The dual crises of the COVID-19 pandemic impact on travel demand and racial unrest across the U.S. present opportunities for hotel companies and the industry to get stronger and better, the chief executives said.
REPORT FROM THE U.S.—The CEOs of a top hotel brand and the second-largest publicly traded hotel real estate investment trust say the hotel industry must seize this moment, as difficult as it might be.
That includes making the most of a crisis to strengthen companies and the industry for the long run and responding to overwhelming calls for change regarding race relations, diversity and inclusion.
Hilton President and CEO Chris Nassetta and Tom Baltimore Jr., president and CEO of Hilton-spinoff REIT Park Hotels & Resorts, spoke candidly about the moment facing the industry during separate sessions as part of NABHOOD 2020, the online conference of the National Association of Black Hotel Owners, Operators and Developers.
“I think it was Rahm Emanuel, and maybe someone before him, who said, ‘Don’t let a good crisis go to waste.’ You know, that’s my attitude,” Nassetta said.
“We have an obligation. There are a lot of souls on board this ship … between customers and owners and our team members and all the people in the communities that we serve. I take that responsibility very seriously.”
On the recovery
Calling himself an optimist, Nassetta said he is confident Hilton and the hotel industry will emerge from the crisis brought on by the COVID-19 pandemic stronger—particularly if companies see and act on opportunities to become leaner, while standing firm on their guiding principles and values.
“We’re not through (the crisis); we’ve got a long way to go … but I think we’re past the worst of it, and my own view as the eternal optimist is we are on the road to recovery,” he said.
“When we wake up two or three years from now, and you can mark the day … I think we will feel very good about the business.
“I’m really proud of everything that our family at Hilton has done. We’ve always been, since the founding of the company 101 years ago, driven and united by purpose, committed to being part of solutions and honestly trying to help lead society and help lead our industry to the extent that we can, and making the world a better place,” he said. “All of us need to pitch in and put our shoulder into making the world a little bit better place at this time. It’s been an especially difficult time.”
He emphasized that any crisis is an opportunity to make companies and the industry stronger.
“Certainly … we have some wood to chop to get fully to the other side. As an industry, if we stick together and do the right things by our customers, do the right thing by our owners, do the right thing by our team members, we’ll end up ultimately in a really good place,” he said.
A big part of that effort is a commitment to empowering people and promoting diversity and inclusion, he said.
“We can’t be successful in achieving our fundamental purpose without it,” he said. “It’s a big world, and we’re serving an unbelievably diverse customer base. There is no way to do that, in the way that we need to, without having incredible diversity in our own ranks, to serve those customers, to make decisions on how to best deliver the experiences and the hospitality they want.”
Work to be done
Baltimore, who cited great mentors as key to his career success, starting as an intern at Marriott Corporationthrough stints at Hilton and the founding of RLJ Lodging Trust, said current events around the Black Lives Matter movement have spurred more dialogue on the importance of diversity, and companies in all industries must turn that conversation to action.
“When you think about Black Lives Matter and the number of white people, young and old, who are out protesting, walking, saying ‘We’ve got to change, and we’ve got to be different,’ and having a dialogue … that didn’t happen so easily before,” he said. “We have to seize the moment.”
He said the hotel industry has made progress on this front, but work remains to be done.
“There are a number of really talented African-Americans in this sector,” he said, citing leaders including RLJ President and CEO Leslie Hale. “All of them are inspirations, and I suspect what all of them would say is that preparation is important, getting that foundation, but also mentoring. What I always say is that my mentors turned to sponsors. They were largely men at that time who were raising their hand and saying, ‘Tom can do that; he deserves that opportunity.’”
Baltimore added companies need to be systematic with how they mentor and present opportunities to people of color.
“I know that companies are committed, but we’ve got to do a better job getting distribution, building the pipeline. By that I mean, within companies, getting people there in analyst programs, asset management, people on property, getting men and women of color that are in sales and marketing, that are assistant GMs. The beauty of this sector is that there are so many different ways that you can ascend, and we’ve got to build the pipeline,” he said.
Nassetta noted Hilton’s recent accomplishments in this area include adding Chris Carr, COO of seasonal restaurant brand Sweetgreen, to the company’s board of directors.
“We’ve done some things right, but here’s the thing: We haven’t done enough,” he said.
“All of us in this industry particularly, but across all industries, if we all just lean in and do a little bit more, we can make a big difference. … There’s no silver bullet; government or changing laws isn’t going to fix this entirely. There’s certainly things that can be done to make it better, but this is where business can be so impactful. … For me, it’s critical to our success. The only solution is to focus on equality, and the only way to get there is through opportunity.”
He said it’s imperative, this time, to not allow the conversation and call to action to simply fade into the background.
“These things, they flareup, and then we talk about it for a while, and then it dies back down and we don’t act. … Let’s help keep people’s feet to the fire … and that means top down and bottom up, having real diversity on your board, real diversity in the most senior ranks of management,” he said.