Executives at the larger, more complex hotels continue to bring home the largest paychecks. Consequently, large convention and resort hotels pay more than their smaller all-suite and extended-stay  counterparts. That is one of the many findings in this year's 1998 HCE Hospitality Compensation Exchange survey. The survey is conducted by HVS International and includes data from nearly 2,400 North American hotels, encompassing 27 managerial positions. The survey is the largest of its kind and is updated every two years. The results include representation of all industry segments, with the exception of bed & breakfasts and casino/hotels. Casino are surveyed separately due to their unique environment and geographic focus. Below is an excerpt from the HCE survey that examines the compensation trends of seven executive committee positions. The trend analysis compares the compensation levels between 1995 and 1998. 

When compared to 1995 levels, almost every management position had salary increases that beat the rate of inflation. With the inflation rate at about 3% per year, six out of the seven positions had compounded salary increases greater than inflation. For example, a general manager in 1995 earned an average base salary of $66,464.41 and in 1998 earned $77,950.05. With the exception of director of sales & marketing, the average compounded increase for the six positions was 3.9% per year. It is apparent that low unemployment, coupled with a thriving financial market has driven up compensation in the lodging industry. However, there continues to be a wide disparity of compensation levels for executives depending on the type, class, size and geographical location of their hotel property. 

The type of hotel refers to the physical characteristics and the operation complexity of a property. As illustrated in Results by Type Table, compensation increases from the least complex extended-stay property to the most complex convention property. For example, a convention hotel general manager gets paid $93,030.40 more in total compensation that his/her counterpart at an extended stay property. Resort properties were also categorized as highly complex, and had the highest average salaries for director of MIS, human resources and sales & marketing. Besides the general manager positions, convention hotels also lead in controller, food & beverage and rooms compensation., 

GM Salary Hike 

When compared to 1995 levels, those with the biggest increased in salary were at conference centers and convention centers. Increases in resort compensation levels dragged in fourth place. For example, a resort general manager in 1995 earned an average salary of $91,323.18 and in 1998 his/her salary increased $8,787.42 to $100,110.60. Whereas the average general manager at a convention center hotel increased $21,570.58 over the 1995 level. 

We continue to see clear distinctions in compensation levels based on property class. The class describes the quality and service level of a hotel. Once again, it is evident that hotels with greater complexities, such as luxury and first class hotels, pay their employees the most. The general manager at a luxury property for example earns $50,000.00 more in salary that the average GM and $95,000.00 more than a GM at a budget property. 

High End Gains Most 

When comparing the 1998 class results, the largest increases in salary are also at the high end of the market. Luxury and first class general managers had increased of $13,491.18 and $13,538.96 , respectively. General Managers at micro - budget properties gained the least in average base compensation following by economy and mid-rate. 

The size of a hotel does matter greatly when comparing compensation. Likewise, as a hotel increased in size so does compensation. When we applied a regression analysis to the data, we confirmed that size was the best predictor of compensation levels. The only exception to that rule was compensation as small luxury resorts and boutique properties located in city centers. 

Further comparison of the data shoed that the highest increases of salary were at hotels with 150-349 rooms. In this category, general managers earned $34,794.17 more than they did in 1995. General managers at hotels with 350-549 rooms followed, earning &17,535.94 more than they did three years ago. Director of MIS also saw significant increase to compensation. We attribute the rise to the increased importance of technology and the demand for more timely financial reporting. 

One of the other factors that can substantially affect compensation is geographical location. East Coast and Mountain Pacific region pay more than their counterparts in the North and South Central. Higher costs of living and larger concentration of hotels in urban markets increased compensation dramatically. Compared to the 1995 data, the largest increases in salary were actually in the Southern United States (South Atlantic and South central Regions). These regions saw much more new build construction and greater competition for employees. 

Compensation can also be correlated to the characteristics of a location. For example, managers at hotels located in center city and resort areas earn substantially more than their counterparts at hotels located along highways or in the suburbs. A general manager at a center city hotel earns an average of 154% more than a general manager at a highway hotel. Such discrepancies are attributed to operation complexity and high costs of living. However, with an increase of only $1,944.23, managers at center city hotels had the smallest increase of average base salary from 1995 to 1998. Those with the largest increases were resort and airport hotels with gains of $9,778.52 and $8,716.73. 

Most hotels offer some form of health coverage to their employees. Some 98% of the industry offers employees health coverage; 53% of companies offered both a major medical plan and an HMO, whereas only 3% offered neither. Over 40% of companies that offer a major medical plan paid in full, and 9% paid the full bill for an HMO, while the rest implemented cost-sharing plans with their employees. With over 70% of companies offering 401Ks, it is evident that this plan is the most popular form of retirement benefit. The perquisites of housing and autos continue to decrease in the lodging industry. 

As the industry remains financially healthy, we predict a continued increase in compensation levels for most hotel property employees. We suspect that compensation increases will outpace the rate of inflation for the foreseeable future. The irony is that although hotel occupancies and room rates continue to increase, the public markets have battered hotel stocks. If hotel stocks continue to languish, employees that have incentives tied to stock price will likely see their overall compensation packages remain flat or decrease. This phenomenon may also put upward pressure on base salaries and bonuses. For the industry's sake we hope that the international financial markets begin to improve so that the bulls will outlast the bears.