The release of Castell Project’s third-annual report “Women in Hospitality Industry Leadership 2020” highlights that women are growing in leadership share and gaining acceptance in virtually every field across the industry.
The increase in women in leadership is happening for the right reasons, including enlightened self-interest. In a massive study of the Russell 3000 universe, the S&P Global Market Intelligence Quantamental Research Team reports on the superior performance of companies with gender-diverse leadership, finding that:
“Female CEOs drove more value appreciation and improved stock price momentum for their firms. Female CFOs drove more value appreciation, better defended profitability moats, and delivered excess risk-adjusted returns for their firms.”
These researchers went on to analyze why women leaders perform so strongly and found that drawing on a significantly larger talent pool that includes women, instead of only men, brings additional exceptional people into leadership. When we say, “may the best person win,” instead of “may the best man win,” business benefits.
Unlike STEM fields, which struggle to attract women, in hospitality more than half of employees are female and a significant majority of college majors are female. This gives the hospitality industry advantage in the strength of its talent pipeline. But, while making gains, the industry is still struggling to develop women into upper levels of management.
According to “Women in the Workplace 2019,” research from LeanIn.Org and McKinsey & Company, representing data from 329 companies employing more than 13 million people:
“A ‘broken rung’ at the step up to manager is the biggest obstacle that women face on the path to leadership.”
On the corporate side of the hospitality industry, that broken rung appears at different levels in each company–some at the step to general manager, others at the step to VP or EVP or C-suite. Overall, women held just 8% of hospitality industry leadership positions in 2019, including managing director, president, partner, principal and CEO roles. Women held 14.6% of C-Suite positions with most in human resources, accounting and marketing.
These figures are slowly improving and should accelerate as women gain critical mass in each field and at each level. When there are at least three women on a team, or a board, success rate improves. This is a significant cultural change.
In a year of headlines and some backlash to the #MeToo movement, it is important to remember that we still are processing other important cultural changes around gender equality. For instance, until 1978, pregnancy was grounds for firing a woman. It is not surprising that underlying attitudes in many companies still assume that mothers do not want careers.
The change around women taking positions with financial control–P&L responsibility–garners few headlines but is a significant cultural shift. It has only been 46 years since legislation gave women equal access to credit. Leaders of many companies–or the mothers, fathers, school administrators and academic departments of finance who trained them–were brought up in a time when women were not considered financially responsible. Awareness about this in popular culture increased with movies about Ruth Bader Ginsburg in 2019.
Female professionals themselves are part of the solution, too. Castell Project has found areas in which women are perceived so differently that they benefit from gender-specific leadership development. These areas include negotiation and communication as well as developing executive presence and building relationships with advocates. Also key are a resource network of other women both within and outside firms, and access to career planning services experienced in working with successful women. The Castell BUILD and Castell ELEVATE programs are built around providing resources in these critical areas because very few firms are large enough to provide these resources internally.
Seven women were promoted to CEO in 2018-19 in the dataset represented by the STR Directory of Hotel & Lodging Companies. This is a 20 percent increase in the number of female CEOs in the dataset. Notably, these new CEOs include women in major international corporations such as Heather McCrory at Accor. Heather McCrory was the recipient of the inaugural Castell Award presented at The Lodging Conference to celebrate the remarkable female talent in the hospitality industry. Women also reached CEO in aspects of industry outside this dataset, including Leslie Hale at RLJ Lodging Trust in 2018.
The ongoing cultural shift is a big adjustment both for business leaders and for women finding their way in business. Numbers in this report indicate that this shift is accelerating. It will benefit the industry greatly.
Peggy Berg heads the Castell Project, a non-profit advancing women in leadership in the hospitality industry. Under her guidance, Castell delivers leadership development for women, benchmarks the status of women in the hospitality industry and promotes women on the podium. Women in Hospitality Industry Leadership 2017 is available for free download at: www.CastellProject.org. A franchisee of Hilton and Choice, she has owned and operated hotels. A well-known consultant, she was the first female employee elected by the PKF partnership and she built The Highland Group, Hotel Investment Advisors, Inc. Peggy is chairman emeritus of the International Society of Hospitality Consultants. For the AHLA she chaired the Georgia Hospitality and Travel Association, founded the Extended-Stay Council, and co-chaired the Council of Inns & Suites. She holds a BS in Business from the School of Hospitality at Michigan State University, is a CPA, and earned her Masters in Public Policy from Georgia Tech.
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