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About the San Francisco Hotel Industry

San Francisco’s hotel industry consists of about 200 hotels, including 37 upscale properties. In all, the city holds about 33,000 hotel rooms.

The majority of San Francisco’s hotel workers are employed by a handful of global hotel corporations, including: Hilton, Starwood, Hyatt, Marriott, and InterContinental.

During the past 18 months, business has dropped – resulting in reduced shifts for many hotel workers. Nonetheless, major hotels have continued generating substantial operating profits – in large part because of aggressive cost-cutting measures, including increased workloads.

Industry analysts believe that hotel revenues began increasing during the first quarter of 2010, and are expecting substantial increases in revenue during each of the coming years.

Note: 1999-2003 data is from Smith Travel/Torto Wheaton research). All other data is from PKF Hospitality Research.

Profits are going up from here

Hospitality industry experts (PKF Consulting) predict revenues will be up an average of 4% for the remainder of 2010. They predict revenues to go up 12% in 2011 and 14% in 2012.  PKF’s R. Mark Woodworth also states, “Going forward we will begin to see a more profitable formula for revenue growth as operators reclaim pricing leverage and room rates begin to rise.”

Managements’ bosses aren’t hurting

  • Starwood’s CEO got a 71% raise last year – so he got paid $8.2 million. On top of that, the company just gave him a 25% raise in his “base salary”.
  • The Hyatt chain is owned by one of the richest families in America – the Pritzkers have about $17 billion in wealth according to Forbes Magazine.
  • The Hilton chain is owned by the giant company Blackstone Group. Their CEO is one of the top-paid executives in America.

When business drops, workers take the hit

Workers are not paid a salary – they are paid by the hour. When there are fewer visitors, workers work less. As a result, there is a built in safety valve for this industry – business drops, and so do their costs. The hospitality industry has been cutting back on staff for decades. Workers have to do more and more. That’s why profits have been soaring for 20 years. In fact, there hasn’t been a single year since 1991 that the hotel industry as a whole lost money.

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