A wave of CEO departures swept across the entire travel industry this year. But new names in the top office don't always translate to major changes in how some of these companies will operate going forward.
The churn was on this year for the top job at many travel companies.
Major airlines like Southwest and American, hotel companies like Marriott and Best Western, online travel agencies, and even Amtrak and Royal Caribbean all ushered in or made plans for new CEOs over the span of the year. Some were unexpected leadership shifts while others were years in the making.
The middle of a pandemic might seem like a questionable time for these 11 travel companies to pursue a leadership change. However, something as cataclysmic to the industry as the pandemic would understandably leave many to reassess their careers — as the Great Resignation has proven.
“The demands of the CEO have never been greater. If I was a CEO of a big travel or hospitality business, and I’ve been thinking about whether I want to do something different or when’s a good time to go, maybe people that are having those thoughts brought them forward,” said Ian Brooks, a partner and co-founder of Gail Kenny Executive Recruitment. “I certainly know of one or two CEOs who decided to call their retirement or their change in career move earlier.”
But this isn’t necessarily a case of travel CEOs jumping ship, either. Several of the CEO shifts were a long time coming or were announced after the recovery appeared to be gaining momentum.
“A lot of CEOs have wanted to see their companies through this period. That’s been clear. This is really where leadership comes to the fore,” Brooks said. “At the same time, some of those people by this summer may have got to a stage where it looked like the pandemic was sort of starting to disappear, business was coming back, people were traveling again, and hotels were starting to fill up.”
“Some people have probably said, ‘Actually, I feel I’ve done my job. I’ve seen this company through, so I feel happy about going.’ Of course, now here we go again [with another variant], which makes it harder in terms of that motivational piece.”
Weathering Another Storm — and More Growth
Deciding to stay in power can be a question of whether current leadership wants to undergo another growth cycle at their respective company as well as the greater travel industry.
While the pandemic was an unprecedented downturn, the recovery momentum has been — all variants and uncertainty considered — swift relative to prior crises like the Sept. 11 terrorist attacks or the Great Recession.
“The rebound pre-Omicron was significant. We’re going to see businesses quickly try to reset, but it requires a commitment from management teams [and] commitment from boards to, in many cases, go on a multi-year journey,” said Robert DeVries, who heads the global hospitality and leisure practice at the leadership advisory and executive search firm Spencer Stuart. “I think some CEOs look at that and say, ‘Do I want to sign up for this next phase of growth? Or is this a logical time for me to quietly discuss with my board succession plans that many of them already have in place.'”
Leadership changes present an opportunity for companies to pursue a new direction or operational structure.
Hotel companies are in pursuit of new types of customers and developing newer types of hotels catering to surrounding neighbors. Airlines are exploring new partners and route networks. All travel sectors are grappling with staffing shortages.
“Shareholders may be saying they want different skills now and need to transform their business,” Brooks said. “A lot of businesses used the time of the pandemic to invest in digital transformation and change their business model.”
While these new CEOs all come from within the travel sector, don’t rule out future leadership changes inspiring boards of directors to look outside their traditional talent pool.
The more travel companies rely on technology to maximize output and accommodate pressing issues like labor shortages means boards could reasonably start looking for their next CEO to come from a related industry and who has experience with technology transformation.
“There are a number of our clients that are very open and want to at least engage in a discussion about what other types of backgrounds or profiles or experiences could be relevant for their companies going forward,” DeVries said. “It would not surprise me if, in the next couple of years, we see several CEO appointments from some adjacent industries but with track records of reinventing and reimagining businesses and business models.”
New Factors a Board *Should* Consider
As the two-year mark of the pandemic approaches, each of these new CEOs now oversees steering their respective companies through more uncertainty on the way to what the travel sector hopes will be a complete recovery and potentially new way of doing business.
But don’t rule out the possibility of even further chief executive turnover in the new year and beyond. More players in the industry are suddenly beholden to new capital sources thanks to the boom of going public through special purpose acquisition companies, or SPACs.
“There has been this unprecedented level of disruption and change in our industry, and that’s been certainly a function of Covid in the global pandemic,” DeVries said. “But it’s also been impacted in some cases by new capital sources. SPACs have all of a sudden made the public markets more available to certain companies. So, that’s accelerated and stimulated change.”
