Close

Cart

Total $0.00

Checkout

By Chris Mumford, Thomas Mielke, and Dominic Maurer

Turnover of Chief Executives at the world’s 50 largest hotel groups (as per HOTELS 325 2018 Listing) remained flat for 2018, with new faces appearing at the head of four companies, the same number as for the prior year. Changes in CEO positions were seen at G6 Hospitality, Extended Stay, Millennium & Copthorne and B&B Hotels. Of these, three were planned moves. Jennifer Fox’s three-month stint at Millennium & Copthorne, though, can only be assumed to have been anything but planned. A sector turnover rate of 8% is well under the average for the general industry and speaks to a current period of leadership stability that has run since we last saw a spike of 14% in 2015.

This sense of stability is enhanced further when we carve out the majors, the ten largest global hotel brands. Among this group there was not one change in the CEO role in 2018, and the two in the previous year had been very smooth, well-planned, succession events at Choice (Pat Pacious) and InterContinental Hotels Group (Keith Barr). Having tracked CEO turnover for the hotel industry since 2004, we have discerned a correlation between market conditions and the profile of required leadership. The days of the Global Financial Crisis witnessed a surge in new CEO appointments as boards sought the requisite executive direction to steer them out of economic difficulties – seven changes in 2018. Once out of recovery mode, stabilised and firmly into expansion mode, another spike in turnover was seen five to six years later when firms went after leaders who could deliver aggressive growth – eight changes in 2012.

As David Mansbach, Managing Director at AETHOS Consulting Group, recently highlighted in his article on the lack of diversity at US restaurant groups (click here), so too is the hotel sector under-delivering in its representation of women in CEO roles. We are pleased to see a gradual climb in the number of female CEOs, having risen from 2% in 2011 to 16% in 2018, with the addition of Sabina Fluxa at Iberostar and Avia Mizrachi-Magen at Fattal. The pace of change however is glacial and, more disturbing, when we look at our Top 10 group, there is not one woman on the list. This issue seems especially pertinent in North America, where none of the largest hotel groups has a woman in the driver's seat.

The time to be a CEO is clearly in one's 50s. Most assume office at the beginning of their sixth decade and leave shortly before hitting 60. The youngest CEOs are to be found in Asia and at private companies as opposed to publicly listed firms in which a few extra years of experience appear to be valued. When it comes to experience, boards of directors have shown a stronger preference for in-depth knowledge of and track record in the hospitality sector. The number of CEOs from the hotel space has gone up, particularly during the past few years of dynamic sector growth.

If we focus on the Top 10 largest multinationals, we see that industry expertise has become much more highly valued over the past 15 years, with every CEO in this group having cut their teeth in the hospitality sector prior to taking the top job. The days of opting for a CEO hire from alternate sectors, such as FMCG, appear to be a thing of the past. Similarly, as global expansion has been at the forefront, the individuals holding these leadership positions have become increasingly better travelled than their predecessors.

The percentage of CEOs with prior experience working in a foreign country rocketed from 20% to 60% over the 2004 to 2018 period. A positive trend has hotel ceo studybeen the increased separation of CEO and Chair titles. When we began surveying, half of the CEOs were also Chairs of the board of directors. The pressure for better, more transparent, corporate governance has – we are pleased to say – resulted in clearer distinctions between the role of the Chairperson and CEO and their related accountabilities. The average tenure of CEOs at these Top 10 firms is heading back to tracking with the industry average of nine years. This had slipped in 2012 to an average tenure of three years, but the past few years of stability have seen this climb to six.

According to industry talk, we may be at or near the peak of the cycle. If that is true, we should not be surprised to see turnover potentially picking back up in 2020/2021. As we have seen, economic adversity typically triggers a higher degree of scrutiny placed on those running businesses by their shareholders and owners, which often results in a new nameplate being fixed to the door of the CEO office.

About Chris Mumford

Chris Mumford has over twenty years of hospitality-related executive search and human capital consulting experience globally. Having studied and worked in the UK, Germany and Japan, Chris opened the US office of a London-based hotel recruitment firm in the late 90's. In 2002, he joined a leading global executive search firm and returned to his native UK to establish the EMEA practice. In 2013, Chris co-founded AETHOS, and today remains particularly active in the Asia, Europe, and Middle East regions advising hospitality organizations on compensation, leadership and organizational issues while also facilitating senior executive appointments. Chris is a frequent author and invited speaker on human capital topics affecting the hospitality sector.

Contact: Chris Mumford

cmumford@aethoscg.com / +44 79 7697-2448

About Thomas Mielke

Thomas Mielke is a founding member of AETHOS Consulting Group, and has a track record in successfully placing senior executives at leading hospitality companies across the EMEA region. He is an AESC certified consultant and is working together with travel wholesalers, real estate developments firms, investment companies and sovereign wealth funds as well as leading restaurant brands in identifying key talent and has joined forces with clients in establishing compensation schemes as well as organizational structures and workflows.

Contact: Thomas Mielke

tmielke@aethoscg.com / +44 74 1121-0650

About Dominic Maurer

“Choose a job you love and you will never have to work a day in your life.” This quote perfectly encapsulates my passion for the hospitality industry and my chosen career path. The huge diversity of this industry allows each one of us to gain an array of experiences and ultimately to leave our own footprint.

Contact: Dominic Maurer

dmaurer@aethoscg.com / +44 77 3603-4826

Related News

Redefining Hospitality Leadership: Kerten CEO Marloes Knippenberg on Management Philosophy and Delivering Organisational Success

Board Diversity Within The Lodging Industry – Moving Away From Ordinary Thinking

Directing The Spotlight On ‘Big Data’, Technology And Sustainability

Compensation for US CEOs in Lodging: Fair Pay Is a Real Issue

The Evolution Of Private Clubs

Gaming CEO Pay in a Year of Reckoning

2019 and Lodging Technology: Is There a One-Size-Fits-All Approach?

2019 Insights for Human Capital in Hospitality: Challenges in Finding Labor and Artificial Intelligence Among Trends in the US

Hospitality & Technology - What to Look for When Hiring a CTO

The ‘Hack’ Leaders Should Use in Today’s Quagmire of Ambiguity

Reimagining Sales Leadership With Josh Lesnick, President & CEO, Associated Luxury Hotels

Hospitality & Technology – Innovation is Being Stifled by Lack of Leadership

Hospitality Leadership Series On ‘Professional Visibility’: The 3 Cs of Executive Presence

Hospitality Leadership Solutions Series: Is Self-Confidence Friend or Foe?

A Welcomed Metamorphosis of the Chief Human Resources Officer Function

Putting 'Job-Hopping' in Proper Perspective

Q&A With Kristie Goshow, CMO at Preferred Hotels & Resorts

GDPR in the EU and UK: AETHOS' 3 Steps for Complying with Employer Responsibilities

Talking Environmental Psychology and Guest Experience with Aesthetics Expert Elizabeth Weiner

NIMBYism: The Most Significant Cultural Threat for our Industry in 2018

All News »

Please login or register to post a comment.