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Throughout the economic turbulence of the last year, the hotel sector has had to bear the brunt of a customer base with substantially reduced disposable income. But have these difficult conditions impacted on salary levels? John Hunt, account director at specialist recruitment consultancy Hospitality & Leisure Recruitment provides a snapshot of remuneration and market conditions facing hotel professionals.
There is scarcely a sector of the UK economy that has not felt the squeeze from the economic tribulations of the past year or so. With belts being tightened all over the country, the hospitality industry, across its many sub-divisions, has been at Ground Zero of the financial fallout.
The hotel sector in particular has during 2009 experienced one of its most challenging 12 month periods in recent memory. Consequently we have seen a significant slow down in the number of people moving jobs and the number of permanent management positions being recruited. The tougher trading conditions have meant that the majority of people in a good permanent management position have kept their heads firmly down! Very few people have been prepared to take the risk of moving to a new company, unless the terms have been very attractive.
The housing market has also contributed, and where a job offer has also meant moving house, this has added an additional barrier to labour mobility.
Nevertheless, some segments of the market have continued to enjoy relatively strong performances, particularly in London and in some provincial areas. Here the client-base has been predominantly in the independent leisure sector, where the hotel or small group has established a loyal following of regular guests over a long period.
The conference market has probably been the hardest hit, with corporate clients disappearing overnight! Corporate entertaining has also seen a significant decline, predominantly affecting the quality hotels.
One area of the market that has seen an almost universal decline is average room rates, although room occupancy has remained strong, particularly in London.
But while the economy has, undeniably, had a direct and often adverse affect on the hotel industry, there has been a silver lining. The weak pound has provided a very important benefit to many sectors, stimulating a significant increase in tourists from Europe. That same factor has also seen a large number of Brits staying at home for their main holiday, despite the lacklustre BBQ summer!
The sector that has suffered the most has been the mid-market, particularly for the operators with no strong, recognised brand.
A number of groups that had not invested in their product found they were being squeezed by the budget operators, who were providing a far more consistent quality of bedroom product for a similar price.
In other cases, hotel groups that had invested in their product were under extreme pressure to meet their tough repayment terms in a declining market. As a result there have been a number of hotel groups which have been forced into administration.
Recruitment activity in more detail
As a result of all these factors, the recruitment activity in hotels over the past 12 months has been significantly lower than in previous periods. There has been a natural slowdown at the senior level and once people stop moving the whole cycle virtually grinds to a halt. In addition, companies have been making cost savings and as a consequence redundancies have been common, with certain areas being badly affected, notably HR and sales - the departments that are usually hit the hardest in an economic downturn.
Hotel groups have also been far more focused on their internal recruitment process, often allowing employees the opportunity to progress their careers rather more quickly than would normally be the case under normal economic conditions. Few groups have hired many senior managers externally.
As a result of the limited levels of recruitment activity in 2009, there are a number of people who will have stalled their career plans and will now be looking to get the ball rolling again in 2010. We could therefore see some significant movement this year.
Green shoots?
The sector is confident of a strong second half of the year, what is less certain is what will happen over the next three to six months. However, given the continued weakness of the pound, hoteliers seem generally optimistic that their markets will slowly return to more normal conditions, sometime during 2010! There is still a relatively short lead in time for a lot of hotel reservations, which makes forecasting for the month difficult, let alone the following 12 months.
Salaries & Benefits
There are few areas that have seen significant increases in salary levels during 2009; however wherever there is demand for real quality and the best talent, employers are always prepared to pay a premium. There continues to be a shortage in certain areas of the kitchen, where specialist head chefs can still command a premium. The same can be said of hotel general managers who have exceptional skills to steer a hotel through the challenging economic conditions.
But whilst salaries have not risen significantly overall, operators have been very keen to reward their teams on success. Performance-related bonuses have therefore continued to be generous. The always agreeable 100% bonus is not uncommon now, although the majority of companies will offer between 15% and 50% of salary in bonus payments. Different companies also continue to offer some or all of the usual buffet of benefits such as pensions, health care, dental care, relocation assistance, and car/car allowance.
The table data is a guide for a four-star, 150-bedroom hotel. We have provided a broad range, given the very varied facilities available in hotels and the varying pay scales offered by different companies.
The head office figures relate typically to companies with annual revenue in excess of £25million. However individual companies may place greater emphasis on a particular role and would therefore pay what they feel is appropriate for that specific position.
From an employer's perspective, the key to achieving the correct salary scale is to assess your own individual market and establish what you need to be paying to attract the best talent. Discussing this with your recruitment company and specialist consultant would be advisable, in order for you to gain an objective assessment of the whole market. Similarly, the variation in salaries from small independent hotels to London's leading five-star hotels is clearly vast, and the logic of gaining an external overview is invaluable.
Talent, particularly talent in short supply, will always command a strong salary. Nevertheless with market conditions in the medium-term still highly unpredictable it's perhaps unlikely that corporate purse strings will be loosened significantly.
