Hotelier Salary survey 2016: Full results revealed

Confidence in the Middle East hotel employment market is falling, continuing last year’s trend when 23.8% of participants said they felt less secure than they did 12 months ago. This year, 38.8% expressed the same. The decline in Russian visitors, along with financial concerns and falling oil prices, have continued to make their presence known.

Sources have told Hotelier that the job market isn’t conducive to new opportunities at the moment, while others have reported pay freezes in their companies.

While the start of the year saw a definite uncertainty when it came to occupancy and ADRs, most hoteliers we spoke to at Arabian Travel Market said they saw better results from March onwards, with forward bookings giving them hope for the rest of the year. H Hospitality regional director and The H Dubai GM Kevork Deldelian told Hotelier: “In April we’re going to hit 87% occupancy, whereas last year we were at 84%.”

Speaking to Hotelier Middle East, Alila Hotels & Resorts regional vice president and Alila Jabal Akhdar acting general manager Julian Ayers said: “It [performance] has actually turned out very well. We had a rocky start; I think everybody did in January. February, March and April have turned out very well, and May is looking positive. Lead time is getting shorter so it’s getting harder to tell whether you’re going to have a good month or not, but it’s looking very positive again.”

Agreeing is Six Senses Zighy Bay resort manager Greg Kocsis, who said the outlook for the next few months is positive, adding that the only downside is that “the perception about the region is mixed because of the sad events over the last few months”.

This mixed perception might be why confidence is still down. Last year, 13.5% said they feel more secure than they did 12 months ago. In 2014, that was 20.7%. This year, it’s gone down to 11%. However, the number of hoteliers who are anxious about keeping their jobs has reduced ever so slightly to 10.3%, from 11.1% last year. It still has not gone back down to 2014’s low of 4.6% hoteliers who were anxious about their jobs.

Last year, 0.5% of our respondents were told they were being made redundant, and this year, 2.2% reported the same.

However, things may not be as bleak as they were a few years ago. Speaking to Hotelier during AHIC 2016, STR managing director Robin Rossmann said: “Where we are today in the Middle East is very similar to where we were back in 2008-2009. Both from a supply perspective, where we’ve got this big pipeline and potential growth that could result in a 50% increase in supply over the next three to five years. And a lot of concern — while we’re not in a global recession yet — performance is declining double digit, in a way that it was in 2008-2009.

“A lot of people are quite concerned because you’ve got RevPAR going down, revenue is going down. And the expectation of all this new supply, which is only going to make things more difficult for existing hotels.”

He continued: “We went back and did an analysis of what actually happened back in 2008-2009, and how that played out for six years. Despite what probably most people said at the time, the market managed to absorb all of that supply — but actually did more than absorb it. Demand grew bigger than supply, supply grew 40%, demand grew 50%. Yes, there was some decline in average room rate, but that wasn’t there until this year.”

Respondent Demographics

The Hotelier Middle East Salary Survey 2016 attracted 294 responses, across a number of demographics. The top three groups included 32% Europeans, nearly 25% from the Middle East region, and 21% from the Indian sub-continent.

UAE accounted for 79.25% of the participants, with 8.5% from Qatar and 4% from Saudi Arabia. The remainder of the hoteliers work in Bahrain, Jordan, Kuwait, Lebanon, Oman, Egypt, Libya and Turkey.

When it came to age, 25.5% were between the ages of 26-30, showing the young demographic of respondents in this region. 20.7% were 41-50 years of age, and 19% were 31-35. Only 1.4% were over the age of 60, with only two respondents saying they were under the age of 20.

When it came to the type of hotels people were responding from, 43.96% were from luxury/resort hotels, 36.63% came from city hotels, while the remainder was made up of hotel apartments and mid-market properties.

TRAINING & DEVELOPMENT

In spite of potential challenges, a similar percentage of hoteliers said they are completely happy to remain in their current roles (18.3% this year, compared to 18.6% last year). However, 35.9% said they are actively looking for new opportunities in the market.

Close to half of this year’s respondents (40.8%) have been with their current employer for between 1-3 years, and 18.7% have been in their jobs for less than year. 18.4% have been there for between 3-5 years, while 22.1% have been with their current employer for six years or more. Last year, 17.4% were in this category, which shows that retention is taking place.

Speaking to Hotelier, The Ritz-Carlton Doha director of sales and marketing Joseph Hagopian admitted that in general, the Ritz-Carlton hotels have gone through a few phases of staff turnover, due to a combination of things.

Hagopian said: “Some people have worked a long time in one property and are just ready to move on: this is normal, but we also have some staff 15 years in the same company. Doha offers a lot to employees; it’s family oriented, once staff start a family here it is comfortable — authenticity and culture here is felt by the staff.

