What Are You Worth?

Hospitality Technology is pulling back the curtain on one of the most sought-after and hush-hush topics: salaries. We polled a sample of 275 executives from across the hotel and restaurant industries, representing a variety of sub-segments, departments, and titles, to find out how much they’re earning. (See Figures 1 and 2 for a breakdown of respondents by industry segment and by job title.) The findings of the 2011 Salary Survey also offers insight into the education level, length of work-week, and benefits packages that are common among hotel and restaurant executives.

 

Who’s pulling in the most pay? In foodservice, the biggest money is on the franchisee side,
with finance executives earning an average annual salary of $212,500, including all forms 
of compensation. In hotels, the highest earners in 2011 are corporate brand executives earning an average of $196,766. IT executives at corporate brands, meanwhile, earn an average
of $167,916. But those are the top earners in their respective categories. Factors such as education and gender can bring salaries well below the six-figure mark.
 

Pulling in these salaries — and in fact working in the hospitality industry in general — requires more than a commitment to traditional hospitality values such as good food, comfy beds, and quality customer service. This survey also reveals that hospitality execs are, in general, a well educated group who work long hours and who count personnel management among their many job responsibilities.

 

The survey asked respondents to share details on such factors as number of direct reports, highest education level achieved, years of service at their companies and in their current roles, and more. Here’s what we learned. The average work week for a hospitality executive lasts 51 hours. Just 3% work up to 40 hours. Meanwhile, just under half (43%) work a 41 to 50 hour week; another 41% work 51 to 60 hours; and 13% log more than 61 hours per week. The vast majority (90%) are responsible for managing other employees. Of those, 30% have up to 5 direct reports; 20% have somewhere between 6 and 15 direct reports; and 40% manage more than 15 people. When it comes to education, there’s again a clear leader. Nearly two-thirds (62%) have earned a bachelor’s degree or higher. An additional 12% have an associate’s or technical degree and 22% have some college. In total, 96% percent of hotel and restaurant executives have an education beyond a high school diploma/H.S. equivalent.

 

As to years of service, the survey confirms anecdotal stories of former-server turned CFO. Hospitality is a ‘work your way up through the ranks’ industry. The average age of a participant in this survey is 45 years old. More than half of all respondents (52%) report that they have been in the hospitality industry for at least 20 years, and in fact 19% have been working in hospitality for 30 years. That means that many entered the hotel and restaurant business between ages 15 and 25, most likely in service-level positions. In terms of upward progression, the survey indicates that hospitality companies do promote from within. Overall, hospitality executives have been with their current company for an average of 11 years, but have been in their current position for 8 years (and in fact, 45% have been in their current position for less than 5 years).

 

After months of headlines detailing the rising unemployment rate, hospitality executives have good news to report. Overall, more than two-thirds of all hospitality executives in the survey (67%) received an increase in compensation in the past 12 months. Of those who received an increase, just over a third (37%) received a 3% raise and another third (32%) received a 2% to 4% raise; 18% received an increase of between 5% and 9%, and at the top of the scale, 7% of executives received a 10% bump in salary in the past 12 months. On the flip side of that, just 3% had a salary reduction over the past year. Approximately 30% of the industry will earn the same compensation in 2011 as compared to 2010.

 

Hotel executives were asked to classify their employer into one of three major industry sub-segments: corporate brand entity, property management company, or independent owner (including franchisees). Figure 3 shows the average salaries for each of the following departments within those industry segments: corporate management, finance, technology, operations, and sales/marketing. Executives in IT that are employed by the corporate brand are compensated at a rate that’s nearly 50% higher (with a 2011 average of $167,916) than their counterparts at property management ($112,423) and independently owned hotels ($109,500). Compared to other departments, IT execs at the corporate brand also out-earn their colleagues in finance ($125,000), operations ($78,571) and sales/marketing ($146,357). At property management companies and independently owned hotels, however, IT executives are compensated about the same and in some cases less than finance and operations colleagues. Sales/marketing executives at independently owned hotels represent the department with the lowest compensation with a 2011 average of $57,500.

