The NAACP released a report this week analyzing the workplace diversity of four of the United States’ largest hotel companies—Hilton, Hyatt Hotels Corp., Marriott International and Wyndham Hotels & Resorts—concluding little progress has been made since the organization's 2005 evaluation.
Although the group's 2019 Opportunity and Diversity Report Card: Hotel and Resort Industry report gave the companies average, and in one case above average, overall scores overall, it noted racial and ethnic minorities remained overrepresented in lower-level roles and underrepresented in higher-wage positions. According to data it cited from the Equal Employment Opportunity Commission, the percentage of non-Hispanic whites in top management positions rose from 71 percent in 2007 to 81 percent in 2015.
“As the hotel and lodging industry continues to build a strong base within urban communities, we recognize the overwhelming need for residents of color to have a seat at the table in any and all decision making,” said Derrick Johnson, president/CEO, NAACP. “Decisions made in regards to location, personnel and supplier diversity will have a substantial impact on the longevity and continued inclusiveness of urban areas.”
Andy Ingraham, president/CEO of the National Association of Black Hotel Owners, Operators & Developers, described the report as “a wakeup call for the industry.” Though there’s been some improvement, he said there’s still not been enough. “We as an industry need to a better job at helping to increase the opportunities across the board.”
Ingraham will talk with representatives from the NAACP about the report, among other things, in a panel at NABHOOD’s 23rd Annual International African American Hotel Ownership & Investment Summit & Trade Show in Miami. The discussion is scheduled for the conference’s last day, July 26.
Ingraham said NABHOOD plans to look at the data and then offer recommendations for what can be done. He said a number of NABHOOD’s partners have already gotten the message and are working with the organization to improve their performances.
Overall, the NAACP gave Hilton, Hyatt and Wyndham each a C and Marriott a B. It noted Marriott’s leading status corresponded with it having the largest number of staff focused on equal employment opportunity. Compared to its peers in the study, the company employed more than twice the number of team members focused on advancing diversity and inclusion.
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When asked by Hotel Management for comment, the response from Wyndham was: “We continually strive to improve our efforts to recruit, develop and retain team members from the African-American community and other under-represented groups.” It pointed to its African-American affinity business group that develops team members through leadership, education, innovation and networking and to its partnership with NABHOOD.
When asked for comment on the NAACP's "report card," a spokesperson at Hilton suggested contacting the American Hotel & Lodging Association. Chip Rogers, president/CEO of the AH&LA, responded for the organization, saying: “Hospitality is the starting point for millions to realize the American dream. No other industry has provided more people the first opportunity to begin a career. As an industry, we have supported multiple initiatives in that promote diversity and inclusion, including the recent launch of our Hospitality is Working campaign, our commitment to bridging the employment gap and empowering communities across the country to be successful. While there is always room for improvement, we are committed to working with our members to further advance these efforts and ensure we are a gateway to opportunity for everyone.”
Neither Hyatt nor Marriott responded to Hotel Management's requests for comment.
Supplier Sourcing Also in the Mix
The report stressed the importance of paying attention to diversity, especially when it comes to supplier sourcing. “Minority business owners often lack the financial, social and professional relationships to seek out and bid on lucrative contracts,” the report said. As anchor institutions—large, fixed employers that become a core fixture in a local area—hotels can offset this disparity by seeking out diverse suppliers, it noted.
Though none of the companies received failing scores, they all received poor scores in top management. Marriott again fared best, but with only a C for African American representation and a D for people of color (excluding African Americans). Wyndham performed the worst here, with Fs for both groups. Hyatt received Ds for both groups and Hilton a D for people of color (excluding African Americans) and an F for African Americans.
Based on its findings, the NAACP recommended the hospitality industry as a whole focus on four areas: ownership, boards of directors, top management and supplier diversity. The areas, the report indicated, do not need massive numbers of new people, “but rather targeted, ongoing efforts that can have significant impact over time.”
The report assigned grades for board and workforce diversity; transitions such as new hires, promotions and voluntary and involuntary turnover; and supplier diversity. In each category, the NAACP first determined the raw percentage of African Americans and people of color (excluding African Americans) represented in that specific area. The organization then assigned it a letter grade based on a scale it created.
Generally, a C reflected a percentage in line with the size of the minority population in the U.S. workforce, or across the rest of the lodging industry if that data was available, for that specific area. Consequently, the NAACP set different thresholds depending on what it was examining, whether it was the diversity of a company’s board or its new hires. In general, companies had lower bars to pass for African Americans than people of color (excluding African Americans) and for higher positions than lower ones. For example, a company’s highly skilled workforce had to be at least 11 percent African American to earn a C in that category, while for top management it only had to surpass 4 percent. For people of color (excluding African Americans), it had to surpass 26 and 14 percent, respectively. The report includes a full explanation of its methods and a table listing the cutoffs it used for each metric.
The 2019 report used data from the EEOC and a survey the NAACP developed and those surveyed were asked to provide data from 2017. Workforce data was compared to 2015 EEOC data for the hotel and lodging industry. The survey counted all responses that did not indicate a race or ethnicity as white. In cases where respondents refused to disclose or did not collect data, the report indicated this in the grades and treated that response as a zero.
The four companies varied in the number of hotels for which they provided data, the report indicated. Wyndham, for example, provided data for only 58 of its 5,558 U.S. properties. Hyatt, with almost 600 properties in the U.S., reported diversity and inclusion data on almost all its properties, but did not offer data on the race or ethnicity of its franchisees, the managers of its corporate-owned properties or its suppliers. Hilton only collected diversity and inclusion data on its corporate offices and 274 corporate owned or managed properties and Marriott for its 802 company-operated properties, headquarters and office locations.
