As mergers-and-acquisitions activity continues at a fast pace in the hotel industry, the tenures of hotel company CEOs might be getting shorter, sources said. Here's a timeline of the major leadership changes in 2017.
GLOBAL REPORT—A seven-year itch appears to control the careers of hotel industry CEOs, but according to sources, the men and women at the top now might start seeing their tenures last a little less than that. One reason for that: The pace of M&A activity, which shows no signs of abatement.
In alphabetical order, some of the large hotel concerns undergoing CEO changes in 2017 were: Carlson Hotel Group, Choice Hotels International, Deutsche Hospitality Group, InterContinental Hotels Group, Jumeirah Hotels, Onyx Hospitality Group, Rezidor Hotel Group, Scandic Hotels, Shangri-La Hotels and Taj Hotels Palaces Resorts Safari.
Some of the changes have resulted from retirements, others due to C-Suite luminaries moving from one hotel company to another, and yet others due to what might be perceived as shareholder pressure, clamor for consolidation and strategic changes in operational direction.
“The year 2016 may prove to have been the calm before the storm with regards to turnover among hotel group CEOs,” said Chris Mumford, managing director at advisory firm AETHOS Consulting Group, which specializes in executive searches among other competencies.
“The industry standard for how long a CEO typically remains in office is seven years with, historically, North American CEOs staying in place longer than those in Asia and Europe,” he said.
There is typically a reason for this, he added.
“Seven years neatly breaks down into three years for a new CEO to develop and implement a strategy, another three years to push that through and see the effects and then a final year preparing to groom and hand over to a successor,” Mumford said. He added that 2017’s moves at Rezidor, Taj, Deutsche, Jumeirah and others are likely to bring this average down.
Thomas Mielke, also a managing director at AETHOS, said upheaval has been goaded by increased consolidation activity.
“Some of this has been driven by M&A activity such as at NH (Hotels Group) and Rezidor, while others have been the result of considered, strategic succession planning—such as Peter Henley handing over to Douglas Martell at Onyx (Hospitality Group) and Richard Solomons passing on the keys to Keith Barr at IHG,” Mielke said.
“Indeed, the number of internally sourced replacements for the CEO position has increased with fewer companies going outside to recruit for the top job. There has also been a return over the past few years to favoring CEOs with prior hospitality experience, and a reversal of the trend the industry saw in the mid-2000s for (fast-moving consumer goods brand-profile CEOs),” he added.
In 2016, high-profile hotel companies with CEO changes included Kempinski Hotels, where current CEO Markus Semer had been with the company for 15 years; and Kerzner International, where CEO Jean-Gabriel Pérès brought a background that included roles at Mövenpick Hotels & Resorts and Le Méridien Hotels & Resorts.
Some, if not many, of these CEOs have shared conference stages with executives whose seats they now occupy. In such a light, the hotel industry can be viewed as relatively small.
Here’s a look at CEO changes at hotel companies in 2017, for which May was the month witnessing the most change:
Shangri-La Hotels—Khoon Chen Kuok retired from his role as nonexecutive director of Shangri-La Hotels, officially resigning on 1 January as CEO. He had held the role of CEO since August 2013 and had first announced his plans to retire in 2016.
Kuok was replaced by Lim Beng Chee, who arrived in January 2017 from CapitaMalls Asia, since newly named CapitaLand Mall Asia, an operator of shopping malls.
Length of tenure: 3 years, 5 months
Carlson Hotels—It is fair to say that Carlson and the companies it either fully or partly owns have had an interesting year, starting with David Berg’s resignation as CEO on 1 February.
Federico González Tejera*
Berg had been with the Minneapolis-based firm since January 2014, when he joined as COO, and had stepped into the role of CEO in May 2015. Berg’s seat was filled the same day he resigned by Federico González Tejera, the former CEO of NH Hotels Group, which is partly owned by Chinese firm HNA Tourism Group. Carlson is 100% owned by HNA.
González Tejera was replaced at NH by Ramón Aragonés, formerly NH’s executive director of business and operations and who arrived from Spanish real estate investment trust Hesperia, which also has a minority ownership stake in NH.
Length of tenure: 3 years, 1 month
Millennium & Copthorne Hotels—Aloysius Lee resigned on 9 December last year from Millennium & Copthorne Hotels, with his last day as CEO on 28 February. Lee began his role in February 2015. He was replaced on 1 March on an interim basis by Tan Kian Seng, who joined the company in October 2016 as group chief of staff and interim president for Asia and whose 30-year career before that was outside the hospitality industry.
