Update
Saturday 12/20/2008 3:00pm
As as have said, I am moving this entry up on top of the warning chorva. Many, many thanks to the comments below. I hope I get more feedbacks. I finished the 1st Income Statement Draft. I’m just waiting for the comments back from my boss.
Business School
When I did my MBA, we were required to write Business Plans and present it in class. There were three (3) business plans of which I was involved. One was for a telecommunications company which I collaborated with my Italian classmate who is now a Country Manager based in Shanghai, China. The other one was for a Health & Fitness Club in Southern Jersey which I collaborated with my MBA group. A member of my group who was planning to implement the plan called it off and instead went on a tourist cruise business in St. John’s Island. The last one, I went to the extent of actually implementing it in Manila. That business was in operation when I presented it in class. It’s gone now but I had a kick when I was presenting it.
(Pinoy Parol at a house in Jersey where I got invited to a party 12/18/08)
Feasibility Study
In the Philippines, business plans – for some reasons which I get confused – are most of the times referred to as – feasibility studies. I often hear this from my friend who works at a bank. Don’t ask me. I found out that they’re the same. So, they’re all the same enchilada.
The Project
Two weeks ago, I was involved by a group for assistance on a project. I was tasked to help them create a business plan but there’s a twist. The business plan that I am putting together is that of a 5-star or 4-star hotel with a Philippine scenario. Meaning, all Porter’s 5 analyses, SWOT analysis including the numbers will all have to be Pinoy, not American.
No touch no feel
Given that I have lived in the United States for a very long time, I have no more clue nor touch and feel about the hotel industry in Manila, other than my favorite place to stay in the last five years was Discovery Suites in Ortigas. Bummer! I never got the darn chance to apply my social climbing skills with whomever up there because I was busy with a lot of my nocturnal activities!
Can you help?
I decided to blog this because I am having a lot of difficulty making some estimates and I was hoping that there are readers here who can help me. Besides, I am just having a hard time contacting old friends who knew people. Here’s what I need:
- How much do you think are the average salaries of the people working in the hotel industry for either a 4-star or 5-star rated hotel? (General Manager, Dep’t Manager, Concierge, Front Desk, Bartenders, Busboys, Cleaners, Reservations, etc. Please name the position when responding.)
- How much do you think would be their utility expenses (Meralco, Water, Telephone & Cable, etc. Please separate each when responding.)
- How much are the average room rates nang 4-star or 5-star hotels both de luxe and standard rooms?
- What are the typical employee hotel benefits? I know Medicare – but that’s about it.
- How do you compute the employer’s share on SSS and other taxes, pati na real estate tax?
- Where could I get information about hotels in the Philippines, especially in Metropolitan Manila?
Serious responses please and I’d appreciate hearing from anyone of you.
Maligayang pasko senyo!
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{ 12 comments… read them below or add one }
Here goes nothing : =)
1) Many hotel employees, especially at the lower rank are contractuals or agency-hirees, or “not regular” employees. This is usually done in order to avoid paying employee benefits. A typical fresh grad in the Philippines would get a monthly BASIC pay ranging from P12K to P15k per month (in any industry, including probably the HOTEL industry).
However, in the hotel industry you must take note that aside from the monthly basic pay, employees get a monthly SERVICE CHARGE ranging from 30% to 60% of their basic pay (at least, this is what I remember my mba friend telling me before [unfortunately, she already migrated to Canada, and I can't contact her anymore]).
If you are willing to spend, there are ACTUALLY compensation survey books that are updated every year for EVERY industry (including hotels) that can be bought in the Philippines. ECOP (or Employer’s Confedaration of the Philippines), Watson Wyatt, Mercer are just some of the consulting companies that sell these books.
3) De Luxe : P11,000 +++ per night inclusive of breakfast buffet.
Standard : P 6,000 +++
4) Typical Employee Benefits in the HOTEL industry
Company loans
1) I don’t know if SERVICE Charge pay is a benefit or part of CASH compensation. But this has got to be the “most unique” benefit or pay component in the hotel industry.
2) I know that hotel employees have free meals. This may not be much at the on set but if a “typical yuppie” on a “typical day” spends P500 per day on morning merienda, lunch, afternoon merienda, then that is easily P15K per month value. Not to mention, they are eating HOTEL FOOD. =)
3) For lower ranks, like room service, bell boys, etc…tips coming from guest, I think, would be a big factor.
4) Free uniform. And hotel laundry and pressing to boot.