There is also the long-overdue push for diversity, equity, and inclusion in the C-suite. There was almost no gender or ethnic diversity in the latest wave of travel CEO turnover, but that kind of status quo is unlikely to hold for long.
“The focus on social issues accelerated the need for ethnic and gender diversity — not only on boards but also in the C-suite — and you get this significant level of change and dislocation in talent,” DeVries said. “Over the last nine months to a year, it’s an opportunity for boards and for owners and CEOs to evaluate how [they] reimagine [their] future in a post-pandemic environment.”
He also recognizes there’s work to be done. Standard International CEO Amber Asher was the only female appointment to the top job of the 11 major travel companies mentioned below. Ethnic diversity and representation is also severely limited at the top executive level.
“There’s no question we’re starting to make some really necessary progress on boards of directors,” DeVries added. “And we still have, I would say, significant work to do as it relates to C-suite appointments in our industry.”
Marriott International faced a heartbreaking start to 2021 with the passing of Arne Sorenson, who had been with the company since 1996 and was named CEO in 2012. Condolences from the entire travel industry poured in for the legendary hotel leader. Sorenson’s nearly two-year battle with pancreatic cancer led him to reduce his work schedule shortly before his death, and that set up his eventual successor.
Anthony Capuano, who had been Marriott’s group president of global development and design and operations services, was named CEO a week later. Marriott’s new CEO has been with the company since 1995 and is only the second person outside the Marriott family to hold the company’s top job. The Capuano pick signaled Marriott’s board was after a leader who knew the ins and outs of the entire hotel industry but also had a knack for growth in new sectors.
Capuano was a leader in the company’s push into all-inclusive resorts, which took off prior to his ascent to CEO. He also rallied around the idea “bleisure,” or blended business and leisure travel, would be an important piece of Marriott’s recovery. The ideas appear to be working, as Marriott has posted the strongest profits of any major hotel company during the pandemic.
Marriott does have to consider competitors beyond the traditional hotel sector like Airbnb and Vrbo. That’s likely why the company also named Stephanie Linnartz the new president of Marriott the same day Capuano was named CEO. Linnartz, who previously served as group president of consumer operations, technology, and emerging businesses, is a leader in growing the company’s Homes & Villas short-term rental platform.
BWH Hotel Group
Not every company looked to their development teams when picking a new CEO. BWH Hotel Group, parent company of brands like Best Western, went with its general counsel, Larry Cuculic, after long-time CEO David Kong — who held the job since 2004 — announced his retirement earlier this year.
A legal background before heading to the C-suite isn’t an anomaly in the hotel industry, as Sorenson first represented Marriott during its spinoff of its Host real estate division while working at a D.C. law firm. He went in-house at Marriott initially as a general counsel.
Cuculic attributed his legal career, U.S. Army service — which included times as military judge — and 12-year tenure with BWH as assets for his new role.
“I was taught to develop the skill of being thoughtful, analytical, and strategic with regard to analyzing facts and determining the best outcome and being able to deliver results based upon that outcome that you’re driving towards,” he said in an interview with Skift earlier this month. “Having served in the military over a 20-year career, I was able to learn how to be under pressure, make thoughtful decisions, … and recognizing that any decision you make impacts people, which is really important because the hospitality industry is about people and caring for people.”
While Capuano’s appointment at Marriott is expected to incorporate a push into newer growth opportunities, Cuculic is likely one to stay the course. BWH is expected to focus on adding hotels to its existing slate of brands and maintain its current non-profit operational structure, something Kong tried to shake up during his own time in the top job.
Another lawyer-turned-CEO moment happened at Standard International, which appointed Amber Asher as its new chief executive following Amar Lalvani. Asher’s appointment was notable across the industry, as the hotel sector doesn’t have many female chief executives.
Women were reported to be finalists in the CEO searches at Marriott and BWH Hotel Group, but neither company chose a woman for the top job.
Asher comes into a company facing major steps forward in international growth as well as some setback. Standard announced plans this year for two new properties in Thailand as well as a hotel in Ibiza, Spain. It was the launch of a 10-hotel international expansion that will see the brand extend to markets like Singapore, Melbourne, Lisbon, Dublin, Brussels, and Las Vegas.
Standard-branded residential projects are also on the horizon, with a new development announced recently for Miami.