Length of tenure: 2 years
Jumeirah Hotels—Stefan Leser had a far shorter reign at the top, leading Jumeirah only from February 2016 to January 2017.
Leser was replaced by Marc Dardenne, who joined the company in September 2016 as group COO and then was announced in May 2017 as interim CEO. Before he started at Jumeirah, Dardenne was CEO of Singapore-based hotel firm Patina Hotels & Resorts. Leser’s predecessor was industry icon Gerald Lawless, who left to become the head of tourism and hospitality at Dubai Holding, the government-owned investment management firm.
Length of tenure: 1 year
Rezidor Hotel Group—Wolfgang Neumann vacated the CEO seat on 5 May, to be replaced by Federico González Tejera, who had been the CEO of Carlson Hotels Group for less than four months following the exit of David Berg.
Neumann started his CEO role in January 2013. On ending it, he was given a seat on the Rezidor board.
González Tejera had been the CEO of NH Hotel Group from January 2013 to June 2016. Before Rezidor, Neumann spent five years at Hilton—two years as president of its United Kingdom region and the next three years with the same title in its European division. HNA has another connection here, as it also owns 25% of Hilton.
Length of tenure: Neumann for 4 years, 4 months; González Tejera for 4 months
Onyx Hospitality Group—Peter Henley retired on 22 May as CEO after a run of approximately nine years leading the Amari, OZO and Shama hotel brands.
Henley was replaced by Douglas Martell, who moved up from being Onyx’s EVP and COO, a position he began in 2014 following 13 years at IHG. Martell is charged with expanding Onyx’s presence in Asia, with the portfolio goal being 99 hotels in the region by 2024.
Length of tenure: 9 years
InterContinental Hotels Group—One of the titans of the industry, Richard Solomons retired on 30 June after a 25-year career at IHG, the last six years at the very top.
He was replaced from within the company, with Keith Barr being promoted from chief commercial officer. Barr has a similar CV, having been in his previous position for four years and at the British company for 17.
Length of tenure: 6 years
Choice Hotels International—Steve Joyce announced on 13 July he would leave the U.S. firm, to be replaced by president and COO Pat Pacious. Initially, the company said Joyce’s last day would be 31 December 2017, but that was changed shortly thereafter to 12 September.
Joyce, who took over CEO duties at Choice in 2008, initially agreed to assume the role of vice chairman of the board of directors, but then left Choice altogether, having accepted the role of CEO at DineEquity, the parent company of restaurant brands Applebee’s and IHOP. Pacious also will take over the chairman role on Choice’s board of directors.
Length of tenure: 9 years
Scandic Hotels—After initially announcing the move in February, Scandic CEO Frank Fiskers left the company with former Starwood executive Even Frydenberg taking over as President and CEO on 31 July.
Fiskers first came on as Scandic’s chief executive in 2007, but left for a period and returned in 2013. Following the transition, Fiskers was to remain on as an advisor to Scandic’s Board of Directors and Executive Committee.
Length of tenure: 8 years (inclusive of two stints as CEO)
Deutsche Hospitality Group—Puneet Chhatwal resigned as CEO of Deutsche, the parent company of Steigenberger Hotels & Resorts, to join Indian Hotels Company, the parent of Taj Hotels Palaces Resorts Safari, a company formed in 1903 and currently with 98 assets. He announced he would leave in October.
After a career at Rezidor Hotel Group, Chhatwal had joined Deutsche in September 2012, and assumed CEO duties in on the first day of 2013.
Taj’s former CEO Rakesh Sarna resigned on 26 May for “personal reasons,” according to a company news release. Sarna had held the CEO role since September 2014.
Length of tenure: Chhatwal for 4 years, 10 months; Sarna for 3 years, 8 months
Extended Stay America—On 18 December, Extended Stay America announced its CEO and President Gerry Lopez will leave the company on 18 March following a few months as senior advisor.
Lopez is being replaced as president and CEO, as of 1 January, by Jonathan Halkyard, who will be promoted from the role of CFO that he has held since January 2015. He started at ESA in September 2013 as COO, and prior to that had a career in the energy sector.
Lopez joined ESA in August 2015 in the CEO role.
Length of tenure: 2 years, 5 months
*Correction, 28 December 2017: This story has been updated to correct two mislabeled images.