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Industry Briefs

In 1996, the NAACP launched the Economic Reciprocity Initiative (ERI) to measure corporate America’s financial relationship with the African-American community. As part of the ERI, the NAACP reviewed various industries, including the hotel and lodging industry. The initial 1996 results from the hotel and lodging industry indicated very little return on African-American consumers’ investment dollars. The overall grade for the lodging industry was a D−. Almost ten years later, following another NAACP review (2005), the overall grade for the lodging industry was a C+. In the 2005 NAACP review, the hotel and lodging industry did best in charitable giving, receiving a B+. In terms of employment, the industry got a C+, with a D+ in supplier diversity (vendor relationships) and a D in property ownership.

In 2011, the NAACP relaunched its diversity and inclusion studies with the Hotel and Lodging Opportunity and Diversity Report Card. This report card focused on the top five corporations in the industry and did not include categories such as charitable giving and advertising. The Opportunity and Diversity Report Card focused on workforce, leadership, supplier, and ownership diversity.

Comparing the 2005 top 12 hotel and lodging corporations to the industry-wide data of the 2011 report, we see continued weakness in diversity and inclusion of African-Americans in the hotel and lodging industry.

Historical data suggest that in some cases the industry is moving in the wrong direction in terms of diversity and inclusion. According to data from the EEOC,18 the federal agency that collects data on staff diversity for U.S. employers, minorities are losing ground in the upper ranks of the hotel industry. The EEOC reported that, in 2007, 29% of top management positions were held by people of color. By 2015, that figure had fallen to just 19%. The share of these positions held by an African-American fell by 50% over the same period.

Approximately 89% of African-Americans, 90% of Hispanics, and 86% of Asians in the hotel workforce of 2007 were considered unskilled or semi-skilled, compared with just 75% of white staff. By 2015, these figures had not changed. From 2007 to 2015 about 15% of white workers occupied middle-management positions in the industry, with just 5% of minority staff rising to this level.

As this report card indicates, the NAACP continues to work to advance diversity and inclusion. Consistent with the NAACP’s historic corporate engagement efforts, in July 2018 we launched an exchange-traded fund, the NAACP ETF (NYSE: NACP). This new effort reflects an innovative approach to harness the power of capital markets to incent social change. Building upon our rich history of social advocacy, the NAACP ETF represents an evolution of our corporate report card strategy by applying it to companies listed on the S&P 500. Partnerships with Impact Shares, a nonprofit fund manager; Morningstar, an industry- leading index fund provider; and Sustainalytics, our ESG research provider makes the NACP ETF, and Morningstar’s Minority Empowerment Index, the first of its kind socially focused ETF. The NAACP ETF would not be possible without the long track record of corporate engagement reflected by the NAACP report card.

This report card was compiled from EEOC data and the responses to a survey instrument developed by the NAACP to assess the diversity and inclusion commitment of the hotel industry as a whole and the specific hotel companies individually.

The survey asked a variety of questions about workforce and supplier diversity, the commitment of the respondent to diversity, and the company’s efforts to encourage and retain diverse talent.

Grades are issued for board and workforce diversity; transitions such as promotions, new hires, and turnover; as well as procurement. The NAACP has set grades to reflect improvements in diversity levels given the African American and minority share of the workforce as a whole.

The respondents were asked to provide information on their U.S.–based workforce and procurement spending for 2017. Historical industry data was also pulled from the EEOC website.

Responses were first calculated as raw percentages for both African Americans and people of color. Those percentages were assigned a letter grade based on a scale determined by the NAACP. In general, a C grade could be achieved if the score matched the size of the minority population in the U.S. workforce or across the rest of the industry, if such data was available.

Once a letter grade was determined for each category, points were awarded based on a four-point scale. The point scores for African Americans and people of color were then averaged, weighted, and summed. Weights were determined by the importance of each section as defined by the NAACP.

Please see the appendix of this report for a full methodology. The report cards are divided into several section, which are described below.

For the purposes of this survey, non-Hispanic white as well as any responses that did not indicate a race or ethnicity are considered “white.” In some cases, the respondents have refused to disclose or do not collect data. In those circumstances, we indicate this in the grades and treat that response as a zero.

Here are report cards on four of the Lodging Industry’s major hotel companies – Hilton, Hyatt, Marriott and Wyndham.

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