The turnover of CEOs amongst the world’s 50 largest hotel companies doubled in 2011, compared with 2009, with 12% of companies now being led by a new chief executive.

However, the choice of CEOs is becoming more conservative in the sector, with internal promotions more common, or appointments from within the hotel industry.

These were the key findings of a study by HVS Executive Search, co-authored by Chris Mumford and Thomas Mielke.

Story continues below
Advertisement

This biennial CEO monitor tracks succession rate, as well as the profiles and demographics of outgoing and incoming CEOs. The largest company in the top 50* is InterContinental
Hotels Group (with 4437 properties), while MGM Resorts International is the smallest (with 17
properties).

The previous HVS study showed an average of five companies in the top 50 changed their CEO each year.

The onset of the economic downturn in 2008 saw this rate spike to seven changes, then drop to
just three in 2009 as boards opted for stability. A further rise in 2011 demonstrates that as companies become increasingly stable and see the beginnings of economic improvement they are prepared tomake major business changes such as appointing a new CEO.

“During the early days of the global economic meltdown we certainly witnessed shareholders and
boards electing to either stick by their management teams and support them out of recession, or to make a quick change and recruit a CEO suitable for the tough times ahead,” commented Chris
Mumford, HVS Executive Search, President – Europe, Middle East & Africa.

“Increased CEO turnover over the past two years could be also attributed to boards starting to lose patience with the executive leadership at those companies where the impact of the financial crisis is still being felt and recovery is taking longer than forecast.

“As we look ahead to the next two years we anticipate that changes will largely be driven by economic conditions; a company with financial stability and an aggressive growth strategy requires a different leadership skill set to one in survival mode,” he added.

Article continues on next page...