From the Atlantic to the Pacific… the compensation war continues. Although compensation in the lodging industry varies considerably from one geographic region to another, it is interesting to note that the two northern cities, San Francisco and New York, have surprisingly different compensation medians. With the tremendous wealth and high cost of living concentrated in Silicon Valley and New York City, we might suspect that such expensive cities have similar pay structures, but we were proven wrong. A starter home in the Bay Area can now run as much as $1,000,000. Rent for a three-bedroom apartment in Manhattan can be as much as $10,000 to $12,000 a month plus utilities. We examined how hotel managers are paid in these two cities to discover who had the fatter paycheck. We compared three positions at the property level: controller; director/sales and marketing; and general manager. The data for our comparison is from the HCE Hospitality Compensation Exchange (survey conducted in November 2000). Seventy hotels were included in the comparisons, 35 from each city. Much like the battle for baseball’s World Series, New York was the clear victor in the quest for the biggest paycheck. The table below illustrates the differences in pay for the three positions. Median base salaries in New York were consistently 20% to 25% greater than those in San Francisco. For example, the median base salary was $143,225 for a GM in New York and $121,257 for one in San Francisco, a difference of almost 20%. Controllers and directors of sales and marketing experienced a difference in base salary of nearly 25% between the two cities. Bonus pay was also greater in New York, although bonuses as a percentage of base salary were almost identical. For example, the median bonus for a controller in New York was $6,542 as compared to $3,536 in San Francisco, but both represented approximately 7% of base salary. It appears that paycheck supremacy still belongs to New York, while many may suggest that San Francisco wins the “quality of life” contest. Either way, we look forward to the next friendly battle involving these two great cities.
