RLJ Lodging Trust CEO Leslie Hale Needs You To Know She's Not A Unicorn
Leslie Hale’s professional history is nothing short of groundbreaking.
After leaving Harvard Business School, she climbed the ranks at GE Finance and Goldman Sachs, and in 2018, she took the reins at RLJ Lodging Trust, becoming the first-ever Black woman to become a real estate investment trust CEO.
But Hale wants boardrooms and executive suites to widen their gaze to the deep bench of women and people of color who are more than ready to join her in the C-suites of real estate companies across the country.
On Walker & Dunlop’s latest weekly webinar, CEO Willy Walker and Hale dove into the painful decisions at the helm of a hospitality REIT, how Hale’s time at Howard University forged her career in real estate and why the thorny "pipeline problem" myth needs to go.
Here are some highlights from the two CEOs’ conversation:
Willy Walker: So you left Southern California and you traveled across the United States to go to college at Howard. I read something where you said, "I was taking a finance class in college and fell in love." Did anyone point out to you at that time in the early 1990s that there weren't a ton of women, much less African American women, running around the halls of Goldman Sachs and GE Finance?
Leslie Hale: One of the great things about going to Howard University and going to any HBCU is that we were able to have those authentic conversations about being the only one — what it was going to be like when we transitioned into the workforce.
My mentality has always been that I'll bet on myself any day of the week and twice on Sundays and so the fact that I was heading into an industry that didn't have a lot of people that looked like me, it's not something that I let stop me.
Walker: Your background is impeccable. It's Howard University, Harvard Business School, GE finance and Goldman Sachs. People want to go find the Leslie Hales of this world and recruit them to their organization, yet they honestly don't know how to do that. What can you share as it relates to how to be better on these issues?
Hale: So there’s a lot packed into that question. I think first and foremost, it's really important to dispel this concept that I'm a unicorn. While I appreciate the uniqueness of my role and where I sit, there are plenty of people of color and women who have just as much skill as I do. I think it's important to dispel the concept that the pool for potential executives is limited, because if you believe that, then you allow your organization to accept a lack of diversity.
The most impactful thing to do is to add diverse leadership at the top because those individuals will be helpful in directly and indirectly driving diversity throughout the organization.
But I think oftentimes people say ‘I put someone in a leadership position and it didn't work.’ It's not enough to simply put diverse candidates in. It is important to ensure that they are successful. When I think about the things that allowed me to be successful and get to a leadership role, I had to have somebody provide me access to the opportunity and then provide me the support through mentorship and sponsorship throughout my career.
When I was at GE and Goldman Sachs, the vast majority of my mentors were actually white male. I point that out because it's important for diverse talent to understand that mentors and sponsors don't have to look like you, but it's equally as important for leaders to understand that you can impact somebody's career, no matter what point you touch it at.
Then, what's the environment that you are creating? Are you creating an environment where people can bring their whole self to work? Is the organization that you have a true meritocracy? Can your organization truly value diversity of thought and perspective?
When you have an environment like that you free up diverse talent to perform at extraordinary levels. That's what happened for me at RLJ. I didn't have to worry about being African American, I didn't have to worry about being a woman. I was able to focus on outcomes and my performance. I was rewarded and recognized in that environment.
I'm always amazed when people say, "I can't find diverse talent," because I don't really have a problem finding it. You need to look beyond your own network and you have to be willing to give somebody a shot who doesn't fit the box perfectly. Do they have, not perfect, but relevant experience? Do they have a proven track record of being able to parachute in and deliver on whatever opportunity is there?
Walker: You’ve said you're in the business of opening hotels, not shutting them down. How many hotels were shuttered during the crisis, and where are you, as it relates to opening those hotels back up?
Hale: We suspended operations at about 57 hotels, and today we have reopened about 20 of those hotels. As everyone else predicted, leisure demand was the first to come back. As individuals have gotten tired of being at home, they've gotten in the car and started driving, and now it’s summertime, so people are getting out more.
Walker: Has there been any cost savings out there to find? Or has everything just been inflated because the cost of cleaning and maintaining these assets has gone up?
Hale: When the demand began to fall, we were very focused on containing costs. And so we, like everyone else, cut staffing, which represents about 48% of our cost load. We also reduced and closed [food and beverage] outlets and other services.
I would say that on the cleaning side, while we are doing deeper cleans on the lobby area and deeper cleans between customers stays, there is no cleaning inside a guest room during a stay, in order to keep social distancing. The cost of going into the room every day is offset by the cost of cleaning the lobby more frequently. So we're seeing sort of a cost-neutral approach right now.
Walker: A lot of Senate Republicans are concerned that people are making more with unemployment benefits under the CARES Act than what they were making pre-crisis. Have you had any issues with bringing staff on or the price point at which you're bringing those people back on?
Hale: We’ve seen some scenarios where some staff that we originally called back have been hesitant to come back, but it was less around dollars in most cases — it was largely concerns about safety. Given the fact that hotels are typically not wanting that much occupancy, we had other staff within the pool that we could pull from to fill our staffing needs.
Walker: Do you think the heightened sense of cleanliness and familiarity with the product will tip the balance back toward established brands and away from competitors such as Airbnb?
Hale: This moment of time is a unique opportunity for the lodging industry to really demonstrate the power of the brands and really win back customers in a very big way around making them feel safe and having the brand represent a stamp of approval. There is going to be a segment of our customer base that does prefer hotels over renting somebody else's space. You're also going to see the inventory of Airbnb strain, because hosts are going to be less likely to want people to come into their home.
The leisure side is to be determined because I think the ability to rent an entire house, when you’re trying to isolate yourself, is probably attractive. But where Airbnb was trying to make inroads was with business travelers. That, I think, is going to be stunted significantly by COVID, which obviously bodes well for the broader lodging industry. I think it's an opportunity for us to gain share.
Walker: There's clearly plenty of distress happening in the hospitality space. You've not been shy of doing major acquisitions. Are you looking for opportunities right now?
Hale: Our general view is that the assets that first come out are probably going to be the less desirable assets. We think the assets that we would be interested in will not start to shake loose until sometime next year, as owners are either looking for liquidity, or they don't want to feed the asset anymore.
Walker: This has been an exceedingly challenging period for our world, our country, the economy and the lodging industry. What are you going to look back upon as a positive development or outcome from this crisis?
Hale: You can call me Pollyanna-ish, but I think the most positive thing that's going to come out of this crisis is that we as human beings will be more appreciative of our interactions. I think that we're going to place a lot more value on the ability to interact, whether it's at a conference, in the office or driving to see grandma. I think that's going to be a silver lining that will help change hearts and minds as we move forward.
Next Wednesday, Willy will host PNC Bank President and CEO Bill Demchak on the Walker Webcast. On the July 8 webcast, he’ll host Howard University President Wayne Frederick.
This feature was produced in collaboration between the Bisnow Branded Content Studio and Walker & Dunlop. Bisnow news staff was not involved in the production of this content.