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That Cruising Feeling

The Indian Hospitality industry faces a major challenge as it attempts to battle the poaching problem, writes Bhisham Mansukhani.

India's hotel industry has stood out as one of the country's most reliable employment absorbers over the last two decades. Who would have then thought that this sector, while continuing to grow at a fair clip, is facing some of its most attritional years in terms of staff retention, and the perpetrators are an assortment of service industry competition like BPO, banks, public relation companies and most menacingly, cruiseliners.

Cruise liners have hit hotels where it hurts the most - on a playing field which is anything but even. While hotels have been maligned plenty for being poor pay masters, cruise liners have garnered a reputation of being exactly the opposite - wages typically ranging from US$ 1,500 to 4,000. Casino workers, bar tenders, waiters and housekeeping staff make much more through tips, while cruise directors can earn upto US$ 7,000. The American cruise liner industry, which is the world's largest, supported nearly 316,000 jobs and paid a total of more than US$12.4 billion in wages and salaries in 2004.

Worse for local hoteliers, India is billed by most cruise liners as having incredible potential for both - outbound and domestic cruises. Several of them already have their presence in India and Star Cruises is the first to start India's domestic luxury cruise with a dedicated vessel. The impact of cruise liners' interest in the Indian market is already being felt on the country's hotel industry. Over the last year alone, hotels have lost almost half their workforce to cruise liners.

Hotels aren't exactly alien to this turnover crisis. They confronted it in the last decade, but this time though, the losses are more telling and likely to be far reaching. Indians rank among the most high-spending outbounders who are developing a penchant for cruising. Citing this trend, all leading cruise liners are looking to Indianise their product in so much as setting up Indian restaurants on board and hiring more Indians to sustain them. Julian Groom, general manager, Le Meridien, Mumbai, comments, "It is certainly not a desirable position for any hotel to be in, but, most hotels have no choice but accept their plight as competing pay scales with cruise companies is definitely not a plausible option."

An HR manager from a leading international hotel reveals, "The disparity in wages is really quite staggering. Even if a steward in a five-star deluxe hotel receives a salary of over Rs 5,000 per month and makes an additional income of over Rs 10,000 per month through tips; how does one match it to over Rs 50,000 salary and Rs 50,000 that one could make in tips by working on a cruise liner."

Tejinder Narang, training manager, Kamats Hotels India, adds, "Most hotels are being affected mainly because it is the key operational staff such as chefs, stewards, housekeeping staff and bar tenders that are the prime targets which cripple the hotel operations."

The only way out, HR consultant Nitin Gupta points out, is for hotels to compete with cruise liners on parameters other than wages. "Forget about matching the cruise liners as pay masters because none of them are indigenous. They pay in dollars since that is most likely the currency they earn in, while in the case of hotels it is predominantly in rupees. The only way hotels can retain their staff is by offering them avenues of growth, which when squared off against cruise liners that pay well but do not do much for staff in terms of longevity of career and intellectual growth, can retain a lot of staff," says Gupta.

A classic example of this is the Taj chain which recently claimed an annual attrition rate of 9 per cent, which is relatively low by industry standards purely because the group had recently launched into a series of acquisitions, thereby giving managers more avenues for growth. Yet, the company lost two 28-year-old food and beverage managers and one front office manager to hotel chains in Australia - compelling it to hire mid- managers in numbers, which it had earlier preferred to hire only at entry level.

At the newly opened JW Marriott Hotel in Bangalore, general manager Hans-Georg Rohrbein, faced similar problems. Having recruited 600 people through a rigorous selection process earlier this year, he has already lost some of the best personnel. This include a pastry chef, hired on a monthly salary Rs 28,000 for the chain's

Goa property in 1999, who left for a monthly salary of Rs 1 lakh this year. "Salaries have shot up across the board," explains Rohrbein. "Indian hospitality managers have built a reputation and are being hired by international hotel chains and cruise liners in big numbers."

Vikrant Usgaonkar, director-human resources, Radisson White Sands Resort, Goa, adds, "In Goa, the attrition levels are very high especially because of the cruise liners. They prefer the local staff as they are well versed in English and even have a natural accent. While we can compete with other hotels trying to poach our staff, the cruise liners have a big advantage in terms of pay scales."

While wages is the one sweeping motivation for the mass exodus of Indian hospitality professionals, observers believe that they do need to think about working conditions on cruise liners as well. One international report on the working conditions for service staff reads

"Below decks on virtually all cruise ships, there is a hidden world of long hours, low pay, insecurity and exploitation. Those who work continuously below deck, like in the galleys [ships kitchens], rarely see the light of day, let alone the shimmering sea of the Caribbean." Other studies have revealed more such disturbing facts: Workers on cruise ships have contracts that run as long as 12 months. Most work for 10 months, followed by a two-month vacation. They then return for another 10 months. This means long separation from family and friends. An Indonesian waiter on Holland America Line's Statendam had not been home for the birth of any of his four children. Another worker said, The first month after returning home, I sleep. The next month, I live with the knowledge that I will shortly be back on the ship." Employees commonly work 10 to 13 hours a day, seven days a week. A shipboard waiter may work as many as 16 hours a day, and often get less than six hours of uninterrupted rest per night, well below international standards. It is common to find collective agreements on cruise ships that require all shipboard employees to work 80 hours per week. In a survey of shipboard employees conducted in 2001, 95 per cent reported working seven days a week.

Two British organisations recently released a report that paints a grim picture of working conditions on cruise ships, tarnishing the fun, romantic image that the cruise ship industry has cultivated.

"Cruise ship employees ... are often excited by the thought of working for such world-famous names as Disney or Carnival or Princess, in luxury conditions with the chance to see the world and earn money at the same time ... But what many … too often discover is, by contrast a nightmare."

The cruise ship industry's 150,000 employees are confined to cramped, confined spaces on 6 to 10 month non-stop contracts. Workers from poor countries of Latin America, Asia as well as Central and Eastern Europe are largely consigned menial work in ships restaurants, bars, cabins and loading bays. Women are concentrated in non-technical services such as hotel work and catering. These workers are segregated from everyone else and are not permitted to go on the upper decks where passengers reside, except for those who must work with passengers directly.

In contrast, managers, officers, technical staff, entertainers, medical staff and engineers come from industrialised countries such as the UK, US and Italy. They have more spacious living conditions, have their own private restaurants, and have access to upper decks and some facilities enjoyed by passengers. Noting that workers from poor nations serve passengers largely coming from the white population of the rich industrialised nations, one of the researchers writes that, "It is very reminiscent of colonial days. But perhaps more accurately it can be seen as a microcosm of today's global economy."

While working hours in the hotel industry, in many instances is no less, but quite literally having ones feet on the ground is an advantage. Gupta says, “Hotels need to project themselves as an intangible that wages cannot account enough for. The time for hoteliers to do that though is limited, while the task, imperative.” Consider this, 10.6 million passengers cruised (9 million North Americans) which represented a 11.4 per cent increase over 2003, thus achieving the highest occupancy level for the industry of 105 per cent, which is forecasted to stay the same in 2005. In 2004, consumer demand surged up to 11.4 per cent, while capacity increased by only 6.9 per cent, with twelve new ships making their debut in 2004. In 2005, the projections for industry growth is 11.1 million passengers - 9.4 million from North America and 1.7 million from other countries. In spite of all the documented ills that a cruise profession may entail, hotels have some rough sailing to do, and whether the hotel industry can sustain its manpower, remains to be seen.