5) The standard Life and Accident Insurance
6) Medical benefits USUALLY via HMO. This is usually a 50-50 sharing in terms of premium per month depending on the coverage.
7) Leaves. Usually, 10 to 15 days VL and 10 – 15 days SL.
9) Most hotel companies DON’T have Retirement Programs. Why? I don’t know. Lol.
10) of course, all the government-required benefits or what we call statutory benefits like SSS, Pagibig, MEdicare.
5) SSS EMPLOYER’s share is I think P100 per employee per month.
I am not from the hotel industry, so you may want to further validate. Hope this would help.
[Reply]
reynz Reply:
December 20th, 2008 at 12:15 am
This was one very good information CW, many many thanks. This service charge is new to me, this was the only time I heard about this.
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
my experienced with the Hotel Industry was 25 years ago waaaah, yes meron kaming 15% Service Charge added to our paycheck kaya madalas kami sa Shakey’s. I’m pretty sure that if the owners investors are from the land of tikoy, malamang lamang, panay hanggang 6 months lang ang mga trabajador para iwas benepisyo. the owners of the hotel I worked with is an Australian with a Filipina wife, they have hotels in Puerto Galera, Cebu and Subic, I’m pretty sure they were following all the business rules during that time as I’ve worked there for more than a year and so most of the housekeeping staff. what I remembered most working in the Executive office was when we were visited by murdered victim Maureen Hultman.
[Reply]
lcm Reply:
December 19th, 2008 at 11:31 pm
ooops correction: we were visited by Mr Hultman, father of Maureen
[Reply]
i know some of this stuff! =)
The basic pay that I know is that it starts around 10k to 11k and up… But for experienced employees the pay is much better… Kitchen Work for a Commis I or apprentice, depends with the company or recruiter…
What I do know about the health insurance, it depends per company If they use intellicare with dental benefits or without. Some companies even have hazard pay.. Service charge included as well. Tax, Social, PagIbig are deducted from the salary as well.. If they work during the night shift, they would be able to receive a night differential to be added to the salary
Free meals from the Staff Kitchen who are in-charge for the food staff.
Uniform is provided by the hotel itself.
I have no clue bout the expenses for electricity, water, and other miscellaneous but for sure it would be around 100k or so.
For Edsa Shangrila I can’t remember if it was around 8k for the standard room. Yes breakfast is included…
I’ll try to see if can ask more information from a friend so so so so..
=)
Reezen TOT´s last blog post..US EMT & HOSPITAL VS Philippine EMT & HOSPITAL
[Reply]
reynz Reply:
December 20th, 2008 at 1:41 pm
thank you for the infor Reezen, eto iniisa isa ko mga hotels to check their prices hehehe
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
sigh, hanggang lobby lang ako ng 5star hotel at kape lang kaya kong orderin at pag bongga feeling ko cocktail na rin pang happy hour nga lang.
lee´s last blog post..MARRIAGE..Marriage..marriage…
[Reply]
reynz Reply:
December 21st, 2008 at 5:08 pm
ako hanggang basement hehehe puro services kasi ginagawa ko hehehe leche hahaha
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
I have a cousin who works at a hotel. I’ll call him up and ask about specifics kasi I really have no idea
)
[Reply]
reynz Reply:
December 20th, 2008 at 1:40 pm
rocky! that would be a big help! thank you!
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
in my short stint in holiday inn clark, here’s what i learned about service charge
whatever was collected from the guests (part ng bill nila yung service charge), is divided among the total number of employees (probi and regular) of the hotel. sabi nila equally daw, regardless of position. (which i doubt).
hindi ako nakapag-avail ng SC na yan kasi under agency ako. I applied directly to the hotel, pero new employees are being handled daw by the agency. since di kami considered as direct to company, we were not entitled to the SC share.
here’s the scoop. i don’t know about other hotels, pero kapag tinatanong ko yung ibang empleyado dun, umabot na sila ng 3 years (plus) na under sa agency. so imagine the savings to the company, at yung mga nasayang na benefits ng employee for all those years.
regarding SSS computation naman, may mga salary brackets yan. you can ask for the table from SSS, nakalagay na dun kung magkano ang employee’s share at employer’s share for a certain salary bracket.
Roy´s last blog post..The Struggling Blogger.com is mine!
[Reply]
reynz Reply:
December 20th, 2008 at 12:24 pm
bro, question: anong year tong 15% service charge na to?
