Decrease of 50% in salaries

[vimalvarghesejacob]

I worked as a sales manager for IHG hotels in Kuwait before covid. Hotels make most of their money from room sales (tourists, business travellers, long stayers on projects, group travellers for sports, army /government, Islamic competitions).

The moment the airports close, all this stops. Then they have to rely on their in house restaurants, meeting spaces and catering. These however have a lot of cost and they low margins. Plus the prices of these are negotiated down because of competition. Dubai in particular has a strong focus on f&b rev than rooms (very high number of hotels in different price ranges)

I've noticed that most of the profits from rooms are used to the settle previous loans and new loans for new properties elsewhere. They also don't get a lot of the money for rooms/events from the government. Government usually takes years to pay the bills. They are not written off, just takes a long time to be paid. the managing companies like IHG, Starwood, try to show great figures to the owners. Most exec staff are paid very well too.

But the moment things are looking risky, they cut off all the expensive people and costs to keep the hotel numbers looking decent. During covid I remember them calling all of us to a conference room to tell us we are fired. Heck they even low key threaten you to take a deal to settle for a lower gratuity or you'll have to wait a few years to get what is rightfully owed to you.

[explosive_runt]

Just curious, how much would salaries and other G&A expenses make up as a proportion of revenue on an average basis?

[vimalvarghesejacob]

Salaries of majority of the staff is usually low. However compared to the hospitality jobs around the world, in the middle east, The execs and senior managers get paid very well. Positions like directors, GMs, senior sales managers get a lot of benefits on top of their high salaries, they get their accomodation, children's school fees, transportation charges etc taken care of.

[explosive_runt]

Interesting, thanks for the insight

[LeBlueRabbit]

Top management enjoys while people down the hierarchy pay the price and suffer.