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09/02/2021

Does Your Hospitality Brand Lack Female Leadership?

A recent report shows for every 17 male hotel CEOs, there is one female. This is a missed opportunity as company profits and share performance can be close to 50 percent higher when women are well represented at the top.
Michal Christine Escobar
Senior Editor (Hotels)
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While rhetoric around the lack of women and other minorities in leadership roles escalated in 2020, the hospitality industry is still struggling. A recent report shows hotel company leadership had only one female CEO for every 17 male CEOs in 2020. Unsurprisingly, “the pandemic was not a time when companies deliberately invested in leadership change,” said Catherine Morgen, Partner in Morris, Manning & Martin’s Hospitality Practice. Morgen, has two decades of experience working with major hotel brands and serves on the board of the Castell Project, an organization that promotes women’s leadership and ownership in hospitality. However, “the strains of the pandemic and other demographic drivers – such as retirement of the Boomer generation – could give the hospitality industry an opportunity to reimagine the makeup of hospitality leadership teams.”

To learn more about this need for female leadership, and how hotels can actively make progress in this area, Hospitality Technology spoke further with Morgen as well as Peggy Berg, Founder and President of the Castell Project. Berg recently launched Fortuna’s Table, an incubator for women directly aimed at providing guidance on obtaining investments and developing their own ventures.

What are some eye-opening statistics you can share about women in leadership and the hospitality industry?

MORGEN: As an attorney in the hospitality space for an AmLaw200 firm, I’ve been the only woman in the room many times. While there has been improvement, it’s been very slow. It is still rare to find senior level women in the key decision-making business roles in hospitality companies despite working with many of these companies for close to 20 years. As a result, I became involved with the Castell Project, an organization that has the sole mission of propelling women and increasing representation in leadership positions. A report Castell Project put together shows that technology/information is one of the lowest performing areas in the hospitality industry with regard to developing women to C-suite positions. There are 8.6 men for every one woman in those positions. Due to COVID, we’ve seen statistics around women dropping out of the workforce. In Jan. 2021 the National Women’s Law Center reported 275,000 women dropped out. So, this certainly does not help.

BERG: Other statistics show that white men have been the majority of people selected for public board positions every year, including years when women and Black people have made the greatest gains.

How do you respond to the argument: “We hire the best candidate, not just a candidate that fills a diversity quota"?

MORGEN: There are many qualified women for positions, but it may take active measures to find them, and that is an effort worth making. There have been numerous studies that reflect that organizations that are more diverse (including the hiring and advancement of women and people of color into senior management) will experience better financial results than those that are not successful in managing diversity.

BERG: If the criteria is technical skill, knowledge and productivity, there is a strong bench of qualified women out there. If the qualification required is being male, companies using that criteria are cutting their talent pool in half and are likely to lose in a competitive market over time.

Why should hospitality companies actively look to recruit women for C-level roles?

MORGEN: Research shows that company profits and share performance can be close to 50 percent higher when women are well represented at the top. Beyond that, senior-level women have a vast and meaningful impact on a company’s culture. They are more likely than senior-level men to embrace employee-friendly policies and programs, and to champion racial and gender diversity. Whether to help the bottom line, provide fair and equal opportunity, or maintain a balanced and effective strategy, companies will benefit from a diverse leadership team. Hospitality companies in particular must commit to developing a pipeline of women leaders.  

What (if any) progress have women made in attaining larger corporate/ownership roles in hospitality organizations? 

MORGEN: The pace of change at the top is very slow. These are often roles with lifetime tenure, particularly for entrepreneurial founder-led firms. However, several factors suggest that change is coming. Leading through the pandemic has been draining and as companies recover, some leaders will be ready to pursue other interests. In addition, Baby Boomers are of retirement age and are as large a part of hotel company leadership as they are for other professions. According to a recent report, women are nearly half of directors, one of every three vice presidents, and nearly a quarter of EVP/SVPs – so there is a strong bench of female talent to move the industry forward. With respect to these entrepreneurial founder-led firms, they are often run by men, but I’ve seen through the years these men want to develop a culture at their businesses where their daughters would see a future and are starting to see the necessity for women to be at the leadership table.

BERG: Change from year-end 2019 to year-end 2020 was marginal. The pandemic was not a time when companies deliberately invested in leadership change. Statistics show women losing ground at the president, partner/principal and managing director levels. However, there are so few women in leadership that the underlying numerical changes were small. Although the positive numerical changes were small, it is encouraging to see women making even marginal gains among CEOs and in the C-suite (chiefs).

How has the pandemic and “the great resignation” provided hospitality companies with an opportunity to reset the workforce and create a more diverse and inclusive staff ?

BERG: The Baby Boom resulted in a disproportionate bulge of men sitting in career capping positions for many years. COVID-19 is accelerating the shift to new generations. This means that the hospitality industry will undergo a massive reorganization over a short period of time. It’s an opportunity. Companies that reorganize successfully and take advantage of all their talent – including women and people of color – will lead the industry and those that don’t will be at risk. 

According to the Castell Project 2021 report, the odds of a woman reaching the executive leadership level (CEO, partner/principal, president, C-suite) were one woman to 5.9 men at the end of 2019. A year later, at the end of 2020, odds were 5.7 men per woman. Change at these levels is slow because they are usually career capping long-term positions. However, economic drivers including the strain of responding to COVID-19 and demographic drivers, such as a preponderance of Baby Boomer men in these roles, will result in significant turnover in the next few years. The challenge for the industry is to fully develop a diverse talent pool so that the best candidate for the company can emerge. The best candidate is sometimes, but not always, male.

 

 ABOUT THE AUTHORS

 

Catherine Morgen

Catherine Morgen is a Partner in Morris, Manning & Martin, LLP's Commercial Real Estate Development and Finance and Hospitality Practices. She concentrates her practice on the representation of real estate clients, with an emphasis on the hospitality industry. Catherine is a member of the board of directors of Castell Project, an organization with the goal to ensure that women move to 1-in-3 executive positions of power and influence in the hospitality industry. She can be reached at [email protected].

 

Peggy Berg

Peggy Berg chairs the Castell Project, a non-profit advancing women in leadership in the hospitality industry. Under her guidance, Castell delivers leadership development for women, benchmarks the status of women in the hospitality industry, encourages women in university hospitality programs, and promotes women on the podium. Fortuna’s Table, an initiative to advance women in hotel ownership, is under development. She can be reached at [email protected].