LOS ANGELES — Diversity and inclusion, along with the reshaping of the operations portion of the hotel industry, were two of the biggest recurring topics at the 2022 Americas Lodging Investment Summit.
Speaking at the conference, Benchmark Pyramid CEO Warren Fields and recently retired former BWH Hotel Group President and CEO David Kong shared their insights on the changes the industry needs to make in those areas.
Benchmark Pyramid came about as a merger announced in late September 2021 — part of a spate of recent mergers and acquisitions in the third-party management space.
As his former company, Pyramid Hotel Group, continues its integration with Benchmark Global Hospitality, Fields said one of the surprises of the process has been how similar the two companies already were.
"Sometimes when we have these combinations, there's just a lot of differences in how the companies work," he said. "Our companies, the combined companies, the cultures were the same, with a little different nomenclature."
Fields said the companies will be fully integrated by the end of 2022, and he believes the merger has not been a distraction from hotel operations.
"A lot of [integration] has to do with systems: HR systems, getting all the employees on the same healthcare system, accounting systems. And all of that stuff is really above the property level," he said. "One of the goals of the merger was to not impact anything at the property level at all. ... The teams at the hotels, well they have enough to do with the pandemic, labor shortages, supply-chain issues."
Fields said he expects many more mergers and acquisitions of management companies as it is still an overall fragmented space and market conditions make it more favorable.
"Right now, I think there's consolidation because, while more scale is not always better, scale creates more opportunities. It creates cost reductions," he said.
Fields added that scaling up and becoming more sophisticated will be vital, since labor shortages "are here to stay."
"The companies that win are going to be the companies that figure out how to use data, figure out how to do things smarter, better, faster with less," he said.
That will include making some permanent changes to the operating model in the industry.
"As an example, we should not be going back to cleaning rooms every day," he said. "There's no reason to. Most guests today are saying, 'I don't want you to come in my room every day.' I also believe we should be charging" for housekeeping.
C-Suite Diversity
After accepting the inaugural Arne Sorenson Social Impact Leadership Award, Kong said in his roughly two decades at the helm of Best Western, he was often held up at industry events as the "token minority" CEO among the hotel brands.
"This is something that we all recognize is wrong, right?" he said. "We all want to change that."
He said increasing minority leadership in the industry is going to be one of his main focuses following his tenure at Best Western.
He acknowledged that overall the hotel industry is extremely diverse and "reflective of the diverse customer base" who patronize hotels. But when you look at the industry as a pyramid, that diversity lessens closer to the top.
"As you move up this hierarchy, this triangle, you always see less and less representation, so the [overall] statistics of the industry don't really tell the story," he said.
Kong said he's particularly encouraged by the efforts made by women in leadership roles in the industry to "improve the situation."
"I do believe that over some time that things are going to improve," he said.