How Diverse is Your Hotel Company?
By Christian Anklin
Friday, 21st December 2007
Take a closer look at the principle of diversity and examine the efforts of international hotel management companies in contrast to other industries.It is hard to imagine an industry more international than hotels. By its own nature, the hotel industry accommodates the avid traveller by offering hotels in the farthest reaches of the world.

Thus there is hardly a location or destination left that is not host to several hotels. Increasingly, these hotels are branded and managed by global hotel management companies.

International hotel management companies are among the forerunners of globalization. In an effort to achieve economies of scale and to be able to offer their customers a bed wherever they choose to go, the major hotel chains have extended their reach to be truly global players. As part of its annual Hotel Giants Survey, Hotels Magazine publishes a league table of the most international hotel companies. The leader of this group, InterContinental Hotels Group, is represented in 100 countries.

Another inherent aspect of the hotel industry is the global mobility of its workforce. It is the norm, especially for hotel management employees, to have worked in several cities and countries. Take any medium sized hotel in the world and you are likely to find that its staff comprises at least five different nationalities among the various departments. IHG employs approximately 22,000 people in their corporate offices and in the hotels they manage, and they proudly proclaim that no fewer than 47 languages are spoken by people working for the group.

In light of the ubiquity of hotels, the global reach of hotel management firms and the global mobility of hotel staff, one might surmise that diversity in terms of nationality and possibly also race must be relatively high in these companies. But diversity is much more than fostering an internationally and racially diverse workforce. As a cornerstone of Corporate Social Responsibility (CSR), it is about the inclusion of all types of minorities in terms of gender, religious belief, age, disability, sex, sexual orientation or ethnic origin.

At the recent annual European conference of the Association of Executive Search Consultants (www.aesc.org ), the governing body for the executive search industry, diversity among executives (or the lack thereof) across a variety of industries was a hotly debated topic. The consensus was that the majority of companies still have a long way to go in order to achieve true diversity in their workforce.

Issues of diversity in the broader context of CSR have received increased attention among public companies, especially in the United States, over the last 15 years. Regardless of the different possible motives to do so, more and more companies want to, at least, be seen as "doing the right thing" and ensuring diversity among their workforce and their suppliers is one way of achieving this. Naturally, many of the global hotel management companies have followed suit.

Surprisingly, however, the degree of follow through varies greatly among the big players. Let's take a look at the Hotel Giants Survey mentioned earlier.

Thelist below givesthe top hotel management companies ranked by the number of countries in which they are represented and names the CEO.

Hotel Giants Survey 2007 - Companies In The Most Countries
  • InterContinental Hotels Group 100 Andrew Cosslett
  • Starwood Hotels & Resorts 95 Frits van Paasschen
  • Accor 90 Gilles Pelisson
  • Hilton Hotels Corp. 78 Steve Bollenbach
  • Best Western International 78 David Kong
  • Carlson Hospitality Worldwide 70 Marilyn Carlson Nelson
  • Marriott International 68 Bill Marriott
  • Wyndham Hotel Group 55 Stephen Holmes
  • Golden Tulip Hospitality 49 Hans Kennedie
  • The Rezidor Hotel Group 49 Kurt Ritter
  • Global Hyatt Corp. 44 Mark Hoplamazian
  • Choice Hotels International 40 Charles Ledsinger
  • Club Mediterranee 40 Henri Giscard d'Estain
  • Four Season Hotels & Resorts 31 Isadore Sharp
  • TUI AG/TUI Hotels & Resorts 29 Michael Frenzel
It would probably be considered slightly unfair to point out that, among the 15 CEOs of these companies, only two are not Caucasian males. While this fact is certainly food for thought, we should probably be looking at these companies' current degrees of diversity as measured by the percentages of various minority groups in their total workforce, as well as their commitment to diversity as witnessed by the institutions and mechanisms that have been put in place.

