Hospitality pay tracks inflation

Pay in the hospitality industry is just about keeping pace with inflation, according to a survey by independent consultants Industrial Relations Services.

The study shows pay awards from catering and hotel employers are currently worth about 2.9%.

This means that most hospitality workers will have received no real increase in their wages.

The survey covered awards for a combined work-force of more than 110,000, including 10 of the 13 largest hotel chains in the UK. Awards made between 1 August 1994 and 1 February 1995 were examined.

While actual levels of pay have stood still in real terms, employers are increasingly linking awards to an assessment of performance.

The survey looked at four merit-based methods of paying staff at Novotel, Pizza Hut, Travellers Fare and Swallow Hotels.

Pizza Hut awards rises based on merit and other factorson an employee's service anniversary.

At Travellers Fare awards are range from 0% to 7.5% and are funded by an increase of 3% in the total pay bill.

Hotel managers undertake pay reviews at Novotel at present, but a centralised competence-based reward system is to be introduced this April.

The pay award at Vaux-owned Swallow Hotels involves an Inland Revenue-approved profit-related pay scheme in addition to a 3% rise.

Swallow calls the idea a "pay less tax" scheme. It involves a 20% salary sacrifice linked to a share of profits and is open to all employees contracted to work 25 hours or more.

But new measures being introduced by the Government mean that companies will be able to offer such schemes to part-time employees as well.

• The report on hospitality pay appears in issue 370 of the Pay and Benefits Bulletin, published fortnightly by Industrial Relations Services. A subscription costs £155 a year. Contact: 0171-354 5858.

occupancy at Scottish hotels showed a slight improvement in December 1994, with bedroom occupancy moving up two percentage points compared with the same month the previous year.

Although bed occupancy remained static, the Scottish Tourist Board believes the survey of 225 hotels gives some indication of a marginal but steady increase.

The hotels which performed best were those with more than 100 rooms, where bedroom occupancy reached 55% during December 1994.

The poorest performers were small hotels with between five and nine bedrooms. These had an occupancy of just 24% in the same period.

Two big companies whose share prices rose in the past week in an otherwise depressed stock market were Forte and Rank. Both were subject to a "buy" recommendation by leisure analysts at Kleinwort Benson.

The Kleinwort team made the recommendation in a report on the leisure sector. In it they said spending on hospitality was growing faster than consumer spending as a whole.

And they predicted that companies based in leisure and hotels would have good long-term growth prospects.

One reason for this is that the generation of baby-boomers, born in the 1950s, now have a higher level of discretionary spending.

Many of them have grown-up children, low mortgages and partners in work, giving them more cash to spend. In addition, they are choosing to spend their money on leisure outside the home.

It is no surprise, then, that Kleinwort concluded investors should be buying hospitality company shares.