Wage Differentials in the Lodging Industry

Abstract

Salary compensation programs are widely used as a tool to attract, retain, and motivate employees in the hotel industry. The development of a sound compensation plan is a critical component of any successful business. This study investigated the pay differential from different perspectives by using the data collected by the California Hotel and Lodging Association (CHLA), the largest state level hotel association in the United States. The results indicated that full service hotels offer higher base pay in positions such as General Manager, Resident Manager, and Executive Housekeeper as compared with limited service hotels. When accounting for hotel size only, hotels with more than 300 rooms offered higher base pay than their counterparts in several but not all managerial positions. The findings serve as a reference for human resources administrators in the state of California to develop their pay system. Pay differential rates were calculated to see the wage gap between different managerial positions. The results also provide a base salary reference to those looking for a job in the lodging industry.

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