Indian hotels face rising manpower costs

The hotel industry in India is faced with a shortage of quality professionals and a sharp rise in payroll costs. The crisis is set to deepen with the number of hotel rooms set to more than double in five years.

“There is a lot of pressure on hotel bottom lines,” says Natwar Nagar, managing director of HVS Executive Search that helps hotels recruit staff. “The demand for manpower from across new hotels is coming up and supply is naturally restricted. Hence there has been an increase in per-employee costs by default,” he says.

Hoteliers say their payroll costs have almost doubled in the last three years. Dilip Puri, managing director at Starwood Hotels and Resorts, says that today, typically the industry payroll costs range anywhere between 20% and 30% of a company’s average revenue, up from 15-17 % three years ago. Companies blame this on high attrition rates across the industry, over-hiring and growing sizes of food and beverage outlets. Perhaps the biggest reason for the manpower crisis in hotel industry is that a majority of fresh hotel management graduates prefer to join allied industries.

Read the full report here, Times of India


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