“Investments in Qatar are maintaining the appeal and authenticity of the destinations — it helps keep staff — Ritz staff are the envy of the industry. As a company, our job is to keep our staff by treating them very well. It’s a compliment when other companies look to us and try to take our employees away. There are currently 54 nationalities working in Ritz-Carlton — they really enjoy life with Ritz-Carton and also Doha.”

So what motivates employees to stay? Training and development is the obvious answer, in addition to, of course, salary. Nowadays it’s not enough to have money thrown at people with no scope for development and career progression, which is currently one of the biggest concerns facing the industry.

In reaction to this issue, Rocco Forte Hotels brand manager Irene Forte is launching an upskilling and career progression app this month. Called ‘Map My Future’, the app was created when the UK government launched a competition for people to create an idea to improve skills and the lack of retention and career progression in hospitality.

Speaking to Hotelier, she said: “The app is effectively a career progression app, an upskilling tool. It has learning on the go, it shows a career map with all the routes you can take within your industry so people can set goals and work towards that goal.”

She continued: “It’s also a communication tool. In hospitality, most people are on the floor and it’s difficult to communicate with all the people at once, so there’s a messaging service and newsfeed; it brings everything we’ve been working on with training and development into one place.”

Top ten companies hoteliers would like to work for

1. Four Seasons Hotels and Resorts (46.2%)
2. Marriott International (38.3%)
3. Jumeirah Group (31.6%)
4. Ritz-Carlton (25.7%)
5. Starwood Hotels and Resorts (25.3%)
6. Hilton Worldwide (24.1%)
7. Fairmont Raffles Hotels International (21.3%)
8. Emaar Hospitality Group (19.4%)
9. Hyatt Hotels (19%)
10. InterContinental Hotels Group (19%)

Forte said the app is launching first with Brown’s Hotel in London, and The Balmoral in Edinburgh this month. Then, she added, it will be pushed out to market. “It’s been built as a white label product so that others within the industry can purchase it and can tailor everything to their own needs.”

Speaking about the aim of the app, Forte said: “In hospitality, there are hotels and restaurants opening left, right and centre, and people move. The idea is to show the progression route and make people understand this is a viable career option for them and that they can really grow within it.” She cited the skills shortage in the industry as a concern which also prompted her creation of the app.

Hearteningly enough, 60.8% of our respondents said they were offered training opportunities by their employers in the last 12 months.

Kocsis said training is a “huge part” of Six Senses’ DNA. “Training and development utilises a huge part of our resources. We do a lot of initiatives from the head office and locally from Zighy Bay. This involves new hires as well as existing employees.”

Alila’s Ayers pointed out that training is an added value for employees. He said: “Money isn’t everything. You have to train them, give them opportunities elsewhere within the company — so from that point of view it’s important to make sure there’s a certain amount of on the job training, as well as training away from the property.”

More worryingly, when asked whether hotel companies have made employees aware of their career road map or development route within the organisation, 56.4% said no.

However, FRHI Hotels & Resorts SVP development Europe, Middle East, Africa Francois Baudin said employee satisfaction and long-term progression is key. “We need to make the employees happy and believe in what they are doing — happy employees result in happy guests.

“In FRHI there is a high level of training, and a high level of follow-up as well for careers and goals and making sure people explain to us how they build their careers with us because retention is very important in the hotel industry. Turnover costs money.”

He continued: “Staff turnover is very low in our brands, and you can recognise that when you go to any of our hotels, they feel proud to work for the hotel.”

AccorHotels managing director and COO Olivier Granet also said it was important to engage teams. “In AccorHotels, what was previously called ‘human resource’ has been renamed ‘talent and culture’. This illustrates the change not only of the words but what is behind them. Hospitality is a great opportunity for career and development and we can do it through our training programme.”

Stat attack

18% Hoteliers who picked ‘10’ when asked on a scale of 1-10, 10 being the most likely, how likely were they to recommend their employer to others in the industry

6.97 Average rating when respondents were asked on a scale of 1-10, 10 being the highest score, ‘how satisfied are you with
your job?’

30% Female respondents

12 C-level (CEO/COO/CFO etc) respondents to the Salary Survey

5.1% Hoteliers who have worked in this region for more than 20 years

SHOW ME MORE MONEY

In addition to the training and development options, salaries and bonuses are also important. In 2015, 9.6% of respondents expected a pay rise within the next six months. In 2016, the split seems equal — 36% said they anticipate being awarded a pay rise, 36.4%, said they do not, while the remaining were unsure.

