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Lodging Industry 2012 Wage Increases- Part 1

The year 2012 will be remembered as the comeback year for hourly wage and salary increases for the employees of the lodging industry. The industry had across the board wage increases for both hourly and salaried employees as reported by over 5,000 hotels in the WageWatch hospitality compensation survey for 2012. Overall, wage and salary increases were reported as 2.6% for the year, which was almost double last year’s increase of 1.4% reported by WageWatch in its PeerMark™ Wage Survey for 2011 and follows a period of wage stagnation reported in the industry from 2008 to 2010.

This past January, WageWatch surveyed over 3,400 hotels and disclosed in its 2012 wage forecast budgeted pay raises averaging 3% for exempt and nonexempt employees in the lodging industry. The median and mode were also 3%. There was also very little difference between full service hotels and limited or select service hotels, with the later budgeting 2.9%.

Compensation increases reported in the WageWatch wage survey for the lodging industry as of October 23, 2012 shows little difference between the percentage wage increases for full service hotels and limited or select service hotels for similar positions. This is the first year since 2008 that limited/select service properties have kept pace with their full service brethren.

Pay raises for 2012 came in the face of slower than expect economic growth in the U.S. The consensus economic forecast last December was for economic growth in the range of 2.0 and 2.5 percent for 2012. Through the third quarter of 2012, economic growth is estimated to be mired at 1.7%. In spite of this lackluster economic performance, the lodging industry continues to strengthen.

The President of WageWatch, Randy Pullen, stated earlier this year that he expected strong wage increases, as well the as the WageWatch forecast for an increase in lodging employment of an additional 25,000 jobs, to come to fruition as the lodging industry continues its post-recession improvement in both occupancy and rate.

Interestingly, if the lodging pay raises are examined at a more detail level, several “hot jobs” or hard-to-fills jobs can be identified nationally as well as in several city markets. We will focus on a few of the hourly jobs for the lodging industry this week and take a close look at salaried jobs in next week’s Blog.

Front of the house and back of the house wage increases were essentially the same, with front desk agents receiving on average 1.8% increases, while housekeepers and house persons received 2.4% and 2.1% increases. The relatively smaller increases for these positions when compared to the lodging industry average is not unusual as they are entry level positions with higher turnover, which results in the starting wage rate having more impact and are tipped positions In the hotel kitchens, bakers and cooks received 3.2% and 2.1% pay raises. Again, cook is an entry level position and more dependent on the starting rates, which changed very little from year to year.

The biggest increases for hourly workers went to the maintenance department with maintenance technicians I and II receiving on average 5.5% pay increases. Qualified maintenance technicians are hard to find due to multi-industry demand on this skill set and are considered to be hot jobs.

At the supervisor level, housekeeping supervisors received on average a 2.3% increase while front desk shift supervisors received 2.9% increases and night auditors receiving 3.7% increases. In the kitchens, sous chefs received on average 2.9%.

Next week, we will review the salary survey increases in our blog. Needless to say, the maintenance department does well with chief engineers receiving on average 17.6% increases … more next week.

WageWatch, Inc. is the leading compensation survey provider for the lodging industry with over 5,000 hotels participating in its PeerMark™ Wage survey. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.