In hospitality, people are the product. Yet when it comes to planning for future leaders, the industry often drops the ball. According to research, 60% of companies lack any CEO succession plan, and only 14% believe they are doing it effectively. That is not just a talent issue but a strategic risk that can impact guest satisfaction, brand integrity, and operational stability.Succession planning is more than a contingency plan. It is a long-term investment that should be embedded into a company’s strategic DNA. Unfortunately, many hotel operators, especially those in family-owned and founder-led organizations, delay addressing it until a departure or crisis forces them to act. This reactive approach invites disruption. A proactive strategy, on the other hand, builds continuity, resilience, and sustained value.
It is time for hospitality leaders to treat succession as a future-focused investment in organizational health, not just a fallback.
The Hidden Costs of Poor Planning
Succession gaps ripple through every layer of an organization. Poorly planned leadership transitions can increase turnover and knowledge loss, while decreasing morale. These effects often translate into lower service quality and eroded guest experience.For example, Cornell research has shown that the average cost of replacing a hotel employee can be nearly $10,000 when accounting for recruiting, training, and lost productivity. With leadership roles, those costs rise exponentially.
Family-owned hotels are especially vulnerable to the negative consequences of poor succession planning. Studies suggest that two-thirds of such properties will undergo ownership changes in the coming years, yet most still lack structured transition plans. In many cases, succession becomes an emotionally charged issue rather than a strategic priority.
What is at stake is not just continuity. It is the long-term viability and legacy of the brand.
From Backfill to Bench Strength: Rethinking Readiness
Too often, succession planning is reduced to identifying a second-in-command and filing away a backup plan. But real readiness is about cultivating a deep bench of future leaders.Companies with strong leadership pipelines tend to outperform their peers. According to a 2019 study, strategic bench-building correlates with improved financial performance and operational agility.
A proactive approach involves structured development paths, rotational assignments, and performance milestones spanning multiple leadership levels.
One example of this approach could be a mid-sized boutique hotel group implementing a program to rotate assistant general managers through finance, food and beverage, and guest operations. Internal promotion rates increased by 40% within two years, and overall management retention improved. This illustrates how bench building supports both operational resilience and employee engagement.
What High Potential Really Looks Like
Identifying future leaders goes beyond job titles and tenure. True high-potential talent often shows up in adaptability, emotional intelligence, and strategic thinking.In hospitality, cultural fit is just as important as technical skill. Future leaders must embody the brand's values while also pushing it forward. Organizations that broaden how they define leadership potential are more likely to foster diverse and innovative teams.
Key indicators of high potential include initiative, curiosity, comfort with ambiguity, and the ability to influence others. Those who seek feedback, demonstrate cross-functional thinking, and stay calm under pressure often emerge as natural leaders. Succession planning should focus on these qualities, not just resumes.
Five-Year Vision, Not Five-Week Reaction
Succession planning is not a scramble; it is a strategic roadmap. The most successful organizations take a five-year view, mapping leadership development across multiple levels.This includes structured coaching, formal assessments, and staged career milestones. Organizations that prioritize long-term leadership development are 1.5 times more likely to outperform their peers financially.
Leadership readiness is not about predicting the future but preparing for it.
What a Leadership Development Roadmap Should Include
A practical roadmap aligns talent development with business strategy. It typically begins by identifying high-potential individuals early and assigning them clear developmental goals. An example strategy could be:- Year 1: Identify future leaders, initiate mentorships, and begin performance tracking.
- Years 2–3: Introduce cross-functional projects and leadership training.
- Year 4: Assign interim leadership roles and provide executive coaching.
- Year 5: Prepare successors for promotion and create transition timelines.
Succession at Every Level, Not Just the Top
Succession planning must go beyond the CEO's office. In hospitality, the departure of a department head, general manager, or director of operations can create operational stress if no successor is ready.Developing a bench across key functional areas ensures continuity in service, reduces stress on remaining staff, and protects brand consistency. For example, identifying future leaders in finance, HR, marketing, and guest services should be part of a comprehensive strategy.
A strong pipeline at every level enhances agility and responsiveness during transitions.
When to Look Outside: The Role of Executive Search Partners
There are moments in a company’s lifecycle when looking outside becomes not only helpful but necessary. This often happens during inflection points — rapid growth, a generational shift in ownership, a pivot in strategy — when the leadership needs of tomorrow no longer match the internal bench of today.Executive search partners bring objectivity, discretion, and access to talent pools beyond a company’s immediate network. They also offer critical market data and benchmarking. This information helps boards and owners understand how their internal talent stacks up against external standards, what competitive compensation looks like, and where the bar is truly set in the broader industry.
In these moments, the best search firms act as strategic extensions of the company itself, aligning long-term vision with market reality and helping organizations make bold, well-informed choices about the future.
Lessons From the Inside: A Future CEO’s Perspective
Having been part of a deliberate succession plan myself, I’ve seen firsthand how much intention it takes to prepare an internal candidate for a CEO role — and how much clarity it brings when done well. For those being positioned for leadership, the path isn’t always linear. Readiness isn’t just about results — it’s about exposure, sponsorship, and the opportunity to contribute beyond your current title.Future CEOs need development, yes — but they also need opportunities to step outside their functional swim lanes, to influence beyond their immediate sphere, and to be part of strategic conversations long before any formal transition begins.
From the inside, the clearest lesson is this: succession planning isn’t a moment. It’s a process, one that requires intentional sponsorship, exposure to the board, and alignment on what the company will need five years from now, not just today.
From the inside, the clearest lesson is this: succession planning isn’t a moment. It’s a process, one that requires intentional sponsorship, exposure to the board, and alignment on what the company will need five years from now, not just today.
Resilient Leadership for a Resilient Brand
Behind every exceptional guest experience is a solid leadership structure. When that structure is left to chance, the entire organization is vulnerable.Succession planning is not just a human resources function. It is a business imperative. Companies that invest in leadership continuity are better equipped to navigate change, retain talent, and preserve brand identity.
Future-proofing begins with people. And the time to start is now.
Republished from the Hotel Business Review with permission from www.HotelExecutive.com
About Alice Sherman
Looks like Court planned his successor very well, Alice. Congratulations!