But the company also hit some bumps in the road, as Standard’s flagship property in New York City on the High Line — owned by Gaw Capital Partners — faced foreclosure this month. The Standard Downtown LA, owned by Ferrado LA LLC, in Los Angeles is slated to close next month.
Radisson Hotel Group Americas
Radisson Hotel Group Americas CEO Jim Alderman left his position earlier this month to pursue new opportunities, per the company which declined an interview request. Radisson appointed Tom Buoy — the company’s chief commercial officer — as interim CEO while it looks for a replacement.
Alderman was the first CEO for the standalone entity after the U.S. government forced it to spin out from Radisson Hotel Group, which is owned by Chinese state-owned firm Jin Jiang International. The job was a tall order even before the government got involved.
Radisson, especially in North America, has struggled for relevance as competitors like Marriott International, Choice Hotels, and Wyndham all vie for new franchise deals. A company like Radisson, which primarily resonates in the U.S. with its namesake as well as the Country Inn & Suites brand flags, isn’t as appealing for a hotel owner due to a relatively limited domestic footprint.
“Every brand and every brand family’s biggest nightmare is having a frequent traveler who is loyal to their brand going to a location where they don’t have a product to offer,” LW Hospitality Advisors CEO Dan Lesser told Skift earlier this month. “That’s why we’ve seen this explosion of American brands going oversees and foreign brands coming here because, again, that nightmare scenario is you get that frequent traveler who tries somebody else’s product and likes it.”
The problem is Radisson isn’t winning in the growth category, especially conversion deals where owners of an existing hotel switch brand affiliation. Only 14 hotels in the U.S. were in the process of converting to a Radisson brand at the end of the third quarter, according to Lodging Econometrics. There were 93 conversions in the process at Choice Hotels and 181 at Wyndham.
Ben Minicucci replaced Brad Tilden as CEO of Alaska Airlines in March 2021.
The transition was long planned; Minicucci was named president of Alaska under Tilden in 2016 and oversaw the integration of Virgin America. Minicucci was also CEO of Virgin America during the integration.
Little has changed since the handover, with Minicucci continuing with many of the initiatives begun under Tilden. These include Alaska joining the Oneworld alliance and expanding its global reach through new partnerships; implementing its new West Coast partnership with American Airlines; and accelerating its fleet transition with orders for dozens of Boeing 737 Maxes.
The biggest, yet least surprising, airline CEO change is Robert Isom’s rise to the helm of American Airlines.
Isom, president of the Fort Worth, Texas-based carrier since 2016, replaces Doug Parker when the latter retires as CEO in March 2022. Parker leaves a changed American — and U.S. airline industry — after leading a major U.S. airline since September 2001. He championed consolidation and created the template for mergers to come with his America West-US Airways deal in 2005. The feather in his cap was the merger of American and US Airways in 2013, which created what remains the world’s largest airline.
Isom has been part of Parker’s inner circle and management team since 2007. He brings a strong operational background to the helm of American, having worked as the chief operating officer of first US Airways and then American for nine years. Isom is expected to stay the course with many of Parker’s initiatives at the carrier. He touted American’s network initiatives and partnerships, including its controversial tie up with JetBlue, when asked about his plans. Wall Street analysts have similarly said they expect few strategic changes at American.
This is not to say Isom does not face challenges. American has faced operational issues ramping up flights during the pandemic — some that that analysts say Isom is well suited to address. In addition, the carrier’s relationship with its pilots is sour at best, and staffing remains a challenge.
Southwest Airlines surprised many when it named Robert Jordan, its executive vice president of corporate services, as its next CEO — the sixth in its 50-year history — to replace Gary Kelly in February 2022. Kelly did not have an heir apparent at the Dallas-based carrier, meaning it was anyone’s guess who would succeed him when he ultimately retired.
Jordan inherits Southwest at a unique time: The airline did what it does best by growing during the crisis — it added 18 new destinations to its map — but also faced some of the first significant staffing challenges, especially with entry level positions, in its history.
But the Southwest that Jordan inherits is not the same airline that Kelly took over in 2004. During his 18-year tenure, Southwest more than doubled in size, in part by acquiring AirTran in 2010. The airline added its first international markets and, in recent years, began selling tickets through major global distribution systems in an effort to capture a larger share of the corporate travel market. Jordan is expected to build on these initiatives.
