By Chris Jackson
The first Hotelier Middle East GM Survey revealed some interesting insights.
The first Hotelier Middle East GM Survey revealed some interesting insights from the top minds in the business, as Chris Jackson reports.
When Hotelier Middle East rolled out its first GM survey earlier this year, it was not sure what to expect. Would general managers take time out of their busy days to answer the questions and, perhaps more importantly, would they be candid and honest in their responses?
With the survey initially going out to a pool of 396 GMs via email - in the most case sourced from operating companies' head office or through personal contact with the Hotelier Middle East team - 125 responded, a rate of 32%.
GMs were asked a range of questions, from their hotel's performance in 2007 to their individual career path to becoming a GM. And while many were reluctant - or restricted by individual company policies - to discuss financial figures, they were far more forthcoming in other areas of the survey.
What do you think: are staff paid too little, is guest satisfaction more important than owner satisfaction? And which company would you never want to work for again? Who took part
Although the majority of hoteliers taking part were from brand-name properties, it was pleasing to see 13% of responses coming from GMs at independent hotels. Of the others that took part, the GMs from IHG, Starwood, Hilton, Rezidor and Accor dominated the responses.
The majority of responses were from GMs at five-star city hotels, with most looking after properties with 100-200 rooms and 100-200 staff.
More than 40% of the responses were from GMs based at properties in the UAE, with more than a third of total responses coming from Dubai-based general managers.
No responses were received from properties in Iraq, Iran and Yemen, and despite the large number of properties in Saudi Arabia and Egypt these were not adequately represented in the sample.
Rooms continue to be the prime driver of gross operating profit in the region's hotels, despite the large reliance on F&B to provide additional revenue streams to properties, particularly in those countries where licenses to serve alcohol are largely restricted to outlets associated with hotels.
Overall, on average the rooms department contributed 61.4% to the property's gross operating profit, with a further 19.9% contributed by the F&B outlets and 11.6% from banqueting.
Despite the burgeoning appeal of the spa and leisure industry, on average it contributed just 5.2% to the hotel's gross operating profit.
There were some notable exceptions. Two GMs overseeing five-star resort properties in Dubai said their room departments contributed just 40% of the gross operating profit.
One of the properties had half its gross operating profit come from the F&B outlets at the property, while the other's gross operating profit was split 40% rooms, 30% F&B, and 30% from spa and recreation.
Given the push for general managers to maximise returns for owners, it was therefore not surprising to see that many did not rate their property's spa facilities as important to the overall success of the hotel.Just 8% selected ‘spa facilities' as one of the three factors most important to the success of their hotel, well behind other elements such as meeting facilities and F&B.
With more than half of the respondents looking after city hotel properties, it was no surprise that the largest amount of business came from individual business travellers.
On average, the business mix was 42.3% individual business travellers, 27.5% individual leisure travellers, 17.1% business traveller groups, 11% leisure traveller groups and 8% MICE bookings.
While most countries in the Middle East reported more than half their bookings originated from business and corporate travellers, there were two notable exceptions.
Egypt GMs reported their properties had on average 25% business bookings, with 68% coming from leisure guests and 7% from MICE bookings. Jordan-based hoteliers reported the largest percentage of MICE bookings from the survey, at 30%.
The remaining bookings were dominated by leisure travellers, who contributed 60% on average.
Despite the rise of internet booking as a tool in the United States, Western Europe and Australasia, many Middle East based hotels are reporting low numbers coming into their properties through various e-distribution channels.
For 45.6% of general managers surveyed, the property's website contributed between 0 and 10% of the hotel's total bookings - another 25.3% of properties stated that their websites contributed between 10% and 20% of the total bookings.
Those properties utilising global distribution systems (GDS) fared little better, with 41.8% of respondents stating the system contributed less than 10% of total bookings, and a further 32.9% stating they received less than 20% of total bookings from the GDS.
An even greater proportion of GMs found third-party websites less than useful as well, with more than 61% stating they received less than 10% of total bookings from the sites.
There were some notable exceptions amongst the results though, such as the independent five-star UAE-based resort that generated between 60% and 65% of bookings from its own website, and the Kuwait-based five-star city hotel that generated more than 70% of bookings from its own website.
