After decades of underrepresentation in hotel industry ownership, African Americans are finally beginning to get a foothold in the business.
However, among the more than 80,000 hotels and inns throughout the U.S., there are only some 50 mainstream properties with African American principal owners. Historically, the large capital outlays necessary to own a hotel have limited African American participation in this industry. According to Andy Ingraham, president of the National Association of Black Hotel Owners, Operators and Developers (NABHOOD, www.nabhood.org), construction costs for a new hotel can range from $40,000 to $200,000 per room.
Change could come — albeit slowly. In the aftermath of the NAACP boycott of Miami Beach in the early ’90s, triggered by local politicians snubbing South African leader Nelson Mandela during his first U.S. tour after his release from prison, there has been a push to diversify hotel ownership by brand companies. The boycott prompted the city to extend R. Donahue Peebles a $10 million loan to develop the first African American resort convention. One diversification push comes from Choice Hotels International Inc., which franchises hotels under the Comfort Inn, Quality, Clarion, Sleep Inn, Rodeway Inn, Econo Lodge, and MainStay Suites brands. The company unveiled a new incentive plan, offering grants of $750 to $1,500 per room to minority entrepreneurs who want to build a Choice-brand hotel, purchase an existing Choice-brand hotel, or convert an existing hotel to a Choice brand with the allowance payable (balance due) upon the official opening of the hotel.
NABHOOD has been working with the hospitality industry to attract small investor groups to the hotel industry. “We are working to put together prototype programs where a small group of investors could build a hotel for $2 to $4 million,” says Ingraham. “Many of the guys who now own some of the larger properties started out with smaller projects. [Donnell Thompson, CEO of Thompson Hospitality] and Don Peebles both started out with smaller properties.”
But there’s still a long way to go. According to Ingraham, black workers hold between 40% and 45% of entry-level jobs in the hospitality industry, yet there are fewer than 60 black executives in the country’s 30,000 full-service hotels. George Shanklin, who owns some 31 properties, has been working with historically black colleges to implement programs to train prospective hotel managers and other such executives. He is currently working on constructing a hotel near Langston University in Tulsa, Oklahoma. “The facilities can be on or near campuses, and they are a good tool to train students in all aspects of the hospitality industry,” he says.
But as black hotel ownership increases, one of the challenges is how to steer the African American community — particularly the business community — toward these establishments. The NAACP is working with NABHOOD to get the word out about the increase in black-owned hotels and to make the hotel industry more responsible to African American consumers. They’re also working closely with the National Coalition of Black Meeting Planners to ensure that the big African American conventions, which can draw as