Hotels (Director roles): London
| Min. | Max. | Typical | |
|---|---|---|---|
| Managing Director | £80,000 | £200,000 | £150,000 |
| Operations Director | £55,000 | £175,000 | £120,000 |
| HR Director | £50,000 | £130,000 | £80,000 |
| Marketing Director | £50,000 | £120,000 | £70,000 |
| Finance Director | £65,000 | £175,000 | £130,000 |
| IT Director | £45,000 | £120,000 | £85,000 |
| Property & Facilities Director | £45,000 | £130,000 | £90,000 |
| Sales Director | £60,000 | £130,000 | £100,000 |
Hotels (Director roles): South East & Midlands
| Min. | Max. | Typical | |
|---|---|---|---|
| Managing Director | £75,000 | £180,000 | £140,000 |
| Operations Director | £50,000 | £160,000 | £110,000 |
| HR Director | £45,000 | £125,000 | £70,000 |
| Marketing Director | £45,000 | £110,000 | £65,000 |
| Finance Director | £50,000 | £160,000 | £120,000 |
| IT Director | £40,000 | £100,000 | £75,000 |
| Properties & Facilities Director | £40,000 | £100,000 | £80,000 |
| Sales Director | £50,000 | £110,000 | £80,000 |
Hotels (Director roles): S.West, Wales, N.West, Yorkshire & N.East
| Min. | Max. | Typical | |
|---|---|---|---|
| Managing Director | £70,000 | £150,000 | £130,000 |
| Operations Director | £48,000 | £150,000 | £100,000 |
| HR Director | £40,000 | £110,000 | £65,000 |
| Marketing Director | £40,000 | £100,000 | £60,000 |
| Finance Director | £45,000 | £150,000 | £110,000 |
| IT Director | £40,000 | £95,000 | £65,000 |
| Properties & Facilities Director | £35,000 | £90,000 | £70,000 |
| Sales Director | £45,000 | £100,000 | £75,000 |
Hotels (Director roles): Scotland
| Min. | Max. | Typical | |
|---|---|---|---|
| Managing Director | £70,000 | £150,000 | £120,000 |
| Operations Director | £45,000 | £140,000 | £100,000 |
| HR Director | £40,000 | £110,000 | £65,000 |
| Marketing Director | £40,000 | £100,000 | £65,000 |
| Finance Director | £45,000 | £140,000 | £100,000 |
| IT Director | £40,000 | £95,000 | £65,000 |
| Properties & Facilities Director | £35,000 | £90,000 | £75,000 |
| Sales Director | £45,000 | £100,000 | £80,000 |
Hotels (Ops Roles): London
| Min. | Max. | Typical | |
|---|---|---|---|
| General Manager | £40,000 | £95,000 | £75,000 |
| HR Manager | £24,000 | £50,000 | £40,000 |
| Conference & Banqueting Manager | £25,000 | £50,000 | £38,000 |
| Food & Beverage Manager | £25,000 | £55,000 | £40,000 |
| Front of House Manager | £20,000 | £50,000 | £35,000 |
| Reservations Manager | £18,000 | £35,000 | £28,000 |
| Head Housekeeper | £18,000 | £45,000 | £35,000 |
| Sales Manager | £25,000 | £45,000 | £35,000 |
| Head / Executive Chef | £26,000 | £40,000 | £32,000 |
Hotels (Ops roles): South East & Midlands
| Min. | Max. | Typical | |
|---|---|---|---|
| General Manager | £35,000 | £80,000 | £65,000 |
| HR Manager | £22,000 | £45,000 | £35,000 |
| Conference & Banqueting Manager | £20,000 | £35,000 | £30,000 |
| Food & Beverage Manager | £22,000 | £45,000 | £30,000 |
| Front of House Manager | £18,000 | £45,000 | £25,000 |
| Reservations Manager | £18,000 | £32,000 | £26,000 |
| Head Housekeeper | £17,000 | £35,000 | £30,000 |
| Sales Manager | £20,000 | £40,000 | £32,000 |
| Head / Executive Chef | £24,000 | £37,000 | £28,000 |
Hotels (Ops roles): S.West, Wales, N.West, Yorkshire & N.East
| Min. | Max. | Typical | |
|---|---|---|---|
| General Manager | £35,000 | £75,000 | £60,000 |
| HR Manager | £20,000 | £43,000 | £32,000 |
| Conference & Banqueting Manager | £18,000 | £35,000 | £28,000 |
| Food & Beverage Manager | £20,000 | £42,000 | £28,000 |
| Front of House Manager | £18,000 | £35,000 | £24,000 |
| Reservations Manager | £17,000 | £30,000 | £25,000 |
| Head Housekeeper | £17,000 | £32,000 | £28,000 |
| Sales Manager | £18,000 | £38,000 | £30,000 |
| Head / Executive Chef | £22,000 | £35,000 | £30,000 |
Hotels (Ops roles): Scotland
| Min. | Max. | Typical | |
|---|---|---|---|
| General Manager | £35,000 | £75,000 | £65,000 |
| HR Manager | £20,000 | £44,000 | £35,000 |
| Conference & Banqueting Manager | £18,000 | £38,000 | £30,000 |
| Food & Beverage Manager | £20,000 | £45,000 | £30,000 |
| Front of House Manager | £18,000 | £40,000 | £25,000 |
| Reservations Manager | £18,000 | £32,000 | £26,000 |
| Head Housekeeper | £18,000 | £38,000 | £30,000 |
| Sales Manager | £18,000 | £38,000 | £30,000 |
| Head / Executive Chef | £22,000 | £39,000 | £28,000 |