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
Roy Reply:
December 20th, 2008 at 1:28 pm
di yata sa akin galing yung 15% SC, hehe… hindi ako sure sa rate
pero palagay ko, approx ganun nga.
this year lang ako nag-work sa holiday inn
August to October 2008
Roy´s last blog post..The Struggling Blogger.com is mine!
[Reply]
reynz Reply:
December 20th, 2008 at 1:39 pm
Great! I think I am clear now. Yung una kasing computations that I made eh mukhang mali. Now, I remember as in, when I stayed at one hotel in Makati there was indeed a Service Charge na binayaran ko. Which means,
dapat ang calculation na ginawa ko is based on Revenue.
Curious lang kasi sabi ni CW sa taas is about 30 to 60% which is a little bit high. Yong nakita kong SC charged saken was only 11%.
Which means, kelangan pa mag-shell out nang employer
nang additional numbers to the employee? Kasi magiging
part na sya nang salary.
I do know na part nang hotel strategy to minimize hotel operational costs is to outsource or ipakontrata like commissaries.
Do you know where I could get numbers like how much ba ang mga contracts na to normally?
reynz´s last blog post..I need help on a hotel business plan project
reynz Reply:
December 20th, 2008 at 2:14 pm
ow, sorry about the 15%! panglito naman kasi yong isang message eh! sinabi nang serious replies lang hahaha!
reynz´s last blog post..I need help on a hotel business plan project
lcm Reply:
December 21st, 2008 at 4:27 pm
serious po ako its either 10 or 15% yong additional sa paycheck ko 25 years ago, na service charge, kaya this Lola is a certified Lakwatsera. i was just reading an article at PDI: Carlson Hotels bullish on RP, Asia, i’m glad you were able to get very reliable information, para you’ll have enough time to enjoy Christmas Day
renz- serious response ha! Sige bukas. reply ako seriously. Tulog muna ako. Nasa office mga data .
Fatherlyours´s last blog post..Parents Give Their Son a Shocking Name
[Reply]
reynz Reply:
December 21st, 2008 at 3:38 pm
great! i’ll wait for it father! thank you !!!
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
Hi RE. Mukhang high-side nga ang nasabi kong 30%-60%. =) Pero kasi, if the “service charge” is a FIXED amount EQUALLY distributed among staff (as written by one of the commenters), a P10,000 fixed amount service charge in a given month would represent 100% service charge for SOMEONE who is earning P!0,000 monthly basic pay. And only 10% for someone earning P100,000 per month. So I guess, it is relative kung % ang basihan.
Baka nga a more realistic AVERAGE percent amount would be 15% – 20% per month. (You’ll have to ascertain though, if this is taxable). FYI.
[Reply]
reynz Reply:
December 20th, 2008 at 8:40 pm
Hi CW,
It was (Mukhang high-side nga ang nasabi kong 30%-60%.), kasi the base will be affected, so bumaba masyado ang base salary given the Service Charge. Base pala to sa Rev Calculation and I still don’t know as to whether or not this is taxable dahil ang initial understanding parang lumalabas na tip. I still have to research some more, but given na pure estimate ang ginagawa ko, the information you guys had given was very valuable. Maraming salamat talaga.
reynz´s last blog post..I need help on a hotel business plan project
[Reply]
The Ca t Reply:
December 21st, 2008 at 2:05 pm
tips dito sa states ay taxable, i do not know in the philippines.
sa hotel na pinagtatrabuhan ko sa SF, separated ang tips or service charges
na ipinamimigay sa mga staff sa kanilang paychecks.
The Ca t´s last blog post..Therapy for Bored Life
[Reply]
reynz Reply:
December 21st, 2008 at 3:41 pm
yong Service Charges sa Pinas – akala ko dun lang sa Pinas yon, they’re everywhere pala, salamat dun sa email na pinadala saken
nung isang reader.
I think ang kaibahan is that yong Tips are reported kaso
backed out in full – yong service charges daw accounted
for separately and then passed on 100% sa employees
kaya pala it’s not treated as revenues.
i hope me makabasang tiga-hotels nito and correct me if
i’m wrong – kasi un ang pag-kakaintindi ko
reynz´s last blog post..I need help on a hotel business plan project
From Tony via email:
Nakaoka paid a 20 percent service charge of $3,566.38 on the food and beverage. Nakaoka said he was not told that the entire amount did not go to the employees who provided the services.
The lawsuit is seeking to obtain damages for all customers who have paid the service charge to the hotel in connection with buying food or beverages. Attorney Brandee Faria told PBN that under the statute, customers from as far back as at least four years ago can be included in the class action.
