Women have long struggled to advance in hospitality leadership as fast as men. A recent study shows many women move up in rank during an economic downturn.
Career advancement is often about timing. For women in the U.S. hospitality industry who are primed and eager to move up the ladder in a business sector dominated by men, your time may be at hand.
While the global hotel industry continues to experience significant growth in business, many watchers see a slowdown ahead. If headwinds are strong enough, they may blow open the doors through which company boards force current CEOs and other top execs to exit. The shift would create vacancies that can be filled by women, says an expert.
History has shown that crisis creates opportunity.
“The days of the global financial crisis witnessed a surge in new CEO appointments as boards sought the requisite executive direction to steer them out of economic difficulties,” reads a February report by Aethos Consulting Group.
The advisory firm released its annual study on CEO turnover in the world’s top hotel management companies that shows not only a sad dearth of women in C-suites roles but also a shallow pipeline of female candidates for senior executive and board positions.
“Not a pretty picture”
While companies in some countries are making progress because of purposeful efforts to train and recruit more women to leadership roles, the U.S. lags far behind. “It’s not a pretty picture,” said Chris Mumford, managing director at Aethos Group’s UK office and co-author of the report.
Last year, Iberostar and Fattal appointed women as CEOs, bringing the portion of women CEOs to 16 percent. But it’s not good enough, the report said. “The pace of change, however, is glacial and, more disturbing, when we look at our Top 10 group, there is not one woman on the list. This issue seems especially pertinent in North America, where none of the largest hotel groups has a woman in the driver’s seat.”
Aethos Consulting Group has tracked hotel CEOs for the past 14 years, Mumford said. Its latest research shows of the top 50 hotel companies in the world, women comprise 16 percent of the CEOs. “When you narrow it down to the top 10, there is not a single woman.”
Researchers are seeing slight upward movement in women into top executive ranks, particularly in family-owned businesses where the lead women are family members. But when it comes to companies “looking outside of themselves for female leadership,” the results are dismal, Mumford said.
Further down the line, Aethos Consulting Group tracks “a pretty strong push to correct [the lack of women] at the operational level,” he said. “We see companies looking to build up talent pools of female general managers, to get to one of every two candidates are women.”
But the effort is not showing in board rooms, he said.
Two things might change that trend. First, Mumford said, “there’s been a lot of pressure in the UK and elsewhere to get to 30 percent of female board members and CEOs. The issue is getting more exposure and awareness.”
Second, if the hotel industry’s metrics begin to show instability, companies may seek new leadership. And with the pressure to consider more women, “boards may push for a slate of more diverse candidates,” Mumford said. But don’t hold your breath. “It’s not going to happen overnight.”
Castell Project Study
Giving women the skills and confidence to fight biases and clear hurdles to advancement is critical to filling the pool of ready-made executives.
One such effort is Castell Project in Atlanta, Georgia. The program was founded in 2017 by industry veteran Peggy Berg. It offers gender-specific training in five key areas: improving negotiation skills; building a strong resource network; crafting an executive presence; building a team of advocates; and planning a career path.
“Castell Project has a goal of seeing women in more than one out of every three leadership roles in every level,” said Berg.
To get a grip on the challenges women face in climbing the ranks in hospitality leadership, Castell Project teamed up with America Hotel & Lodging Association’s Women in Lodging committee to perform a benchmark study.
The 2017 report showed men were 10 times more likely to be promoted to a top role than women. And it revealed that women account for nearly 60 percent of hospitality sector employees, but they only comprise on 5 percent of industry CEOs.
The results were not much better in Castell Project’s 2019 Benchmark Report on Women in Hospitality Leadership. This report reveals women comprise 11 percent of hotel company leadership positions including managing director, president, partner, principal and CEO. Women in leadership are represented at a ratio of one woman to eight men.
It is a slight improvement over the previous year’s study, said Berg. “I think the industry is determined to do a better job, but the results are still just ramping up. We are feeling the energy and we are just beginning to see the change.”
Like Mumford, Berg sees more effort on training women for leadership roles at the operational levels. “The industry has done a good job of making opportunities available for women up through director level and on operational side up through select-service general management level,” Berg said. “But as you go up from there the industry is still growing into the opportunity.”
Berg said the very real hurdles to women’s advancement exist for two reasons – the company they work for and the women themselves.
