Suva.
This is, therefore, a genuine balancing act. We want our workers paid fairly and competitively enough that Fiji remains an attractive place to build a career in tourism, not simply a stepping stone to somewhere else. At the same time, we cannot ignore that some businesses will not survive a 60 per cent increase applied in one step, and that many of the very jobs a living wage is meant to protect could be the first ones lost if such a shock is imposed without care. The way forward is not to abandon the goal, but to get the mechanism right. That requires proper consultation that genuinely includes the voices of large, medium, and small operators, workers themselves, and government—rather than reducing the process to a contest between the loudest union demands and employer federation rebuttals. Stage the increase, tier it where smaller and tourism-specific businesses need protection, as Malé and Apia have done, and give the review the time it needs to sequence this change against the other cost pressures already hitting the industry this year. This is responsible policymaking, and exactly the kind of process a change of this magnitude deserves.
Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 03 September 2026)
Fiji Hotel and Tourism Association
The Voice of the Industry
