The man behind Hilton's turnaround
Nearly every weekend, Chris Nassetta is cooking in his family's oversized kitchen, outfitted with two commercial-grade refrigerators, three sinks and a deep fryer.
These aren't small meals. Between his wife, six daughters, friends, neighbours and relatives, often 40 people are dining.
"I'm not a gourmet chef," Nassetta says. "I tend to cook what the kids beg for: my grandmother's old recipes of spicy red sauces, some sausage and ziti."
Most of the time, Nassetta is on the road. In his day job as chief executive of Hilton Hotels, he has about 732,000 guests a night to make happy.
When Nassetta took over in 2007, Hilton lagged behind other hoteliers. He had to restructure not only the operations but the culture. "People really didn't know where we were going," he says.
Nassetta focused on lucrative international markets – at the time, only 19 per cent of Hilton's new hotels were planned for overseas. He also franchised more hotels – a quick way to grow the company with minimal capital investment or risk.
Today, Hilton Worldwide is the largest hotelier in the world, by rooms, with 679,000. Of its planned hotels, 60 per cent are now outside the US.
Its initial public offering in December raised $US2.35 billion, surpassing Twitter's IPO the previous month. It was the second-largest IPO of the year and the biggest ever for a hotel.
Nassetta, 51, is as likely to greet you with a high five as a handshake. He gets animated about the gifts he's received from world leaders who welcomed Hilton into their country, like a zebra skin rug, swords and watches.
"I know I've got a dagger here," Nassetta says, rummaging through an office cabinet.
Hilton was once an innovator. The pina colada cocktail is said to have been invented in 1954 at the Caribe Hilton in Puerto Rico. Hilton pioneered the idea of an airport hotel in 1959 in San Francisco.
And highlighting its cultural importance, in 1975 the Muppet characters Statler and Waldorf were introduced, named after two Hilton properties in New York.
But by 2007, many of Hilton's rooms looked tired. Private equity firm Blackstone Group bought the company; Nassetta was brought in to turn it around.
Nassetta moved the headquarters from Beverly Hills, California, to the Virginia suburbs of Washington DC. There was a massive bloodletting: of the 600 headquarters employees, only 130 moved east.
"If you want to change a culture, you change 80 per cent of the people," he says. "We had lost touch with the front line."
So Nassetta and his senior executives started spending one week each year working at hotels – in housekeeping, engineering and the front desk.
"Their job is harder than your job," Nassetta says. "You get in there and you pay them the respect."
While some hotel companies, such as Marriott International, are launching new brands targeting younger travellers, Nassetta isn't convinced that's the best approach.
"I think all our hotels, in all brands, need to appeal to the millennial," he says. "Millennials grow up and their needs change. All of our brands need to be relevant to a broad array of customers."
Part of that is accepting what needs to go away.
Rolling suitcases have eliminated the need for bellmen and Nassetta questions if guests truly desire robes, slippers or nightly turndown service. Or at least are willing to pay the higher room rates they require.
"Do you get turndown service at home? If you do, let me know because I'd like to ask my family," Nassetta jokes.
He made headlines in 2013 with a decision to eliminate traditional room service in big-city hotels.
The labour costs involved with delivering food to rooms makes it a money-loser for the hotel. But guests aren't happy with often overpriced, mediocre food, either. So Hilton and other hotels are testing "grab-and-go" food outlets, particularly for breakfast.
"The customer gets a better price, better service and ultimately, in their minds, a better product," Nassetta says.
Then there is Wi-Fi. Most hotels – especially at the higher end – charge for it. Nassetta believes that in three to five years a basic level of internet access will be free across the industry, and hotels will charge only for faster service.
But don't expect free bottled water soon, unless you're an elite member of the loyalty program.
"Bottled water has a cost, has an environmental impact," Nassetta says. "I don't really want to encourage it. People pay for bottled water at their house, so I'm not sure why they can't pay for it at our hotels."
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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