Another UAE-based four-star city hotel property received more than 70% of its bookings from third party websites, according to the GM.
GMs were also asked to select three factors that they thought contributed to their property's success, with more than half selecting personalised service, location and management brand name as the top three reasons.
Given the large number of bookings originating from the corporate sector it was not surprising to see that meeting and business facilities were favoured above leisure and spa facilities, although it was surprising to see that meeting facilities were valued higher than F&B outlets by many of the region's general managers, particularly given that department's high contribution to operating profit.
Despite most industry reports and benchmarking studies reporting in terms of RevPAR, more than a third of GMs surveyed said that GOPPAR was the ‘best' indicator of hotel performance.With RevPAR and GOPPAR combined taking out a total of 66.7% of the vote, many of the other benchmarking measures did not receive widespread support among GMs.
Indices such as market penetration index (MPI), average room rate (ARR) and occupancy did not earn support from more than 10% of respondents each.
The state of the industry
While the success of a hotel is often said to be summarised by ‘location, location, location', the issues at the top of GMs' minds across the region is ‘people, people, people'.
More than half of the GMs surveyed said that labour shortages was one of the top three issues affecting their hotel, with more than 40% pointing to rising inflation rates and the rising cost of living - and the associated costs of attracting and retaining key staff talent - as critical issues.
Perhaps not surprisingly, all seven general managers looking after properties based in Lebanon and Syria said political instability was a key issue affecting their property, while more than 50% of GMs in charge of Dubai-based properties said increased competition was a key issue for them.
Nearly a third of GMs responding said that staffing and related HR issues would be the biggest challenge to their property in the next 12 months, with 28% suggesting that increased competition - and the associated issues of maintaining current performance levels - would be the biggest issue.
Around 16% of general managers said that issues caused by construction (whether caused by hotel renovations or construction still needing completion, or by construction of surrounding infrastructure) would be their biggest challenge this year.
For some, the issues are not so much about concrete infrastructure, but rather the development of adequate support infrastructure for the tourism industry.
A GM of a five-star property in Dubai noted "a small point, but [an] important one is the taxi situation, which is appalling and damages the reputation of Dubai".
The GM of a four-star property in Lebanon was even more succinct about the challenges facing his property: "survival". Looking at the wider hospitality market in their respective countries, most general managers across the region agreed with the statement "the hospitality industry in this country is in good shape".
Indeed, hoteliers were quite optimistic about the wider hotel industry, with 69% agreeing that hotels were improving their service, 57% confirming that the government provided enough support for hotels, and 63% agreeing with the statement "it is easy to operate a hotel in this country".
However, hoteliers were split on the issue of nationalisation affecting the hotel industry along geographic boundaries.
Overall, 67% admitted they did not have as many national- born staff working at their hotel as they would have liked, and more than 80% disagreed with the statement "it is easy to hire national-born staff to work in our hotel".
Looking at the data more closely however revealed that hoteliers in some countries seemed to have more trouble than others, with those based in Egypt, Lebanon, Morocco, Sudan and Djibouti generally agreeing that it was easy to find national-born staff for their property.The majority of hoteliers in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, Syria and the UAE stated that it was not easy to find national-born staff.
Looking forwards, there were two clear leaders tipped as the ‘hot' markets of the future: Abu Dhabi and Qatar, which snared 25% and 23% of the votes respectively.
Combined into macro markets, the large number of votes for these destinations pushed the UAE and Qatar into the top two positions of hot upcoming locations for hotel developments.
Oman, Jordan and Saudi Arabia completed the top five in this ranking by general managers, with Bahrain and Lebanon also receiving a nod.
As to whether or not Dubai has reached - or is about to reach - saturation point, 62.5% of general managers across the region said yes. Interestingly, general managers in based in Dubai were more evenly divided on the issue - but 56% said the city had not yet reached saturation point.
Other than the need to manage the future direction of the property, GMs were unable to reach consensus on the most important role in their position - however this could be because of the breadth and scope of responsibility the job entails.
