Hospitality Companies Hire
Essential Managers
By
Perri Capell
Some
parts of the hospitality industry are more
hospitable to job seekers than others. The slack
economy, threat of terrorism and the prospect of war
are wreaking havoc on hotels. Until the national
mood and travel spending improve, recruiters expect
few new hotel jobs to be created and only modest
hiring demand, mainly for budget-conscious
operations and sales managers who can help companies
to maintain market share. But while Americans aren't
traveling as much, they're still dining out.
Restaurants remain a bright spot in the industry
hiring picture.
Facing
declining revenues, many hotel operators are looking
to cut costs. "They can't raise the rates for rooms
or food anymore, so they have to reduce payroll,"
says Jonathan Spatt, president of Hospitality
Executive Search Inc. in Boston. "Companies are
releasing two people and hiring one, and the one
they hire costs less money."
Meanwhile, U.S. restaurant revenue continues to
grow. Restaurant-industry sales are expected to
climb 4.5% to $426.1 billion in 2003, the 12th
consecutive year of growth for the industry,
according to the National Restaurant Association.
Industry employment should increase by about 100,000
to 11.7 million in 2003, following a 170,000 dip in
2002, much of it due to technology additions, says
Hudson Riehle, senior vice president of research for
the N.R.A.
Demand
for restaurant managers will continue to climb due
to restaurant expansions, notes Mr. Riehle. In 2002,
restaurants added 12,000 new units. "Even in a
period of modest growth, capacity expanded and you
need more management than ever before," he says.
Hotel-Industry
Hiring
Because it is linked so closely to the travel
industry, the hotel industry has suffered more than
others from terrorism fears. While recruiting has
rebounded considerably since Sept. 11, it hasn't
approached levels of the mid- to late-1990s, say
recruiters. Says Keith Kefgen, president of HVS
Executive Search in Mineola, N.Y., "search work
domestically is now down about 25% to 30%" from
2000, which was probably one of the best years in
three decades for the business.
Hotel-room occupancy in 2002 was 59.2%, down from
63.7% in 2000, reports Smith Travel Research, a
Hendersonville, Tenn.-based lodging analysis firm.
Moreover, many travel managers plan to spend the
same or less on business travel this year than in
2002, according to Lodging Magazine, published by
the American Hotel and Lodging Association in
Washington, D.C.
Mr.
Kefgen notes that new positions are rare because few
new major hotel properties are being developed.
Further, casino companies have been doing less
hiring, partly because no new states or
jurisdictions have legalized gambling.
The
prospect of war with Iraq also is causing
recruiters' phones to ring less, says hotel
recruiter Joseph Radice, president of Hospitality
International Inc., a New York City-based search
firm. "There's been a lull in the last couple of
weeks, which has to do with everyone holding off
because they're wondering if there will be a war,"
he says.
Typically, companies are seeking only essential
operations and sales executives, and only seasoned
industry veterans are being considered for them.
Usually, hiring is to replace executives who leave,
not to fill newly created positions. Corporate
executives and property managers who can steer
companies through a no-growth period -- when cost
cutting and business development are essential --
are in demand. Among the hottest jobs are general
managers and sales managers for individual
properties.
Ideal
candidates for general-manager positions should have
large-hotel experience and an excellent track
record, says Ken Herst, owner of Hotel Executive
Search and Consulting in Bellaire, Texas. They're
hard to find because "most people with this type of
experience aren't leaving" their employers, says Mr.
Herst.
Some
hotel companies seek general managers with the
potential to be promoted within their organizations.
When a New York City company with 10 hotels promoted
a GM of one of its hotels to chief marketing officer
last fall, it needed to find his replacement. The
successful candidate had sales-and-marketing
experience and came from another hotel in the Big
Apple, says Mr. Radice. "This is a company that
generally promotes from within, so when they look
outside, they seek someone who can offer something
they don't have," he says.
Joining a New
Company
Indeed, hotel companies have trouble keeping their
best GMs. John Russell was with Ritz-Carlton Hotel
Co. for eight and a half years, most recently as GM
of its largest project, the Ritz-Carlton
hotel-and-spa complex in New Orleans. He supervised
the restoration of its 100-year-old building and the
2000 opening. The project now houses three hotels
offering 757 rooms. Prior to that, Mr. Russell
helped open the Ritz-Carlton in San Juan, Puerto
Rico.
"I had
worked in 17 hotels in my career, five as a GM with
Hyatt Co., and then with Ritz-Carlton, and I had 18
to 19 years ahead of me of pretty much the same
thing," says the 46-year-old Mr. Russell. "I thought
I had accomplished everything I wanted in terms of
hotels."
Although Mr. Russell hadn't been actively looking in
late 2002, it was clearly an opportune time for a
new employer to approach him. He had worked with and
admired Horst Schulze, the former president of
Ritz-Carlton, who had started a new hotel company --
West Paces Hotel Group in Atlanta -- to manage hotel
properties. West Paces executives approached him
about the position of GM of its first client -- the
Auburn University Hotel and Dixon Conference Center
in Auburn, Ga., a 248-room full-service
hotel-and-conference center adjacent to Auburn
University.
Mr.
Russell was interested in the position because it
offered him a chance to teach as an advisory member
of the faculty at Auburn University, create West
Paces' procedures for managing its hotels and get in
on the ground floor of a new enterprise. "This is a
frustrating time to be in the industry because as
hard as you work, the ability to impact revenues is
sometimes limited," he says. "I needed a change, and
the chance to join West Paces, use what I had
learned and be a part of the university's hotel
school was very exciting."
