Hospitality sector may see up to 15% pay hike: Survey

The Indian hospitality sector may dole out a salary hike of 10-15 per cent this year.

The Indian hospitality sector may dole out a salary hike of 10-15 per cent this year in order to retain talent,as increased movements are expected due to expansion in the segment,says a latest hotel compensation survey by consultancy firm HVS.

While the sector had right sized workforce as well as remuneration packages at the time of economic downturn 2008- 09,it is now facing problem of retention with the upswing in the economy now.

“With the expected opening of 50,000 new rooms across the country,HR managers are working aggressively to implement retention strategies for their key employees wherein the movement could be sharper,” HVS Executive Search India Executive Director Natwar Nagar said.

Nagar further said,”The compensation range for most companies in the current year is under consideration and we believe that the average increase would fall in the range of 10-15 per cent for the key operating functions.”

The study pointed out that owing to the severities of the downturn,all companies are under intense pressure to rationalise their pay scales as this would be the second year wherein no or limited increments have been given out to most of the employees.

While over the past two years,sector has seen pay cuts across employee levels due to occupancies and falling room rates. Resident managers were severely hit as their salaries were cut by up to 46 per cent.

“Several resident managers have been promoted with no replacements,” the survey,which tracked 200 hotels across 52 markets,said.

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During 2009-10,positions like financial controllers saw a 12 per cent salary over 2007-08 period,while executive chefs’ salaries fell 8 per cent,and those of director,general manager and sales marketing declined by 4.

The survey,however,found a marginal increase of 4-7 per cent in salaries of departmental heads across front office and food and beverage.

“The rise in the salaries across the Food and Beverage domain may also be attributed to the emergence of quality stand-alone restaurants and food chains that are recruiting hotel professionals from the said department at extremely competitive packages,” it said.