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According to new research commissioned by AHLA Foundation and conducted by Penn State’s School of Hospitality Management, the percentage of hotel industry board seats held by Black members and women members, is going up. The increase exceeds the 2022 average in both categories for firms in the Russell 3000 Index (a tracking of the 3,000 largest companies in the US) signaling progress in the effort to diversify corporate boards at hotel companies.
Progress in Gender and Racial Diversity
The report highlights multiple gains for the industry, and one glaring omission. The 2022 data set analyzed 230 board members at 28 companies between 2016-2022. Key findings include:
Women occupied 31.3% of independent board seats on hotel public company boards in 2022, a significant increase from 22.5% in 2021. This exceeds the 2022 average for firms in the Russell 3000 Index, which was 28.4% women.
One publicly traded hotel firm has no women on its board of trustees. In 2021, there were two firms with no women on their boards.
67% of directors who were new to a board in 2022 were women.
In 2022, 12.6% of hotel public company board members were Black, a significant increase from 6.5% in 2021. This exceeds the 2022 average for firms in the Russell 300 Index, which was approximately 6% Black and is approaching the overall percentage of the U.S. population that is Black (13.6%).
22% of directors who were new to a board in 2022 were Black.
“It’s encouraging to see this progress. Our industry recognizes that with the board’s role in governance and oversight, increased diversity on hotel boards is a pathway to a more diverse hotel industry,” said Anna Blue, President of AHLA Foundation. “The business case for diversity is clear. Research validates the value of diverse perspectives and experiences in our organizations, which shows up in our business as better recruitment and retention, more innovation, and greater success overall.”
Roadblock to Diversity: Low Board Turnover
The report notes, one of the primary roadblocks to diversifying boards of directors is board turnover or board refreshment. Recent work by the Conference Board indicates that board turnover levels have been low over the past several years at approximately 9%, and remained at this level in 2022. Results from 2022 indicate that the hotel industry lags this metric, with approximately 5% of directors in 2022 being new to the board in that year. While women did make up a large majority of new board members in 2022, the small overall number of new board members means that numerical progress was less significant.
Click here to view the full report.