Are hotel companies prepared to face the challenges of 2021 and beyond?



In recent years, the playing field in travel has evolved considerably. Ten years ago, success in hotels was largely based on a business’ ability to roll out identical models and ensure consistency for broadly homogenous travellers. But now things look a little different. The emergence of brands such as Airbnb has fundamentally changed how we think about travel, and guests are becoming increasingly more discerning in areas such as personalisation, localisation and sustainability.

Against this backdrop, Covid-19 has caused significant disruption. While much of the change in consumer behavior will be temporary, some will undoubtedly remain ingrained long into the future, and become the norm as we head out of the pandemic. However, where there is challenge lies huge opportunity, and there will be companies that emerge from the crisis as winners. 

With this in mind, The MBS Group has conducted an analysis of the Boards and management teams of 130 of the world’s largest hotel companies by revenue. In our latest report, Hotel Leadership in 2021, we present our key findings and explore the preparedness of the sector to face the challenges and capitalise on the opportunities of 2021 and beyond.

Our research has revealed that the hotel industry is still dominated by leaders from inside hospitality, and wider sector breadth on Boards is limited. While stable leadership with a depth of industry knowledge is undoubtedly vital, our report shows that the global hotels sector is narrow in its talent pool. On the executive committee, 78% of leaders have no other industry experience aside from hotels, having either spent their entire careers in the sector or transferred from professional or financial services, for example.

These findings beg the question whether today’s hotel businesses have the breadth of experience required to effectively drive innovation and grow sustainably. Senior leaders from other customer-oriented spaces such as consumer goods or retail could provide hotel businesses with valuable insights on consumer trends and patterns. Moreover, areas such as health and safety, sustainability, and global public affairs will be high on the corporate agenda moving forward.

The MBS Group hotel leadership cover

Our research also reveals a dearth of digital and data expertise in the hotels sector. While much of the consumer-facing sector is already driven by data, the hotels industry is lagging behind, despite the emergence of online booking systems giving businesses access to more data than ever before. However, across the global hotels industry, less than 1% of businesses have a data or information role on their executive committee, and only 2% of executive committee members have previously worked in a data-led role. With travel trends more volatile than ever, hotels must harness and utilise data to truly understand their guests in the months and years ahead. Investing in data expertise should be a priority.

Uber, Ele.me, and Amazon have set the expectation for the online customer experience, and consumers have grown used to on-demand services and instant access to information. Hotels must now race to compete with this, and refine their marketing and booking systems to provide similar services. However, less than 2% of executive committee members – and no CEOs in our research – have a background in digital technology or digital marketing.

Our research also looked closely at hotel CEOs. At 11.6 years, we found that the tenure of hotel CEOs is more than five years longer that of adjacent sectors. While leadership stability – particularly in the long-term development cycle of hotels can be beneficial (in 2019, Harvard Business Review found that the world’s best performing CEOs had held their jobs for an average of 15 years) – the significant lack of CEO churn across the hotel industry in today’s climate poses a significant problem. In a fast-changing commercial environment, hotel businesses with long-standing CEOs may find it difficult to inject fresh thinking and find creative solutions to new challenges. 

A table with plates and glassware in a hotel retaurant

This trend also makes it more difficult to address the key issues of gender and ethnic diversity. Our research found that almost all CEOs – 96% – are men, and only 7% of CEOs in North America and Europe are from an ethnic minority background.

On gender diversity, one barrier to progress is the established route to the top for hotel CEOs. Looking at the data, it becomes clear that career in operations or finance is the most likely route to becoming a hotel CEO: today, 51% of CEOs have an operational or general management background, and 41% are finance professionals. However, on the executive committee, 89% of operations professionals are male. As more than half of CEOs are previous operators, and the vast majority of operators are men, it is clear why women find it hard to secure CEO positions. Looking ahead, hotels must work to redress this balance, making operational roles more accessible to women and those with childcare commitments, and prioritising hiring CEOs from outside the operations function.

With all this in mind, how can hotel businesses attract the best talent to provide varied insight and drive innovation? Our report provides five recommendations:

• Foster a culture of openness and inclusivity

Highlight the opportunity to drive change

Focus on sector appeal

Establish a career in hotels as a career accelerator

Create long-term incentive plans

Despite the disruption caused by Covid-19, this is an incredibly exciting time for the hotels sector. While historically the hotel sector evolved slowly and customer demographics and expectations have remained the same, today’s fast-moving landscape requires disruptive thinking to cater for new demands. Powered by the right teams, there are opportunities for hotel companies to drive real change.

Click here to read the full report. If you’d like to explore further any of the points covered in the publication, I’d be delighted to hear from you – please do get in touch.  

sam.seigler@thembsgroup.co.uk | @TheMBSgroup