2019 India Hotel Manpower Study© – Synopsis

by and Feb 12, 2019Executive Search, Hotel Operations

The Indian hospitality sector has been witnessing a steady growth in rooms supply, with 1,28,163 rooms operational in the branded segment in 2017/18 – this represents a 7.5% increase over the previous year and a CAGR of 11.4% since 2008/09. In the next five years, Hotelivate anticipates a little over 35,000 rooms to be developed, growing the existing base by 28% and taking the total rooms supply to 1,63,733. In an industry where each hotel company is looking for opportunities to outperform the other, the rise in supply of rooms has put additional pressure on the Human Resource (HR) function to ensure a steady stream of quality manpower. We have been closely monitoring the industry’s requirements for superior talent and adherence to payroll cost benchmarks for more than a decade now. However, today’s young General Manager is more concerned about a higher hotel occupancy than reviewing other critical factors that can potentially contribute to a more robust bottom line. Payroll cost, one of the largest hotel operating expenses, unfortunately, is a subject of discussion only within the HR fraternity and it fails to attract the attention of those at the helm of running the day to day operations of a hotel.

According to a study conducted by WorldatWork in 2018, India maintains the largest salary increase budget of all countries surveyed, with an average historical budget increase of 10% and the projections for 2019 remain steady at that level. It is also prudent to mention that various market reports are suggesting a global economic slowdown, and India is likely to see the glimpse of its shadow. Thus, in order to support a positive and robust year for the hotel industry, we would like to share a note of caution that requires further deliberation by industry stakeholders and leaders:

  • “Uberisation of services”, or in simple terms, outsourcing, is worthy of contemplation across hotel departments (front and back of the house).
  • Budgeting a conservative Payroll cost and implementing stronger cost control measures will be helpful to the business.
  • Performance measurement tools and long-term incentive plans will require greater enhancement and consideration.
  • Leaders and key stakeholders of hotel companies should lay greater emphasis on cost of attrition and the impact of cost of re-training of skilled resources on the annual budget.

The 2019 India Hotel Manpower Study© surveys 204 hotels across 68 cities and several domestic and international hotel chains, providing a detailed analysis of payroll cost, employee productivity, room to manpower ratio and annual attrition percentages across key parameters. The study endeavours to serve as a one-stop credible guide for hotel investors, owners, developers, operators and professional advisors, seeking an in-depth insight into payroll cost structure and related statistics. This pioneering research will assist upcoming hotels to plan their manning and payroll budgets, while enabling existing hotels to review theirs; thus, supporting you to manage your businesses better.

The specific objectives of the study include:

1. Understanding the structure/definition of payroll cost as interpreted by various participating domestic and international hotel companies.

2. Analysing Annual Revenue and Annual Payroll Cost

– Annual Payroll Cost as % of Total Annual Revenue

– Annual Revenue per Employee

– Annual Payroll Cost per Employee

– Annual Payroll Cost per Occupied Room

– Annual Payroll Cost per Available Room

Figure 1: Excerpt from 2019 India Hotel Manpower Study© Payroll Cost and Revenue Analysis (Jan-Dec 2018): All-India Average and Hotel Market Positioning

All-India Average and Hotel Market Positioning

3. Analysing Productivity Statistics for Rooms and Food & Beverage (F&B) Departments

Rooms Division

– Rooms’ Revenue as a % of Annual Revenue

– Rooms’ Payroll Cost as a % of Annual Rooms’ Revenue

– Annual Rooms’ Revenue per Hotel Employee

F&B Division

– F&B Revenue as a % of Annual Revenue

– F&B Payroll Cost as a % of Annual F&B Revenue

– Annual F&B Revenue per Hotel Employee

4. Analysing Room to Manpower Ratio

– Average Manpower Levels that Indian Hotels Currently Operate At

– Average Manpower Levels Across Hotel Market Positioning in India

– Average Manpower Levels by City Classification

– Average Manpower Levels by Number of Rooms

Figure 2: Excerpt from 2019 India Hotel Manpower Study© Comparison of Manpower Ratios Across Rooms and F&B Divisions (2011/12 and 2017/18): All-India Average

All-India Average

5. Analysing Annual Employee Attrition

– Attrition Percentage at an All-India Level

– Attrition Percentage Across Hotel Market Positioning in India

– Attrition Percentage Across Seven Major Hotel Markets

To serve specific requirements, Hotelivate Executive Search can also prepare paid research reports[1] such as:

– 2019 India Hotel Manpower Study© by Hotel Market Positioning

– 2019 India Hotel Manpower Study© by Nine Major Indian Cities which include Bengaluru, Chennai, Goa, Hyderabad, Jaipur, Kolkata, Mumbai, New Delhi-NCR, Pune

– 2019 India Hotel Manpower Study© focussing on Payroll Cost and Revenue Analysis

– 2019 India Hotel Manpower Study© focussing on Employee Productivity Statistics

– 2019 India Hotel Manpower Study© focussing on Manpower Ratios & Employee Attrition%

– Customised reports comparing an Individual Hotel/Chain’s payroll cost and revenue data to that of a Defined Competitive Set’s aggregate

*With critical analysis and editorial contributions from Juie Mobar, Director – Special Projects, Hotelivate

**For more information and/or pricing, please contact [email protected]

[1] Please note that Hotelivate reserves the right to withdraw a publication at any given point in time without prior intimation if it finds the data inadequate for a meaningful representation.


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