African American travel is a $63 billion industry.
That’s how much black leisure travelers generated for the U.S. travel and tourism economy in 2018, reports Mandala Research.
The December report is a follow-up to Mandala Research’s 2010 study on the same topic. The new information shows a $25 billion increase in travel spend by African Americans in the U.S. in less than a decade.
What hasn’t kept pace with the growing metric is the number of hotels owned by African Americans.
Andy Ingraham, founder and CEO of the National Association of Black Hotel Owners, Operators and Developers, said African American travelers prefer to do business with black-owned hotels, resorts and restaurants.
The majority of African American travelers do so for cultural enrichment, including heritage tours. They also frequently travel to attend family reunions in destination markets.
In an April 24 podcast with Lodging Leaders, Ingraham, said opportunities are vast. They include hotel ownership, development and management, franchising with major brands, financing hotel projects, investing in ancillary businesses such as restaurants, and becoming a preferred supplier.
Warren Thompson, president and CEO of Thompson Hospitality, a supply company, listens during a July 25 panel discussion about minority vendors at NABHOOD’s summit in Miami.
Historically, African Americans have long owned independent lodging accommodations in the U.S.
A guide called the Green Book, published from 1936 to 1966, listed black-owned motels, hotels, restaurants, retailers and gas stations. These places were safe havens for African American road trippers.
Eventually, most of the small businesses disappeared along with the Jim Crow laws and other obvious forms of discrimination against African American consumers and business owners.
In 2001, Mabra Holyfield owned the Best Western Benchmark Hotel in Memphis, Tennessee. At the time, it was the only African-American-owned branded hotel in the country. (The hotel closed in 2010 and is destined for demolition. In its place, Magna Hospitality Group of Warwick, Rhode Island, will build a $43 million Canopy by Hilton.)
Today, African Americans own nearly 1,000 hotels in the U.S., most of them branded assets. But that’s still less than 2 percent of the total number of hotels in America.
NABHOOD’s goal is to recruit more African Americans to invest in the U.S. hospitality industry, a $2.5 trillion sector, said Ingraham.
On July 24, NABHOOD held its 23rd annual International African American Hotel Ownership & Investment Summit & Trade Show at the Marriott Miami Biscayne Bay Hotel in Miami, Florida.
Attendance and enthusiasm was high.
However, two weeks before the summit, an NAACP report that examined diversity in four major hotel franchising companies tempered the positive outlook of Ingraham and other proponents of ethnic diversity in the hospitality industry.
From 2012 through 2017, overall revenue generated by the U.S. lodging industry grew from $156 billion industry to $208 billion.
The NAACP report shows African Americans and other ethnic minorities are not sharing in the wealth.
The study titled “Opportunity & Diversity Report Card: The Hotel & Lodging Industry,” not only shows stagnation in racial equality in hospitality workplaces, it reveals African Americans have lost ground over the past decade in their climb to the top in U.S. hotel companies.
The report card examines the efforts of four major hotel corporations to diversify their workforces, from rank-and-file all the way up to the C-suites.
None of the companies – Marriott International, Hilton Worldwide, Hyatt Hotels Corp. and Wyndham Hotels & Resorts – fared well in the study, which was based on research performed in 2017. Grades ranged from Bs to Fs in various categories such as hiring, promotion and supplier diversity.
The four companies highlighted in the report have not significantly improved their grades since the last report in 2012.
“Overall, we’re losing ground and we should not be,” Ingraham told Lodging Leaders during the NABHOOD summit. “We in the industry, particularly the brands, particularly leadership, have to realize that our industry should be reflective of America. We want that franchise team to be reflective of ownership.”
Franchised Hotels Targeted
The NAACP research was limited.
Franchised properties were not included. But NAACP and other minority leaders hope to change that dynamic by pushing for information on the diversity of franchisees as well as who is working in their branded hotels.
Alysia Massop, senior manager of full-service franchising at Marriott International, on July 25 participates in a NABHOOD panel discussion that explores how women carve their path to leadership in the hospitality industry.
Marvin Owens is senior director of development at the NAACP. He said the association has examined the lodging industry over the years to track growth in minority employment and promotion.
Despite its decades of research, the organization is stymied in its attempts to find out how many people of color franchise the companies’ brands.
“There are corporations that did not want to give us data,” Owns said in an interview with Lodging Leaders. “They kept saying we don’t measure that, the number of African American franchisees we have; we don’t measure that, we don’t have data on that.
“You only measure the things that are important, the things that are a priority.”
Dawn Chase is director of diversity & inclusion with the NAACP. She was involved in gathering information for the 2012 report as well as the most recent scorecard.
She agreed it is difficult to measure the impact hotel franchisers are having on diversity and inclusion if they do not collect or provide information about the business people who hold their brand licenses.
The report card only grades companies on the properties they own or manage, and Chase said that is a small part of their operations. There is another 80 to 90 percent of their business that is opaque in terms of who the hotel companies do business with.
Chase said other companies, such as Choice Hotels International, were also analyzed but the NAACP published results of companies that had the highest revenue at the end of 2017.
Both Chase and Owens said they want to work with the hotel franchisers to figure out a way to measure the impact they have on owners and to measure diversity and inclusion efforts practiced by hotel owners and managers.
Owens acknowledged that companies often get defensive when under review. But the NAACP doesn’t want to publicly shame the corporations, it wants to help affect change.
“We had to make a decision going into this that if we were going to do a report card the right way we had to maintain an approach to say we are engaging you to engage in change,” Owens said. “We’re engaging you to think about problem solving, here are the issues. We as NAACP want to be a convener of a conversation and resource you in terms of how we fix those.
“That’s the angle that I think might be a new angle for the NAACP,” he said. “We are historically the folks that hold folks accountable in the public forum and demand change. But this time, we know the numbers don’t look good, but let’s now figure out what now needs to happen.”
Ingraham said the latest report card has spurred conversations among the NAACP, NABHOOD and the four hotel companies in the report and others.
Ingraham agrees with Owens that the report card can be used as a tool to engage the companies in new ways to help them grow more diverse across the board. The companies’ commitment to diversity is evident by their support of NABHOOD and its annual summit
“I’m confident, with some of the discussions I’ve had with some of the brand presidents that we’re going in the right direction. It think the NAACP report was a wake-up call after nine years.” Ingraham said.
Choice Hotels, Red Roof, Marriott, Wyndham and Hilton had representatives at the summit. “There are some hotel companies you don’t see at these kinds of conferences but there are others that are here and we are going to work with them to change that report card,” Ingraham said.
Chris Nassetta, CEO of Hilton, participated in a keynote event, sharing the platform with Ingraham and laying out his view on diversity.
WATCH: NABHOOD’s Andy Ingraham interviews Hilton CEO Chris Nassetta at the association’s 2019 summit.
Although the company is ranked tops in diversity, Nassetta said, a lot of work remains to boost its leadership ranks with people of color.
“It makes sense from a business point,” he said. “We are an incredibly diverse industry and we are serving an incredibly diverse customer base. … We have to have diversity in our hotels (and) in our corporate environment. … I view it as an imperative to be successful in business.”