It should be noted on June 1, 2018, Wyndham Worldwide Corp. (now Wyndham Destinations) completed the spin-off of Wyndham Hotels & Resorts Inc. (formerly Wyndham Hotel Group), splitting into two publicly traded entities. The report uses 2017 data, so the data the NAACP analyzed applied to Wyndham Hotel Group, not Wyndham Hotels & Resorts. Since 2018, the company’s managed hotel portfolio has grown to include more than 350 managed U.S. hotels. Of those, the NAACP found 28 percent were managed by minorities and 8.7 percent were managed by African Americans. Looking at the report’s cutoff points for property management, these numbers place it well above average. The NAACP gave the company Fs for this category as it only received property management data for 2017 on two corporate owned properties.
Summaries of Individual Report Cards
The report provided in-depth analysis for each of the four companies. The report did also look into and acknowledge efforts the companies have made since 2017. Here are some of the highlights of what it found and recommended.
- Management representation at its corporate offices and corporate-owned and managed properties surpassed or met industry averages.
- Lacked data on African American franchisees, but received an A in that category for people of color (excluding African Americans)
- Board and top management representation were below average. Diversity was on average at the middle-management level and above average at the highly-skilled level.
- Received strong grades in hiring for both African Americans and people of color, poor grades for promotions.
- Supplier and top management diversity worse than 2012 (dropped from Cs to Fs)
- No African Americans or people of color on its nine-member board of directors.
- “Modest improvements” in the lower levels of the workforce
- Has four full-time employees dedicated to staff diversity and in the last year was recognized as the number one Workplace for Diversity by Fortune and the Great Places to Work Institute.
- The Black EOE Journal recognized Hilton as Top Employer, Top Supplier Diversity Program and Top LGBT-Friendly Company for past five years.
- In 2019, mandated diversity and inclusion and unconscious-bias training. General managers, department heads, managers, front-office staff and security team members were required to complete the course within Q2.
- “There is strong potential in focusing on transitioning people of color in skilled positions to middle management," the report noted.
- Did not collect data on race or ethnicity of its franchisees or the managers of its corporate-owned properties.
- “Generally shows weak diversity numbers as it relates to African Americans, with not much improvement from 2012.”
- Decrease in number of people of color working highly skilled positions since 2012.
- Representation across the rest of the workforce remained the same in 2017.
- For people of color, much better inclusion, except in its governing body, top management and promotions.
- Hirings and promotions generally in line with industry averages. For voluntary and involuntary turnover, it received poorer-than-average scores for African Americans and better-than-average scores for people of color.
- Has developed training, monitoring and mentoring processes intended to develop minority, veteran and LGBT talent.
- Stands out against other companies in that collects racial and diversity data on almost all its U.S. properties.
- Has developed Hyatt Workforce 2025 to address the pipeline needs of women and people of color in leadership roles at the corporate and hotel levels.
- Has held Latino, Black and Veterans Summits to identify pitfalls and eliminate barriers prohibiting career growth.
- “Opportunities for improvement include collecting and sharing diversity data for ownership and management, as it did in 2012; sharing supplier diversity data; and working on inclusion of people of color (excluding African Americans) on its board," the report said.
- Outside of D with regards to franchise ownership by African Americans, scored above average for both groups at the management and ownership level.
- Received largely high scores across workforce categories for African Americans. For people of color, it performed poorly at the board and top management levels, but very well across the rest of its workforce.
- Very little change in workforce diversity since 2012 for African Americans; supplier diversity has declined for both categories since 2012.
- Did not report on non-voluntary turnover, which the NAACP recommended it change.
- For African Americans, new hires, promotions and turnover are on average; for people of color, it received above average scores in each of these areas.
- Despite a D in spending for African Americans and a C for people of color, it reported the largest expenditure ($26 million) with African American suppliers of the four companies.
- Has 18 full-time staff dedicated to workplace and supplier diversity.
- President/CEO Arne Sorenson chairs the company’s Global Diversity and Inclusion Council, which monitors plans, actions and results.
- Has a committee for excellence that reviews its diversity and inclusion results and works directly with senior leadership to discuss progress and goals.
- Establishes specific annual goals and monitors progress.
- “Much room for improvement exists with regard to Tier 1 supplier diversity, African American franchise ownership and inclusion of people of color (excluding African Americans) on the board and at top management levels.”
Wyndham Hotels & Resorts
- High scores for board diversity (an A for African Americans and B for people of color)
- Failing grades in franchise ownership (did not report) and top management.
- Lower levels of African American diversity in several categories compared to 2012 (top management down from a C to an F, supplier diversity down from an industry-leading B to an F).
- Better performance for people of color: above average scores for highly skilled workers, supplier diversity and voluntary and involuntary turnover
- A rate of involuntary turnover for African Americans much higher than the proportion of its African workforce. For comparison, the NAACP pointed out white involuntary turnover was less than their percentage of the workforce.
- Has developed a cross-functional team at the C-suite level. It meets quarterly to set goals for diversity and inclusion training, recruitment and retention.
- Seven full-time staff dedicated to workforce and supplier diversity.
- Offers franchisees diversity and inclusion training online. Wyndham managers are trained to identify conscious and subconscious biases in the hiring and disciplinary processes. Uses third-party recruitment firms with special programs aimed at diverse recruitment.
- “Much room for improvement exists in the top management categories and in increasing the number of hotels from which diversity data is collected. The practice of having diversity data for about 1 percent of its properties is inadequate.”