Salaries for hotel executives have increased
slightly since 2000, notes Mr. Kefgen, whose firm
conducts an industry pay survey every two years.
Increases were greater for general managers, sales
managers and some culinary jobs, he says. However,
bonuses for most executives have declined due to
economic conditions.
Still,
hotel candidates who were recruited received pay
increases to move last year because of their
perceived value to employers, says Mr. Radice.
"Companies want these good people, so they'll pay
more," he says.
General managers of hotels with between 550 and 800
rooms earned a median salary of nearly $146,000 in
2002 compared to $133,274 in 2000, according to HVS.
Mr. Russell, who starts his new position on March 1,
says he's taking a cut in pay for his new job, but
has the opportunity to earn more than he did with
Ritz-Carlton if West Paces succeeds.
Top Hotel-Company
Executives
Some
companies are seeking new leaders to replace top
executives who haven't been successful, says Mr.
Kefgen. "They need leaders who are more
operationally oriented than growth or merger
oriented," he says. "They might want heads of
operations or sales and marketing who can drive the
top line, or they might be losing market share. If a
company isn't getting its fair share in a down
market, heads are going to roll."
He
recently recruited Jerry H. Herman as the new
president and chief executive officer of Arlington
Hospitality Inc., an Arlington Heights, Ill.,
company that owns or manages 73 mid-priced hotels,
primarily under the AmeriHost brand. The company had
installed new board members following a proxy fight
and wanted an experienced hotel executive to help it
grow, says Mr. Kefgen. Mr. Herman, a 20-year veteran
of the industry, most recently was managing director
and president of City Hotels USA Inc.
Hotels
also are seeking qualified candidates for
specialized jobs, such as directors of security or
managers of properties in remote locations. Mr.
Herst cites a director of security job for a Houston
luxury hotel and a hunting-lodge manager position
for a West Texas resort as typical of such
assignments.
Candidates for the security job should have hotel
experience and a background with a major
law-enforcement department or agency. "They don't
want a gun-toting person," he says. "They want a
top-notch professional who can be a manager and
supervisor."
Meanwhile, the hunting-lodge manager should be an
expert in raising and hunting birds. "They need bird
and hospitality experience," says Mr. Herst. "This
costs $3,000 to $4,000 for three to four nights, and
if you're going to spend that much for a few days of
hunting, you want to be pampered."
More
hotels are eyeing catering as a way to build
revenues, and Mr. Herst is seeking several catering
directors and sales managers for various hotels.
Typically, finding qualified directors of catering
for four- or five-star hotels is difficult since
there are a limited number of such hotels in most
cities. Candidates should have degrees in hotel or
restaurant management or sales backgrounds. On
average, they might earn $40,000 to $80,000
annually, plus commissions, he says. However, some
catering directors can earn much more. For instance,
Mr. Herst is seeking a catering director for an $8
million department in a Northeast hotel, who would
earn up to $125,000 annually, plus $25,000 to
$50,000 in commissions.
Mr.
Herst notes that executives who lack hotel-industry
experience are rarely hired for hotel jobs,
especially through a recruiter. However, many
individuals believe they're qualified to manage
hotels "just because they have stayed in one" and
apply for these positions anyway, he says.
Restaurant Managers
The
restaurant industry has been affected less than the
hotel sector by the decline in travel. Due to high
turnover among restaurant managers, such positions
are always available, say recruiters.
Sales
of restaurant-job postings on Hcareers.com, a Web
site for the hospitality industry, have increased
lately, while those for hotel positions remain level
or have declined slightly, says David Curry, CEO of
the Vancouver-based company. "With people not
traveling, they are going to eat out more," says Mr.
Curry. "We have seen a 10% upswing in sales [of
restaurant job postings] in the past three months."
In the
fourth quarter of 2002, the overall number of
postings on Hcareers.com increased by 15% from the
prior three-month period. Of the roughly 7,100
openings listed on the site, 77% are defined as
management, which means the position has the word
"manager" in its title or is supervisory.
Mr.
Herst says he always has openings to replace
managers of hotel, chain and independent restaurants
who have left. Turnover is high because such
employers "are notorious for not taking care of
their people, such as not keeping their promises on
bonuses," he says. Restaurant managers nationally
earned a median salary and bonus of about $56,000 in
2002, compared to $53,000 in 2000, according to HVS
Executive Search.
In New
York City, restaurants are still opening, but more
are closing, so recruiting for managers is tepid and
often done through word of mouth, says Mr. Radice.
Lately, a few New York restaurant companies have
asked him to find controllers who can help watch
costs.
Mr.
Spatt says most of his restaurant assignments are to
find hotel chefs. Recently, he helped recruit a
well-known California chef as a candidate for a
$160,000-a-year corporate chef's position with a
hotel chain in Florida. The chef flew to Florida to
have lunch with the owner of the chain and interview
for the job. When the owner put salt on his food
without tasting it first, the chef decided he didn't
want the position. He flew back to California
without discussing it with the owner, says Mr. Spatt.
Eventually, another chef was recruited for the job,
and the California chef took a different position.
"You have to understand that a chef thinks of food
as a work of art," says Mr. Spatt. "He felt the
owner would be so indiscriminating that he couldn't
work for him."
-- Ms. Capell is a senior correspondent for
CareerJournal.com. She can be reached at
frances.capell@dowjones.com.
