Just recently we completed our 1998 HCE Lodging Property Report, and below we have shared an excerpt of the national results. A more detailed analysis will be presented in the November 7 issue of HOTEL BUSINESS, corresponding to the International Hotel/Motel & Restaurant Show. The national results examine the compensation trends of seven key positions at the hotel property level. The results include data from nearly 5,000 North American properties. We also compared the 1998 results to data collected three years ago in our initial survey.

With the inflation rate at about 3% per year, six of the seven positions have compounded salary increases greater than inflation. For example, a controller in 1995 earned an average base salary of $50,153.05 and in 1998, $55,938.91. That translates to a 3.7% compounded increase. With the exception of director of sales & marketing, the average compounded increase for the remaining six positions was 3.9% per year.

By far, the largest increase in base salaries and bonuses were granted to general managers. The average base salary of a GM increased by $11,485.64 to $77,950.05, while the average bonus increased by over $6,000. Why such a large increase? We feel the reasons lie in the changing role of the GM. Today's GM is more business savvy, better educated and fully understands the investment side of the business. In addition, many hotel companies instituted more aggressive incentive plans as a motivation for superior financial performance.

In contrast, the smallest increase in base salary was earned by the directors of sales & marketing. However, they brought home $1,209.72 more in bonuses. We were surprised at the small movement in sales and marketing department salaries. Most of the major operators said that sales professionals are increasingly being compensated with modest salaries in tandem with aggressive incentives. We predict continued upward pressure on compensation, as the industry remains healthy.