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Only 20% of hotel sales executives and revenue managers would recommend their compensation plans to others a new survey finds.
The goals hotel brands give their sales and revenue teams play a big role in keeping incentive pay down for these employees and help lead to the dissatisfaction, according to a survey from ZS, a global business and marketing solutions firm, and HSMAI, which received responses from more than 500 hotel sales and revenue executives from the U.S. and Canada.
Respondents said more differentiated earnings and effective goals are the top motivators that would make them more satisfied with their compensation plans. The average hotel sales and revenue manager isn’t hitting his or her goals which is unlike other industries, claims Tony Yeung, a principal at ZS who led the study.
“In many cases hotels are setting what we call ‘stretch’ goals for their sales and revenue managers that aren’t that attainable,” said Yeung.
“I’m hesitant to say that incentive pay in the hospitality industry is reliant on demand because demand has been very high for the last few years. The problem is that historically hotels are looking at the projected demand and then stretching those numbers above and beyond what’s expected.”
Attributing where a hotel booking comes from isn’t getting any easier, either, as Skift reported last week. The study found this is another major reason for the dissatisfaction given the growing number of online travel agencies and intermediaries making it difficult to tie bookings with sales and revenue manager’s performances.
About half of respondents said there’s relatively low incentive pay differentiation between top and average performers in their compensation plans and indicated high performers receive 50% more incentive pay than average performers. Yeung said in other industries, such as tech and healthcare, top sales and revenue performers often earn two or three times more incentive pay than average performers.
To help reverse employee dissatisfaction, ZS and HSMAI recommend a stronger focus on pay-for-performance, establishing more realistic goals and implementing better tools making it easier for teams to track their performances and progress towards their goals.
Large hotel properties each spent an average of $253,000 on incentive pay for their sales and revenue management teams in 2014, the survey found.