Earlier this year, the president signed several executive orders purporting to do away with Diversity, Equity, and Inclusion (DEI) efforts in the public sector, declaring some measures to be illegal, with the goal of restoring merit-based opportunity. The private sector was also targeted by these orders. These measures prompted many private companies to take a closer look at their in-house DEI initiatives, some of which resulted in businesses rolling back those programs to appear to be more aligned with the government’s edicts.
For the most part, the hospitality industry has embraced DEI, particularly as hotels generally employ a diverse workforce. Many brands have put those efforts into practice and believe that DEI plays a pivotal role in emphasizing the guest-centric nature of the hospitality sector. After all, most hoteliers agree that a culturally diverse workforce resonates with the global traveler. Despite these efforts, diversity in senior leadership has lagged behind diversity in entry-level positions. Still, the vast majority of the larger hotel brands have been vocal about their commitment to DEI.
But regulatory headwinds have changed, with increased political opposition to DEI. Despite the governmental pivot, many brands are standing firm, though not many are being outwardly vocal about their intentions. One exception was Anthony Capuano, CEO of Marriott International, for example, issued a statement at the Great Place to Work For All Summit, doubling down on his company’s commitment to continue its DEI policies: “The winds blow, but there are some fundamental truths for those 98 years,” Capuano said. “We welcome all to our hotels and we create opportunities for all—and fundamentally those will never change. The words might change, but that’s who we are as a company.”
Many other hotel brands, such as Wyndham and Omni still maintain DEI-related wording on their websites. Jimmy Suh, the president of Arlo Hotels, a boutique hotel chain, also pledged to continue DEI efforts. “It would be rather foolish for any hospitality company to deviate away from the DEI initiatives when our very existence is to serve people from all walks of life…and we can only do if we practice what we preach,” he said, in statement on the company website on June 2.
Others have erased specific DEI language from their websites, even if they are still quietly adhering to its principles.
Semantics Change, Concepts Intact
Words are changing, but the concepts remain intact: that's what some industry insiders believe will be the next phase of DEI in hospitality, so as not to run afoul of the executive orders. Most do not believe that the executive orders will change the way hotels operate in the DEI space, at least internally.
David Kong, the former CEO of Best Western, past president of the American Hotel and Lodging Association, as well as the founder of the nonprofit DEI Advisors, a nonprofit, said that DEI initiatives in hospitality focus on recruitment as well as training, development and promotion.
Anna Blue, former president of the AHLA Foundation and now a senior strategic advisor with RTRX, has several decades of experience working in the social impact space, with over a gender working in gender equality.
“From an internal standpoint, they are staying the course and calling it something different. I wouldn’t’ categorize them as truly doubling down but many are publicly traded companies, so it’s a very challenging line to walk,” Blue said. “I think they are staying the course but calling it something different, in order to appease some folks in the company. In reality, that same external rhetoric is happening within the hospitality ecosystem; it’s a dance for sure.”
She added that if any hotels are reversing course on DEI, they are not doing so publicly.
“Practices and processes are the same, but I think they are being very careful about the targets that they set. I don’t hear anyone saying, ‘I want 50 percent of my general managers to be female,’ as that implies a quota,” Kong added.
He said that every business will proclaim the value of diversity, because that is where innovation happens. “Treating people fairly is the standard for good leadership,” he said.
Kong added that companies are applying different descriptors for their DEI programs, and that the underlying principles will remain. “Companies are smart enough to realize that they need to give people opportunities and promote talent fairly. The CEOs are all very smart people and are all very good at what they do. They get it. They get that inequity. I have a lot of faith in them.”
Internal DEI Efforts and Challenges
Blue said that DEI in hospitality is often represented by affinity groups—groups connected by shared interests. A type of affinity group—ERGs (employee resource groups), began to crop up in hospitality. For example, some brands have implemented some women-focused initiatives such as Wyndham’s Women Own the Room and more.
“You really saw these starting in 2018 with the rise of the gender equity movement, and in 2020, with Floyd’s murder and the rise of racial justice, you saw reactionary programs,” Blue said. However, she noted that despite the existence of these groups, they haven’t moved the needle much in terms of gender equity.
Blue said that, generally, DEI programs, while they make employees feel that the company is invested in them, do not actually work in terms of actual outcomes. “I’ve seen this in the gender equity space for many years; programs being created but they don’t actually close the pay gaps, the leadership gaps, the power gaps, but they make it feel like your company is invested,” she said.
Thus, while many brands are outwardly vocal about DEI, the biggest challenge is to tie these efforts to actual outcomes. “If you’re going to create an impactful DEI program, you start with the end. You ask, ‘what outcomes will be created through this program?’, then build programs, goals, and recruit people, all based on those outcomes,” Blue added.
Interest Groups
Beyond those initiatives implemented by hotel brands themselves, there are hospitality-related interest groups and organizations that are working behind the scenes to ensure more representation of diverse groups, such as NABHOOD, a nonprofit with the mission of increasing the number of African Americans in ownership or leadership positions at hotels.
Before NABHOOD was established in 2001, there was one African American-owned hotel in the United States, according to Andy Ingraham, president, founder and CEO. Today, he said, there are about 2500 hotels owned and operated by African Americans.
“Our goal was simple: my board and I knew the potential of the industry, we knew that there was an underserved market that needed information and we knew the potential that capital was there; it just had to be directed in the right direction,” Ingraham said.
Ingraham said that they monitor the growth of African American travel, which represents over $127 million dollars. “We understood that, as the market continued to grow, there would be more opportunities to have a diverse ownership base because you had a diverse client base; it just made sense that in a diverse market, you’d have diverse ownership,” he said.
He added that he believes hotels are navigating to ensure that they are not doing anything that violates the law, but at the end of the day, a hotel company would welcome these partnerships with African American investors. “At the end of the day, when any hotel goes to look at a partnership, whether you are a minority or non-minority, they’re using the same yardstick to make sure they are continuing to increase and do business with people who are investing and buying in hotels.”
Ingraham added that the anti-DEI measures will not change the mission of his interest group in any way. “We’re in the hotel ownership and development business, and that is the way we are going to continue,” he noted, adding, “We haven’t violated any laws by wanting to become part of the American mainstream of hotel ownership, and I don’t suspect that is going to change any time in the future. At the end of the day, the opportunity in America to build wealth legally, and in our case in the hotel business, is a tremendous opportunity, and I think we’re going to continue along the trail.”
It remains to be seen the lengths to which the hospitality brands will go to adhere to its already-established in-house policies, or if they will start to dial them back. As Kong pointed out, DEI is pendulum that can and will swing in either direction, depending on the headwinds. At this point in time, thus far, the federal mandates do not seem to have deterred the majority of hospitality companies from maintaining robust DEI strategies, nor have they impacted efforts by the hotel industry to elevate representation, inclusivity, and equity within their own operations, though it is possible they will be less vocal about their efforts.