Q: How has the landscape for historically underrepresented groups changed over the last 20 years?
The changes have been tremendous. There used to be only a few women or minorities in the room at hotel conferences, but now there are many. Some barriers continue to exist, but institutional owners and brands appear to be focused on increasing diversity. Even in the last few years, there seem to be more potential women and minority owners.
In the past, the assumption was that the woman in the room was the designer. Today, women are in all parts of the industry.
Q: What is the most significant barrier to entry for underrepresented groups?
Conferences allow people within the hotel industry to network and share knowledge. One barrier to entry for Latinos is the cost of attending conferences. LHA attempts to provide the same or similar information at its conference so that education and brainstorming can occur among potential Latino hotel owners.
Other barriers to entry include:
- Lack of Awareness, Visibility & Knowledge - Because fewer Hispanic owners exist, there is a lack of exposure and visibility of hotel ownership as a viable new business track. Most Hispanics are unaware of hotel ownership franchise structures that provide planning, incentives and support. They may have other skills well-suited to hotel ownership but lack this critical knowledge.
- Lack of Capital – Latinos have the lowest rate of utilizing banks and financial institution loans to start their businesses compared with other racial and ethnic groups (12% compared with 17% of white-owned employer businesses) and are less likely than white-owned employer businesses to receive all the funding they apply for. Even once established, Latino-owned employer firms too often depend on vulnerable personal funding sources. Many may not know that there are incentives offered by hotel chains and associations.
- Feel Risk is too Great – If Latinos are using personal capital to create a business, they often seek out more familiar companies unless some assertion of security diminishes the risk. Education is critical because franchising can mitigate these risks through mentoring and guidance opportunities.
Culturally, the hotel industry is insular. People all know each other, which can be intimidating to newcomers. Breaking down barriers will come as people become more accessible to answer questions and field inquiries to expand the circle of lodging owners and open the door for others in the industry.
Q: What are some of the bright spots from the recent LHA conference?
Roundtable opportunities allow attendees to ask executives questions they might not usually ask. This helps individuals new to the industry understand the terminology and key metrics in a more comfortable setting. There needs to be more awareness and visibility about the industry. People need to consider that owning a hotel is a viable business track. The LHA conference helped address some of the existing barriers by allowing the space for Latinos to ask questions and do research. In the future, LHA is seeking more ways to provide these types of networking opportunities.
Q: Can you speak about financing potential hotel acquisitions? Are there particular sources of financing for women- and minority-owned businesses?
For smaller deals, there are U.S. Small Business Association loans. At CBRE, we work to help new owners understand the options. Financing is specific to hospitality. It is essential to work with specialists who can understand who the lenders are in the industry.
One goal is to help new investors feel less intimidated about asking questions; how to finance deals, how to work with brands on new franchise agreements, and options available for managing the properties.
Q: What are your primary objectives or areas of focus for 2023?
In 2023, LHA is working on additional webinars and events to help build knowledge and provide networking opportunities. One priority is to increase the focus on ownership of economy hotels where there might be lower barriers to entry. LHA aims to create more opportunities for conversations about potential deals to happen and for partnerships to form.
Q: How can people support LHA’s efforts?
People can help diversify the industry by providing time and sharing knowledge. The brands are working to diversify ownership, and LHA provides a pathway for brands to help Latinos understand the industry.
"The Latino community is growing, and we continue to grow and make up a healthy robust part of the U.S. economy. [The question is], what can we do to advance Latinos in hotel ownership, and what is our community willing to do?"
U.S. Latino GDP Compared to Entire Countries
Center for Economic Research & Forecasting: LDC U.S. Latino GDP Report
Source: International Monetary Fund, CLU-CERF
Center for Economic Research & Forecasting: LDC U.S. Latino GDP Report
Source: OECO, CLU-CERF
"This industry is creating generational wealth. But how do we continue to really push people through to that first one (hotel property) and then to the second one and give them the path (to hotel ownership)? We need to share as much knowledge as we can about what it takes to feel comfortable in that (hotel) space."