 

 

Figure 4 details average salaries, by title, across the three hotel industry sub-segments. Titles are broken down as: chief technology/information officer (CTO/CIO); C-level non-IT (CEO, COO, CFO); senior management in both IT and non-IT roles (including senior vice president and vice president); mid-level managers in both IT and non-IT roles; and IT staffers in non-management roles (network analyst, software developer, etc.).

 

In general, corporate brand employers offer higher compensation across all title segments (with the exception of CIO, which receives its highest compensation at property management companies). Also of note, the title “CIO” at independently-owned hotel companies did not have a high enough occurrence in this study to provide relevant data. There were, however, a statistically significant number of senior IT managers. This could imply that the CIO/CTO title is uncommon at independently-owned hotel companies. There is not a statistically significant difference in compensation between senior managers (VP, SVP) in technology roles, versus those in non-IT roles. Similarly, mid-level IT managers earn compensation that’s on par with mid-level managers who are not in technology roles.

 

The impact of education on compensation is highest at property management companies. There, executives with a master’s degree will earn $188,356 in 2011; that’s nearly 42% more than the average salary for an executive with a bachelor’s degree ($132,027) employed by a property management company. Those with some college will earn $71,428.

 

Executives in the restaurant industry were asked to identify their employer as either corporate brand or franchisee. In addition, respondents identified their position as falling under one of the following departments (Figure 5): corporate management, finance, technology, operations, and sales/marketing. The highest earners in the foodservice industry work in the finance department under the employ of a franchisee ($212,500). Rounding out the top three are corporate management executives at the brand entity (at $188,717) and franchisee corporate management executives (i.e. the franchisee’s CEO/president/owner, earning $183,167). Technology executives at the corporate brand entity, earning an average salary of $139,894, are compensated nearly 55% more than technology executives working at franchisees ($89,750). What’s more, the top-earners (franchisee finance execs) are compensated at a rate that’s more than double that of their IT colleagues. The department with the lowest annual compensation is corporate brand operations ($82,916). There was not a statistically valid number of sales/marketing executives at franchisees in this study.

 
 

Figure 6 shows how salaries vary based on title. The highest compensated are C-level executives. Similar to independently-owned/franchised hotels, there are not a significant number of CIO titles represented in the foodservice franchisee segment and are therefore not included in this study. However, senior management (VP, SVP) titles at franchisees earn $91,666, compared to non-IT senior managers who earn on average $120,000.

 

Education in foodservice has its greatest impact for those with doctorate degrees at corporate brand entities, with an annual compensation of $300,000 this year, compared to $178,749 for a master’s degree and $153,434 for a bachelor’s degree.

 

When it comes to benefits, it’s a mixed bag for hospitality executives. The vast majority receives medical insurance (88%), and dental insurance (83%); slightly less have a vision plan (69%). Most get vacation time (85%), a 401k (73%) and sick time (61%). The benefits that are still hard to come by fall under quality-of-life areas: 20% can work from home; slightly more, 34%, have flexible scheduling; IT training is offered to 21%; and tuition assistance is offered to 19%. Maternity leave is offered to 24% and some form of paternity leave is granted to 10%.

 

Perhaps the single most compelling factor to come out of this study is in the area of gender. The percentage of men in executive hospitality roles outranks the number of women; in our survey, just 17% are female and 83% are male. In the hotel industry, they are also compensated noticeably less than males in the same departments and titles. Here’s how it breaks down: in corporate hotel environments, the average male executive will earn $167,843 and the female executive will earn $104,802 in 2011; at hotel property management companies, a man will earn $133,657 and a woman will earn $89,749; at independently owned hotel companies, a man will earn $128,837 and a woman will earn $85,166. At foodservice companies, the difference is significantly less: in the corporate environment, a man will earn $151,786 and a woman will earn $143,249. Women earn their highest amounts when working for foodservice franchisees, making an average of $151,124 in 2011 and in fact out-earn their male franchisee colleagues, who will make an average of $133,931 in 2011.