AETHOS Consulting Group–a hospitality advisory firm that works with hotels, restaurants, casinos, cruise lines, and clubs–has released results of a new survey revealing hotel asset management compensation trends. The Hotel Asset Management Compensation Report is based on the responses of more than 200 asset management executives, owners, asset management advisory firms, and hotel management companies.
Dave Mansbach, managing director for AETHOS and author of the study, explains that the current supply of good asset management executives is low at a time in the industry where high-quality asset preservation initiatives are needed. “The biggest issue when it comes to the world of traditional asset management in the hotel space is that the level of talent that’s needed is at an all time low,” Mansbach says. “The industry has failed in creating succession plans and leadership development initiatives to produce this new generation of asset managers.”
Mansbach told LODGING that the survey results reveal that many hospitality companies are failing to create succession plans and leadership development initiatives to foster the next generation of high-performing asset managers as well as failing to compensate based on high performance. “Too many organizations are concerned with and focused on what their competitors are paying. Rather than designing true pay-for-performance programs, what I’m seeing is consistency throughout each organization. That’s frustrating to the extraordinary executive in a high performing company.”
The survey results show that the average base salary for a director asset manager is $156,000, and the cash bonus for a vice president of asset management is $72,500. In total, combining base salary and annual bonuses, a senior vice president of asset management makes $587,500. And, over 75 percent of those surveyed receive long-term incentives.
According to Mansbach, many hotel management companies in particular are falling short when it comes to compensating asset managers, a problem he attributes to the nature of working on behalf of owners and focusing more on the bottom line. Oppositely, public REITs, developers, and owners are more focused on equity-based programs, which Mansbach says is a good thing for asset managers and the industry. He adds, “There’s too much consistency on what people make from organization to organization. When you’re dealing with a low supply of talent, the best practicing organizations are retaining and attracting great talent.”