Link: http://www.bizjournals.com/pacific/stories/2008/12/01/daily76.html
reynz´s last blog post..I need help on a hotel business plan project
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makikisabat din ako.
yung total na service charge ng buong buwan ang pinaghahatian talaga. katulad nung asa isang casino hotel ako nag ta trabaho, yung service charge namin umaabot minsan from 8-15 thou per month. sarap ano?
kengkay´s last blog post..sinoli ang regalo
[Reply]
reynz Reply:
December 21st, 2008 at 11:25 pm
yeap, kala ko nga built-in sa sweldo, indi pala. it’s a passed-on, parang tips. so, lahat nang service charges earned nang hotel is passed on sa hotel employees (although me requirements kung sino lang ang maghahati). like that news posted or sent to me by a reader na napasubo yong hotel in Hawaii.
reynz´s last blog post..I need help on a hotel business plan project
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Hey, my bro and his boss is going to put up and school for hotel/casino business management in Macao next year dapat this month na but dahil sa mga red tape eh mejo naantala for january hopefully.
Maybe you want to keep in-touch with them?
BTW thanks for passing by my blog Merry Christmas!
earthlingorgeous´s last blog post..Umbilical Cord Blood Banking
[Reply]
reynz Reply:
January 23rd, 2009 at 3:39 pm
hey! gorgeous!
now ko lang nakita to! many thanks! hope to hear from your bro and boss about this!
reynz´s last blog post..My Obama. Your Obama. Our Obama.
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Hi!
I came across your blog as I am starting my own plan for the same industry – a 1st-2nd class hotel. I wish to convert our 3-storey building to said business after experiencing the hassle of building maintenance with increasing costs and handling tenants’ complaints with very minimal return on our investment.
I wish to solicit your kind assistance on how, and where to start with said plan. Though, my first job was with a 3-star hotel in Ermita years ago, I have zero knowledge of the business. However, being an accountant, my husband entrusted me with the responsibility of preparing a business plan.
Looking for your reply. Thank you.
Lilian
[Reply]
reynz Reply:
January 23rd, 2009 at 3:46 pm
Lilian,
There are a lot of materials on the internet on how to start crafting a business plan. However, start with the basics. Look for “Porter’s Five Analysis”, that should be a good starting place.
Next, read a lot about the hotel industry in the Philippines. It’s a must. You must know and understand the industry that you are going into. Who are the main players, who will you be competing against, what are they offering vis-a-vis what you will be offering. Understand why tourists or clients would prefer your hotel. What’s in your hotel that will be a come-on to them.
Know your pricing. You can get the pricing from competing hotels so you would know where to place yours in a way that would be good for your business.
Where are you going to get your revenues. How are you going to divide your rooms. De luxe, regular, etc. How many people do you need to man your hotel. How much will you be giving them as salaries, service charges.
Understand the cost of renovations, maintenance and all that. As always you start with research, research, research.
I would assume you are in the Philippines. Don’t forget to visit your local DTI and ask for assistance.
I’ve thrown you a lot of q’s. But that’s where you start. Don’t do your income statement as of yet. Get all those info and start from there.
reynz´s last blog post..My Obama. Your Obama. Our Obama.
[Reply]
Lilian D. Checa Reply:
February 4th, 2009 at 5:00 am
Hi Reynz,
Appreciate so much for the guide and info on how i will start with our own plan. Yes, I am working on it in Philippine setting. However, I have no other choice of business location; but to stick to where our building was erected. I must say that the location is a part of a residential subdivision but along a national road of 3rd class city in Metro Manila. As to foot traffic, the volume is still below the standard. There are neither tourist attractions in our area. Only one thing that encourages us to pursue the business is a lone hotel 3 kms away from us which was existing for more than 5 years now. These are the realitiies which I have yet to see if the project is feasible depending on my research result and a business plan (accompanied with a forecasted financial statement for 5 years).
I will appreciate receiving further advices, suggestions, etc from your end.
Thank you so much.
A friend “..from a distance…”
Lilian
[Reply]
jennifer m. libiran Reply:
June 15th, 2009 at 7:53 am
i am of the same shoes with lilian. can you please advice me where i can get in touch with lilia d. checa. i want to exchange communications with her. thank you so much!
[Reply]
Lilian Checa Reply:
March 22nd, 2010 at 4:27 pm
Sorry for the late reply.
[Reply]