The Nepal Independent Hotel Workers' Union is threatening to go on strike from 19 November onwards unless the Hotel Association Nepal (HAN) adds an extra ten percent service charge on all bills-later to be passed on to them. Having staged motorcycle rallies, workers are planning to wear black bands to work to put pressure on hotel-owners this week.

HAN says the service charge would bring the total tax to 22 percent: 10 percent VAT+ 2 percent Tourism Service Fee + 10 percent the proposed service charge. They could pass this cost on to their clients, but say they cannot cope with escalating demands in future. HAN has turned to the government, which is presently acting as the mediator. "The government has taken the initiative to solve this problem, and is doing its best," says Shankar Koirala, Joint Secretary at the Ministry of Tourism and Civil Aviation. But top government leaders are distracted by infighting within the ruling party, and with the stalled talks with the Maoists. HAN has written a strongly-worded letter to the prime minister, warning him that unless the government mediation goes into high gear, the country's economy could collapse.

If the strike threat is not resolved, the result would be disastrous for the country's tourism industry during its peak season. Charter airlines have already stopped flights, and others may follow suit. The strike could in fact be much more devastating than the bandhs. Already, tour operators and trekking agents have sent out warnings to their clients that they cannot guarantee hotel rooms after 19 November; and they expect many tourists to cancel their trips.

The strike threat has obviously been timed for the peak season to maximise their bargaining power. Hotel workers disagree that the compulsory service charge will do irreparable damage to the tourism industry. "We are ready to sign a written document saying that in case this service charge shows any undesirable effect, we shall withdraw the demand," said Bishnu Lamsal, Secretary of the Hotel Workers' Union.

Samir Khanna, General Manager of the Hotel de l' Annapurna says there is already a tipping system, and this is the way hotel guests mark their appreciation of service. "If there is a service charge, tourists will have to tip hotel employees irrespective of what they think of the service," he said. It is the employees in the food and beverage department that get tipped. The extra service charge means that even those employees who never come in direct contact with guests will be receiving the service charge. .

HAN has asked the Union not to have a 19 November deadline since negotiations could be protracted. But Union officials said the deadline was non-negotiatble.