Unfortunately, the percentages of minorities are not published to an equal degree by all of these companies, nor are most of these numbers verified by a third party.

A recent study in the International Journal of Contemporary Hospitality Management attempted to ascertain the level of socially responsible behaviour among the top ten hotel management companies, as evidenced by the degree of reporting of such behaviour on their websites. The researchers also used a Hotel Giants ranking for their study but they chose the list of those hotel companies with the most properties under management. The study found that 60% of these companies reported some form of diversity policy.

Employing a similar method, we analyzed the websites and annual reports of the 15 most international hotel companies listed above for two criteria: the mention of diversity as a principle of the company and evidence of an existing organizational entity to ensure diversity, such as a diversity representative or committee. We found that 11 of the 15 companies mention diversity in some way, but only seven of them cite a dedicated representative or committee in charge of diversity.

It is comforting to know that the majority of international hotel companies have recognized that diversity is an issue which is important enough to be mentioned in their publications. However, without a designated, publicly acknowledged guarantor of diversity within their company, they could be accused of simply paying lip service to an increasingly popular cause. It is tremendously important for a company to publicly state its commitment to diversity, so as to ensure that all stakeholders can be reminded of its importance, but it is the diversity representatives that will ensure companywide consistency in the implementation of diversity initiatives.

Best practice suggests that there should be a diversity committee at the board level, chaired if possible by the chief executive, to ensure that broad companywide diversity strategies and goals are set and their achievement measured regularly on a macro level. According to DiversityInc (www.diversityinc.com ), a leading publication on diversity and business: "No area of diversity management is more essential to business success than deep-rooted, publicly stated support from the top, including signing off on executive compensation linked to diversity goals and chairing the diversity council."

There should also be a representative who ensures that diversity is being fostered on a corporate level. This can be the Chief Diversity Officer or the VP of Diversity, for example. Further down the ladder, there should be regional and on-property committees who can deal with local issues and launch local initiatives. Finally, a really proactive company should follow the lead of companies such as Ford Motor Company, which not only requires a board review of its CSR practices, but also has an independent, company-external diversity council.

DiversityInc publishes an annual Top 50 Companies for Diversity list. Both Marriott International and Starwood Hotels & Resorts made the list in 2007, but they only achieved ranks 46 and 47, respectively. Considering the nature of the hotel business as outlined at the beginning of this article, one would expect more hotel companies to be on this list and also for them to achieve higher ranks.

Among the top 5 on the list are international U.S. based companies such as Pepsi, Coca-Cola and Ford Motor Company whose non-U.S. business ranges from 30% to 73% of their total. However, international presence alone does not foster diversity. Apart from being international, the leading companies on the list have two things in common: They display strong, public CEO commitment to diversity and tend to have a high ranking diversity representative.

Another pattern that emerged from our analysis is that every U.S.-based hotel company in the sample at least mentions diversity as a guiding principle of the company. This can certainly be attributed to the more stringent corporate government requirements that exist there, but it also suggests a greater awareness for issues of diversity than there is in Europe. Whether or not a broad international presence leads to an internationally and racially diverse workforce, this alone does not make a company truly diverse.

Companies must implement proper CSR practices and be publicly accountable for their efforts. In spite of becoming increasingly international, hotel management companies have a long way to go in achieving true diversity, and European hotel management companies in particular are trailing behind their American counterparts.

Employee retention is widely accepted as one of the top issues of our industry. In light of the increased competition for a finite skilled workforce, none of these companies can afford to be complacent in regards to offering an equitable and diverse work environment.

About Christian Anklin
Christian Anklin is a Senior Associate at HVS Executive Search in London, the leading executive search firm specializing in the hospitality industry. A graduate of Lausanne Hotel School (EHL), Christian has authored several articles on a range of hospitality recruitment and compensation issues. Christian is President of the Great Britain Chapter of the Alumni of Lausanne Hotel School (AEHL). www.hvs.com
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