Hospitality is one of the fastest growing industries in the GCC region, with more than promising future. GCC hospitality market is expected to grow at an annual rate of 8.1 percent to USD 28.3bn by 2016. Propelled by mega events like FIFA World Cup 2022 in Doha and Expo 2020 in Dubai, new hotels are sprouting all over the region. Qatar’s plans are to invest USD 20bn on tourism infrastructure: 21 new hotels are planned by 2017, while Dubai’s Department of Tourism and Commerce Marketing estimates that there will be between 140,000 to 160,000 new rooms needed by 2020. Currently, around 40,000 rooms are under construction in Qatar, UAE and Saudi Arabia.
New hotels need new, skilled workforce, but that could present a problem. Already, the people working in the sector are deeply dissatisfied with their individual pay packets and many, especially the most experienced ones, are looking for better opportunities. A recent Salary Survey 2014 conducted by Hotelier Middle East and conducted among 490 hoteliers across the GCC region, revealed that 45 percent of respondents are being paid USD 1,500 to USD 3,000 per month, while 44.6 percent of them said that salary would be very important deciding factor to change company. And most importantly – despite the industry doing very well and making more profits year-on-year, the salaries in the sector aren’t rising.
“There was no chance for promotion or better salary”
“I left because there was no chance for promotion or better salary”, our source who wished to stay anonymous, gives her reasons for leaving one of the best hotels in Doha. With the prestigious international diploma in Hotel management from Switzerland, and previous international experience in various European countries, she worked there as Food and Beverage Manager for more than a year. But as soon as the chance came up, she terminated her two-year contract and left. “I was earning USD 3,600 a month, better than average, but I wasn’t satisfied. In fact, all my co-workers, who came from European countries like Ireland, France and Italy, left their positions, which were mostly middle management or executive. Most of them went to Dubai, where work conditions are better and wages much higher compared to Doha. We were replaced by workers without experience, mostly from Asia, who are, because of poor economies at their home countries, taking whatever they can get – lower salaries, packages without housing allowance etc.”, said our source. She is convinced that Qatar’s hospitality industry, targeting the high-paying customer, can’t meet the guest’s expectations with unskilled, inexperienced workers. Even those working in 5-star hotels, speak poor English and are not fluent in other languages, if they can speak any at all. And their lack of experience in such prestigious establishments is lowering the quality of service. The problem is, also, a very high workforce fluctuation in hotels, where people are leaving after a short period, in constant search for a better salary. This happens especially with line staff, and results in constant orientation periods for new workers which, again, lowers service quality. “Hotel owners like workers from Europe and the US because they are educated, experienced and most of all they give the ‘Western flare’ to the establishment, but to keep them, they will have to pay them according to their skills and experience”, our source is adamant.
Doha, Abu Dhabi and Jeddah performing well
June data from the latest HotStats survey of full service hotels in Doha, Abu Dhabi, Jeddah, Cairo and Sharm El Sheikh shows that GCC hospitality industry is the leader in the field, with some of the highest average daily room rates and strongest occupancies growth in the world. In the first six months of 2014, Doha had an 11.4 percent growth in occupancy (currently 75.9 percent), with revenue per available room (RevPAR) jumping by 11.5 percent to USD 166.66 despite average room rates (ARR) declining 5.3 percent.
In Abu Dhabi, occupancy levels are raised by 4.9 percentage points to 78.2 percent, and drove RevPAR up by 6.8 percent, while in June, ARR and occupancy increased by 4.8 percent and 3.7 percent respectively, prompting RevPAR to rise 11.4 percent to USD 85.25. In Jeddah hotels average room rates surged in June by 15.5 percent to USD 305.92 and despite occupancies declining 3.1 percentage points to 82.3 percent, ARR drove RevPAR growth of 11.3 percent to USD 251.71.
Beating about the bush
While hotels and hotel chains like to advertise this kind of numbers, the managers were predictably, not so vocal when asked to comment on the salary survey and to answer the crucial question – will the low salaries drive skilled workers away from hospitality industry in the region.
Guido De Wilde, Senior Vice President, Regional Director Middle East, Starwood Hotels & Resorts Worldwide, Inc said: “At Starwood we promote a culture of diversity and inclusion; we are a truly global company with over 1,180 properties and more than 181,400 associates around the world. Our focus continues to be nurturing and combining the many talents and skills of our team members. The outlook for the hospitality industry in the Middle East remains positive, this is a key market for us so the results are encouraging and certainly something we’re proud of achieving.” Similarly vague answer came from Ben Bengougam, vice president of HR, EMEA, Hilton Worldwide, who said, “Hilton Worldwide values its team members, constantly evaluating our employee proposition using recognized industry benchmarking tools. We believe that the overall employment experience is crucial to our success and in the Middle East we continually score highly for engagement and trust in our own team member opinion surveys. As we grow our portfolio in the region, we are focused on providing long term and rewarding careers by offering industry leading learning and development programmes; best-in-class working environments; community volunteering opportunities; team member recognition; as well as fast track training programmes enabling talented individuals to rise up the ranks of our global organization.” Other major hotel chains in the region either declined to comment or didn’t respond at all.