Stephen Gardener will become Amtrak’s third CEO in as many years when he takes over the national passenger railroad in January.
He replaces Bill Flynn, who retires after less than two years on the job.
Gardener brings both railroad and Congressional experience to the job at a pivotal point for Amtrak. The railroad received its largest federal investment ever under President Biden’s infrastructure bill.
Gardener will be charged with implementing the measure, which he has warned will take at least 18 months — or until 2023. This includes making much-needed upgrades to Amtrak’s key Northeast Corridor route as well as expanding the railroad into new markets around the country.
Tripadvisor co-founder and CEO Steve Kaufer, who has led the company for 21 years, announced in early November that he would be stepping down and leaving the company when a search is complete to find his successor.
In a prepared statement at the time, Kaufer said Tripadvisor is in a “strong position” as the pandemic winds down.
“I believe now is the best time to announce my plans to step away from the company next year,” he said. “I have such respect and appreciation for all the teams over the years who have made this company what it is today, and remain devoted to continuing to guide the Tripadvisor family as CEO until the transition is complete.”
Kaufer, feeling that a change of leadership was needed, said subsequently that he’d been considering the move for a while and that it didn’t arise from the board.
Others pointed out that the announcement occurred just weeks after Tripadvisor turned the Tripadvisor Plus business model on its head after running into fierce opposition concerning rate parity issues from big hotel chains. Tripadvisor had big plans — and says it still does — for the subscription program, which is changing its focus from up-front discounts on hotels and activities to cash back at the time of the stay or tour.
In addition, Tripadvisor, which is among the largest travel websites in the world in terms of traffic, has struggled over the years to find its footing, which could arguably be another factor in Kaufer’s departure.
Aviasales, the Russian travel metasearch business, appointed Anton Baitsur as its new CEO in October, replacing Max Kraynov, who held that post for a decade. Kraynov transitioned to become board chairman.
The company credited Kraynov as building Aviasales into a major player with 17 percent market share in Russia. Aviasales viewed the change as part of the company’s evolution, which included raising $43 million in funding a couple of months earlier. Baitsur had been chief operating officer, among several executive roles at the company, over the previous six years.
Royal Caribbean Group
Richard Fain, 74, is slated to retire early next month after having led the Royal Caribbean Group for 33 years. Fain enjoyed one of the longest tenures of any public company CEO in the travel sector’s history.
Fain took a bigger-is-better approach at the cruise operator, whose brands also include Celebrity and Silversea. In 2009, Royal Caribbean rolled out Oasis-class megaships, and it is currently debuting Wonder of the Seas.
Today Royal Caribbean Group has about 60 ships and a market capitalization hovering around $19 billion. Fain has credited these milestones to building a company culture of continuous innovation. The group’s innovations often set the industry pace, such as with the introduction of rock-climbing walls and amenity-filled private islands.
Royal Caribbean’s culture of persistence also helped the group steer through crises such as 9/11, the Great Recession, and the ongoing pandemic. Perhaps the darkest of those moments came in October 2020 when the company said its third-quarter revenue was negative $34 million — a previously unimaginable number. Fortunately, Royal Caribbean said it is receiving strong bookings for the latter half of 2022 and beyond.
Fain’s departure comes as the company faces ongoing hurdles in the recovery of cruise tourism and attempts to steer through the most difficult time in the sector’s history. Just over a month following this news, Royal Caribbean’s Odyssey of the Seas reported one of the most alarming onboard Covid outbreaks since the start of the pandemic, to the tune of 48 cases, following a Caribbean voyage that ended in the port of Miami.
The Omicron variant is also threatening to further dampen revenue on what was to be a promising rebound in 2022.
But there isn’t likely to be a major shift in Royal Caribbean’s business approach. Chief financial officer Jason Liberty, who joined Royal Caribbean in 2005, will be the next leader of the major cruise line as well as a member of the board of directors. Fain will remain as chair of the board of directors.
Skift’s founding editor Dennis Schaal, senior travel tech editor Sean O’Neill, global tourism reporter Lebawit Lily Girma, and airlines reporter Edward Russell contributed to this story.
Tags: alaska airlines, american airlines, amtrak, aviasales, ceos, marriott, radisson, royal caribbean, southwest airlines, standard international, tripadvisor