For the general manager of a four-star property in Saudi Arabia, the "most important role for a GM is first to maintain a high standard of service for the image of the property, then to increase the RevPAR of the property, increase market penetration, [offer] value for the price paid and [deliver] high satisfaction to guests, staff, and the owner".
For another Saudi Arabia-based general manager looking after a five-star property, the most important role of a GM is "to provide the leadership expertise to run a smooth operation; [to offer] quality and legal defensibility of service provided; [to achieve] stated operational goals and profitability objectives; and to ensure superior guest service and product quality".
Most general managers were clear about the most enjoyable aspect of their work: people.
"It's all about people," said the GM of a five-star hotel in Qatar. "[It's about] welcoming and entertaining guests, and coaching and leading my department heads."
For the general manager of a five-star hotel in the UAE, the best thing about being a GM is "interaction with people, the complexity [of the role], promoting, rewarding, innovation and creative possibilities".
GMs across the region also reached consensus on the worst thing about their jobs: the long hours and the corresponding time away from families.
For some it is a matter of too much paperwork, for others it is long hours spent at the property. As the GM of a three-star city hotel in Dubai put it: "There is too much work, and too little time".
So what eats up a general manager's time? Administration is the number one task for the day, with most GMs estimating that more than a third of their day was taken up by paperwork. In fact, one GM at a five-star resort in Sharjah estimated that up to 90% of his day was taken up by administration!
Meeing guests was the second highest task for each GM, followed closely by conducting internal meetings with colleagues. On average, GMs spent 13% of their working day dealing with owner relations, and less than 10% dealing with suppliers.
And the point of doing all that work is ultimately guest satisfaction, according to general managers across the region, with 68% selecting it as the most important from a list that included staff satisfaction, owner satisfaction and supplier satisfaction.More than a quarter of GMs surveyed said staff satisfaction was the most important, while just 6% said the satisfaction of the owner was the most important aspect of their role.
These general managers would obviously be in better books with their owners than the 5% of respondents who said that owner satisfaction was the least important to them on the same ranking scale.
Long road to the top
According to the results of the Hotelier Middle East GM Survey, there is a clear path for those working in the industry who want to become a general manager.
Of our sample, most GMs worked in the F&B department at some point in their career before taking on the top job, and are able to speak English and one of Arabic, French or German.
In terms of education, more than half the GMs surveyed had achieved a diploma, while 48.6% had completed a high-school degree. Just over 40% had completed an undergraduate or bachelor degree, and 45.8% had done some form of management training.
Around 16% of GMs said they had completed their masters, and 13.1% said they had a post-graduate degree. On average, GMs worked in the industry for 15.2 years before reaching the top job in the hotel, with the average age being just under 37 when they received their promotion.
The average age for GMs across the region is 44 years and 11 months, and most have been with their current operating company for 12.4 years.
The average length of time a GM across the region has been at their current property is three years, although there were some commendable examples of longevity, including one GM who had been at the helm of his property for 24 years.
Proving that Dubai is seen by many in the industry as a city of opportunity, GMs based in the emirate had become GMs eight months earlier than those based in other locations, on average. Dubai-based GMs are also, on average, more than 2.5 years younger than GMs at other locations.
Almost 40% of GMs said they had worked for the InterContinental Hotels Group before, with the next most popular chains in order being Starwood, Hilton, Accor and Hyatt.
And while only 38% of GMs taking the survey were prepared to answer the question, the results were tied for the company that GMs would not want to work for (either because they had worked there before and didn't like it, or because of its reputation): Accor and Bavaria Hotels.
Other hotel companies with negative reputations in the eyes of regional GMs include Rotana, Golden Tulip, Swiss-Belhotel International and Coral International.
However, adding to the large number of GMs who did not answer the question, there were a vocal minority who stuck up for the hotel management companies.
"Any of them are fine with me," said the GM of a five-star property in Kuwait. "I could work for anyone," agreed the GM of a five-star property in the UAE. Going forward
With the impressive response to this year's survey, the Hotelier Middle East GM Survey will be running again next year. Thanks to all the GMs who took time out of their busy days to take part in the survey.