Swiss-Belhotel chairman and president Gavin Faull told Hotelier that he thought salaries will remain flat. “I think salaries will be flat because they grew so fast in the last five or six years — Dubai’s cost structure will become more realistic too. It’s an averaging game, and always an issue of maintaining rank and file service level.

“Staff numbers will increase — the workforce is mobile — so good properties and management will have no problems finding staff; we just have to be smart and fix problems before they arise in order to keep staff. Job security is important these days — this is an important offering to retain staff. Rent has lowered a little bit, that has helped living standards with salaries staying flat.”

Hearteningly, 23.8% of the participants had been given a pay rise less than six months ago, while worryingly, 31.4% said they had never received one. Pay cuts have not taken place, however, with 93.8% saying they have not received a pay cut in the last 12 months. This feeds into the general sentiment of a pay freeze, with one survey respondent saying: “There will be no pay decreases, however, also no increases”, and another added: “Told no pay rise for anyone.”

A few respondents said their salary is set to increase due to a promotion and expansion of responsibilities. Another respondent was positive and said: “We are a growing company and [the] company knows how to look after employees even during recession time.”

Those who said salaries will fall added that “seeing the market conditions, [the company] is very unlikely to increase the salary in this financial year”, while another said that the “company does not want to increase payroll cost at this time”.

In terms of comparing salaries on a global level, there seems to be a shift in thinking. Last year, nearly 50% said they thought their wages were on par with global levels, with 45.4% thinking they earn less. However, for 2016, the situation has reversed — 41% think they earn a global average, while 45.6% believe they earn less than average compared to global salaries. Regionally, 14.2% felt their salary was above average, compared to 4.9% in 2015.

We asked participants about their typical monthly remuneration (excluding allowances, accommodation value, commissions and bonuses) — 21.5% said this was between US $1,001-2,000 per month, with 10.7% earning less than $1,000 per month. Only 3.1% earn between $15,001-30,000 per month. Bonuses, allowances, and commissions seem to have been cracked down on this year, with just 5.4% of our respondents saying this made up more than 40% of their annual remuneration compared to 13.4% last year.

Taking into consideration salary, security, reputation and career development, Four Seasons Hotels and Resorts topped again as the hotel company people would like to work for the most, with 46.2% votes. When this news was shared with the operator, Four Seasons president, hotel operations Europe, Middle East and Africa Christian Clerc said: “The success of Four Seasons is a true reflection of the passion of our people who, through their utmost dedication, continue the company’s legacy of service excellence, delivering memorable guest experiences every day.

“This recognition is a great cause for celebration especially since it follows two key hotel openings in Dubai (DIFC) and Abu Dhabi (Al Maryah Island). Our employees are Four Seasons’ greatest assets and we are proud that our company culture is resonating with hospitality professionals in the region.”

Marriott has inched back up the list after coming in third last year, with 38.3% saying they would like to work for this behemoth. Jumeirah Group is back down to third spot with 31.6% interested in working for the home-grown hotel company.

LONG-TERM PERSPECTIVE

The good news is that the forecast in terms of regional hotel performance for the long-term is positive. STR’s Rossmann said Dubai and Jeddah, for example, are showing margins of over 40%. “There will be some headwinds, but there are still very high profit margins.”

While he admitted 2015 was tough and 2016 had a tough start, he pointed out that in the region, demand grew in 2015 and is still growing in 2016. “The reason is that more people are staying here and spending nights in hotels. The challenge, and the reason why performance has been struggling, is because supply has been growing much faster than demand — much higher than anywhere else in the world.”

He continued: “That’s short-term but we need to look at longer term for investment. The Middle East has had about flat RevPAR over 2010-2015, which is quite far behind other regions which has seen 30-40% growth in RevPAR. That might seem discouraging but it’s not a fair comparison because over that period the Middle East has seen supply growth of more than 40% — most markets haven’t seen anywhere more than 5-10% supply growth. Any time you have that much supply growth, you are going to have challenges. The really good news is that over that period, demand has increased across the Middle East by a staggering 51%.”

He revealed that the market managed to hold RevPAR across that period, and grew at more than 42% in total revenue terms. “In the majority, we expect more markets to have a good 2016. Dubai is one that looks like it will have a struggling year.”

He told Hotelier: “The question is: can history repeat itself? Can the Middle East do in the next five to six years what it did in the previous five to six years, which is absorb a huge increase in supply and maintain its levels of profitability? It’s probably going to be just as tough, if not tougher than last time. But if you look at the fundamentals: world tourism is growing and inter-regional tourism is growing. And there are more and more reasons for people to visit the area — in terms of visitor attractions, and the strength and growth of the airlines bringing people to the region.”