“We all grow up with strong cultural conditioning, and we are operating in an environment that’s not designed to be diverse,” she said. Hence, the creation of Castell Project and its focus on the five strengths. “On the company side, there is an overarching cultural bias about women in business and in any form of leadership.”
Despite the cultural conditionings, hospitality companies do claim a large dose of goodwill toward women, Berg said. “They know when company leadership is more gender diverse the company is more profitable. So there is considerable effort being made to move the process along, to remove the bias. But it’s hard to do because it’s a longstanding habit to break for a lot of people and a lot of organizations.”
One organization that seems to be altering cultural norms is AAHOA. This year, for the first in its 30-year history, the hotel owners association will have its first woman chair. Jagruti Panwala campaigned and won election for AAHOA secretary in 2016, leading to her succession to chair in April.
WATCH: Jagruti Panwala, AAHOA chairwoman, talks about how she has changed as a leader.
AAHOA and its Women in Hospitality committee regularly bring women together for fellowship, business education and political advocacy training.
Panwala was one of the members instrumental in growing the committee by convincing more women of the need to get involved in the association and in their businesses.
Panwala owns and operates hotels with her family and she is founder and president of Wealth Protection Strategies, a financial services company in Pennsylvania.
When she joined AAHOA eight years, she immediately identified a problem – although women comprised 40 percent of the association’s membership only a slight percentage were actively involved. “When I went to meetings, I saw 95 percent men and few women. There were just two women on the board, and they were specially assigned seats.”
Her election win notwithstanding, Panwala said AAHOA has definitely progressed from an all-boys network to a diverse organization, with five women on the board and an active Women in Hospitality committee focused on training and development.
On being first woman chair, Panwala said she is proud of the accomplishment. “But it’s not about me; it’s about what the association has achieved together.”
Electing a woman to such powerful role is an evolutionary trend. AAHOA members who are hotel owners are usually part of a family business. In the Asian American hotelier community, it is often said that women are backbones of the family businesses. So seeing a woman in leadership is not so unusual.
Panwala said although more women are involved in AAHOA than ever before, it is still a challenge for them to break away from business and family to do other things.
“I think time commitment has been an issue for women in general. It’s not an easy task. Women have to come out and take some risks, and if they want it they should go for it. It’s an individual decision.”
When companies search for the best and brightest, many need look no further than within their own household.
Ninety percent of all businesses in America are family owned, reports the U.S. Census Bureau. They generate about 64 percent of our nation’s GNP, and employ more than half of the country’s workers.
Conway Center for Family Business in Ohio says women lead nearly a quarter of family businesses as CEO or president; and more than a third of family businesses say their next successor is a woman.
A report by Ernst & Young and Kennesaw State University in Georgia shows family enterprises are moving women up the ranks of leadership farther and faster than non-family businesses.
WATCH: Purvi Panwala’s mother taught her to be brave in business
In most cases, the women leading family businesses are related to the business founders. But the study, called “Women in leadership: The family business advantage,” demonstrates that family-run businesses not only trust the ability of their female relatives to lead the company they also have more faith in women leadership overall.
The companies in the study’s survey averaged 1.14 women family members in C-level positions; they also averaged 3.5 women in the C-suite who were not family members. In addition, they are grooming an average of four women for these top leadership positions: one family member and three non-family members.
WATCH: Lina Patel says Asian Indian women can change cultural norms in family and business
Hotel owners and operators who believed they could go it alone before the coronavirus pandemic devastated the hotel industry are having another think and turning to third-party managers to work their way back to profitability in the post-pandemic recovery. Another trend contributing to the growth in third-party managers’ business is more commercial real estate investors armed with cash entering the hotel sector and in need of an experienced operations team. Episode 321 of Lodging Leaders podcast explores the growth of third-party management companies over the past 12 months. This report is part of Lodging Leaders’ coverage of the coronavirus crisis and its impact on the hospitality industry.
The Ever Given container ship running aground on March 23 in the Suez Canal got worldwide attention, but it is just one of many reasons for the breaks in the global supply chain that are impacting the U.S. hotel industry’s post-pandemic revival plans. Shipping companies in Asia and Europe are contending with a boatload of challenges, including a lack of containers, traffic jams at West Coast ports and increased costs. Long Live Lodging explores what the problems mean to hotel owners and developers eager to refresh their properties and welcome guests back.