It's Sales Time! A Survey on Salaries. By Christopher Mumford and Pooja Vir Friday, 26th December 2008

The recent HCE London Hotel Salary Survey reports London hotel Directors of Sales & Marketing saw a 14% increase in average base salaries over last year, making them the highest earners after hotel General Managers.

Average base salaries awarded to hotel executive committee members in the capital rose by 7% in 2008. The recent HCE London Hotel Salary Report published by HVS Executive Search reported an average annual base salary of £62,683, up from £58,598 in 2007.

The survey comprised salary and benefits data from 74 hotels in London in the mid-scale, first class and luxury market segments.

Executive committee and department head positions were surveyed across the areas of salary, bonus, and benefits.

When comparing the average base salaries for Executive Committee positions from 2007 and 2008 we find that the biggest winners were Directors of Sales and Marketing who saw a 14% increase in salary.

This places them as the highest earners after hotel General Managers and reflects how the Director of Sales and Marketing position has grown in importance in the modern hotel hierarchy. Revenue generation clearly outranks service delivery in the earning stakes.

HVS’ research also showed that the bigger the hotel the bigger the salary. Hotels of more than 400 rooms consistently pay higher salaries than their counterparts in the 200 to 400 room, and less than 200 rooms categories.

The higher the class of hotel, the higher the salary as well. The average Director of Sales and Marketing base salary at luxury hotels in London is £74,329 compared to £53,705 at first class properties.

It is the typically held view in most industries that sales professionals respond best when highly incentivised by a performance linked remuneration plan. Often, a salesperson’s salary package comprises a moderate base salary and a high yielding bonus which can significantly increase their annual earning potential.

It was therefore surprising to note that, on average, the bonus element comprised just 13% of a London hotel Director of Sales and Marketing’s total annual remuneration.

Yet more surprising was that Directors of Food and Beverage and Directors of Rooms make more of their earnings in the form of bonus than their Sales and Marketing colleagues as illustrated below. 

It appears therefore that a huge part of the Director of Sales and Marketing’s take home pay has no direct connection to their performance during the year but, rather, is in the form of fixed pay.

It is not just the heads of Sales and Marketing, who one could argue have a great deal of management responsibility in addition to their personal sales goals, which are in this position. Our review of Sales Managers’ packages, for example, found that bonus only accounts for 9% of their cash compensation.

Quality Sales and Marketing people are always tough to come by and are expensive to lose, especially in such a competitive market as London. The perceived value of Directors of Sales and Marketing has therefore driven up their price over the years to a point where they command the salaries they do.

We would however encourage hotels to weight the bonus element more heavily and to truly incentivise strong performance with more generous bonus awards.

If recent economic downturns are a guide, Sales and Marketing is a department which often experiences a higher rate of employee turnover as high salaries stand in contrast to a lack of results. A stronger emphasis on performance related pay and less on fixed salary could help address this and help separate the strong performers from the weak.

A harsh economic environment leaves little place to hide for a mediocre sales person who had been made to look exemplary by the previous boom times. Sales and Marketing comes under the microscope from hotel owners and management companies and a change at the top is often deemed necessary to bring a change in fortunes.

It will therefore be interesting to note in next year’s survey if Sales and Marketing salaries have increased yet again due to an increase in movement of talent from one hotel to another during these tough trading conditions.

www.hvs.com