Dive Brief:
- The percentages of hotel industry board seats held by Black members and women members were up in 2022, according to a report commissioned by AHLA Foundation and conducted by Penn State’s School of Hospitality Management.
- The report found that in 2022, 12.6% of hotel public company board members were Black, up from 6.5% in 2021. Additionally, the number of women occupying independent board seats on hotel public company boards in 2022 increased 8.8% year over year, from 22.5% to 31.3%.
- Industry-wide, Black employees and women employees in hospitality hold more leadership positions, including board, executive and ownership roles, than in the past. However, these groups remain underrepresented in most cases. According to the report, some companies have begun broadening their search beyond C-suite members to diversify their boards.
Dive Insight:
From 2021 to 2022, there was improvement in the percentage of board seats held by Black directors and a small increase in the number of board seats held by women, the report found. However, these gains can be largely attributed to merger activity and/or bankruptcy among several firms included in the 2021 sample, decreasing the total number of board members used in calculating the percentages.
Out of the 28 companies studied, seven firms had no Black board members, while only one, RLJ Lodging Trust, had a majority Black board.
There were no boards in the hotel industry that achieved gender parity, the report found, with the most gender-diverse boards having approximately 40% to 45% women directors. One publicly traded hotel firm had no women on its board of trustees in 2022 — an improvement from the previous year, when two firms had no women on their boards.
Despite being underrepresented, Black members and women members occupied more board seats at hotel companies compared to other industries, the report found. The percentage of Black board members (12.6%) and women board members (31.3%) exceeded the 2022 average for firms in the Russell 3000 Index, which was 6% for Black members and 28.4% for women.
One barrier to diversifying boards of directors is the long tenure of members, resulting in little board turnover, according to the report.
Another barrier is the large percentage (21.2%) of sitting hotel industry board members who are CEOs, as Black and women employees are also underrepresented in C-suite positions in the hotel industry.
There is one Black CEO or president for every 92 positions, and women hold one in four chief-level leadership roles at hotel companies, according to two separate reports also commissioned by AHLA Foundation and conducted by Penn State’s School of Hospitality Management.
In order to acquire a greater diversity of backgrounds, experience and knowledge, companies have started to broaden their search for members beyond the traditional pool of CEOs, the report said.
