Jim Evans, former CEO of Brand USA, has stepped down after one year on the job. The decision comes one week after six senators sent a letter to the Corporation for Travel Promotion with concerns over lavish spending, asking Brand USA to submit documents detailing their progress and spending.
Brand USA has begun searching for Evans’ replacement, according to a news release. The organization's vice chair, Caroline Beteta, was named interim CEO, effective immediately. Beteta, the CEO of Visit California, also is in line to succeed Stephen Cloobeck as board chair and CEO of Brand USA.
A spokeswoman for Brand USA said conversations between Evans and the Brand USA board pre-date the Senators' letter. "The two events are completely separate," she said.
The agreement with Evans “was reached in consultation with the board, and comes as the organization pivots from a start-up endeavor to securing its place as the nation's destination marketing organization,” according to the release.
"As I reflect on the accomplishments of the last year, I am gratified in how much progress we have made," Evans said in the release. "I know I leave Brand USA with a great foundation and a strong team that will take the organization forward."
Evans was formerly senior VP for marketing at Hyatt Hotels & Resorts and CEO of Best Western. He became Brand USA’s first CEO.
In the letter, the senators—all Republican—said they are ensuring that Brand USA’s administrative and financial matters are fully transparent.
“It is our understanding that the corporation awarded a media consultant, JWT of New York City, an initial 90-day contract. According to a recent GAO report, the corporation negotiated a subsequent master service agreement with JWT without first going through the bidding process,” the letter reads.
The senators also noted Brand USA’s first annual report was due 15 May and has yet to be released.
UPDATE: Brand USA responded to six senators who said they are concerned about the organization’s progress and spending, and a spokeswoman said the recent resignation of CEO was unrelated to the request. See "Brand USA, Congress work toward transparency"
The recovery might be spotty, but hotel owners generally walked away from 2011 with extra profits in their pockets, writes HotelNewsNow.com’s Patrick Mayock.
According to STR’s recently released 2012 HOST Study, the 3,593 limited-service hotels sampled in the United States reported gross operating profit of 48.8% during 2011—an increase from 48% during 2010. These properties generated $45.28 in GOP per occupied room night and $11,517 per available room. STR is the parent company of HotelNewsNow.com.
The 2,574 full-service hotels sampled in the study reported similar gains, with GOP up from 29.9% in 2010 to 31.5% in 2011. In 2011, GOP was approximately $18,633 per available room and $75.54 per occupied roomnight.
Increases in profitability primarily were driven by gains in revenue as opposed to cuts in expenses, sources said.
“It was all about the increased revenues from increased occupancies,” said Joe Smith, executive VP of Greenbelt, Maryland-based Chesapeake Hospitality, which manages 44 hotels across the U.S.
“No question: driving rate,” said Robert Habeeb when asked which area was the biggest contributor of revenue for First Hospitality Group’s 47 properties in the U.S.
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, according to a recent report by HVS Executive Search.
However, the choice of CEOs is becoming more conservative in the sector, with internal promotions more common or appointments from within the hotel industry.
A previous HVS Executive Search 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 to make 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,” said Chris Mumford, president of Europe, Middle East & Africa for HVS Executive Search. “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.”
Customer satisfaction with hotels is stable at 77, which is much higher than airlines but lower than the restaurant category in 2012, according to a report released this week by the American Customer Satisfaction Index.
Business travelers are less satisfied with their chosen hotels than vacationers (ACSI score of 72 compared with 77), which mimics results for the airline industry. There is little movement among the top hotel brands. Among eight major chains, five show ACSI changes of 1% or less compared to 2011.
Hilton Worldwide retains the industry lead with an unchanged ACSI score of 80, followed by Marriott International at 78. InterContinental Hotels Group ties the aggregate of smaller chains and individual hotels at 77. A trio of companies is deadlocked at 76: Hyatt Hotels and Resorts, Best Western International and an improved Choice Hotels International (+3%). Starwood Hotels & Resorts Worldwide drops back to 75 after a 5% loss, while Wyndham Worldwide Corporation trails the field at 70 (-4%).
Three more Hyatt House properties—Hyatt Hotels Corporation’s newest extended-stayproduct—have hit the market. HHM, formerly known as Hersha Hospitality Management, announced this week the completion of renovations at three Hyatt House properties.
The three hotels were former Hyatt Summerfield Suites and part of Hyatt’s plan to transition that entire brand to Hyatt House, a more “homey and sociable” brand.
Compiled by Jason Q. Freed.