Speakers: Chris Nassetta, President and CEO, Hilton
In this session, Chris Nassetta, President and CEO of Hilton shares his belief that hospitality is a business of people serving people places Team Members and workplace culture at the center of Hilton’s business strategy. During Chris’ tenure, Hilton has added 86% more rooms globally and earned more than 100 Great Place To Work® recognitions, including the #1 spot in consecutive years for Fortune's 100 Best Companies to Work For® in the U.S. Hilton recently marked its 100th anniversary, celebrating its transformative global impact and the more than 10 million Team Members who made the milestone possible.
Show Transcript
Julian Lute:
Now our next leader does not fear a tough battle. Chris Nassetta became the CEO of Hilton in 2007. Anybody remember 2007? Okay. 2007 during our global economic crisis, and he got to work. His belief that hospitality is a business of people serving people, places team members and workplace culture at the absolute center of Hilton's business strategy.
Julian Lute:
During Chris's tenure, Hilton has added 86% more rooms globally, and earned more than 100 Great Place To Work recognitions. He's obsessed with taking care of his team members. We're honored to have him with us today. Can you please help me welcome Chris Nassetta, president and CEO of Hilton?
Julian Lute:
I'll give you the...
Chris Nassetta:
Thank you.
Julian Lute:
Have a seat at the second chair.
Julian Lute:
All right. I think Cliff is coming back out. Cliff from Fortune Magazine is coming back out to be in conversation with Chris. Can we welcome Cliff back to the stage? He's a quick...
Clifton Leaf:
Are you sick of me yet?
Chris Nassetta:
Welcome back, Cliff.
Clifton Leaf:
Welcome back. Welcome back.
Chris Nassetta:
Yes.
Clifton Leaf:
Chris-
Chris Nassetta:
Nice job with Valerie. Isn't Valerie great?
Clifton Leaf:
She's amazing.
Chris Nassetta:
Yes.
Clifton Leaf:
It's so inspirational when you actually get to meet the people who are the tone at the top now. The people who are making these changes.
Clifton Leaf:
Chris, I have to say, you are having a very rare distinction. You're the number one company on the list twice, two years in a row. And the only non-tech company to ever have achieved that.
Clifton Leaf:
I'm going to guess that that's the Hilton cheering section right there.
Chris Nassetta:
No, that is just a broad cheering section.
Clifton Leaf:
That's a broad... Okay. All right.
Chris Nassetta:
We're in a Marriott. I think that's the Marriott cheering section.
Clifton Leaf:
That's the Marriott.
Chris Nassetta:
Right? Come on, Marriott team.
Clifton Leaf:
Marriott. All right. We're good. Some coopetition.
Chris Nassetta:
We're a very hospitable industry. We all like each other.
Clifton Leaf:
Yeah, that's right.
Chris Nassetta:
We root for them and they root for us.
Clifton Leaf:
But one of the interesting things is is that when you started... Basically, Hilton was bought by a private equity company, and it was a mess.
Chris Nassetta:
Indeed it was.
Clifton Leaf:
I mean, let me just be honest about this. This was not a good financial picture for the company at the time. They brought you in, and you had to clean some house. You had to restructure the debt. You fired a bunch of middle-
Chris Nassetta:
Yeah, when you said the, "Do we remember?" Somebody said, "Do you remember 2007?" I was like, "Yeah, I remember 2007."
Clifton Leaf:
Brutal, brutal.
Chris Nassetta:
It was brutal.
Clifton Leaf:
But fundamental to what your turnaround plan was, was having a mission and understanding what was your purpose as a company. Your purpose-
Chris Nassetta:
It was indeed. It was indeed. That was the plan. I remember distinctly. It's engraved in my brain, because those were tough times.
Chris Nassetta:
But before I do that, I do want to say, first of all, thanks for having me. To Michael, wherever you are, probably back in the green room, it's fabulous to be here, even though it is at a Marriott. By the way, I used to have an affiliation with this hotel, because before this, I ran the company that owns this hotel.
Clifton Leaf:
Fantastic.
Chris Nassetta:
It's a fabulous hotel. But there is nothing that I am more proud of than the opportunity to be here. Not because of anything I've done, but because of what our team has done. We have 420, almost 430,000 people in 120 countries around the world that wake up every single day inspired to do great things for our customers and for each other. That's what a culture is about. It's not about me, it's about them. So I have the distinction and honor of being here to represent them today. So I want to say thank you to you and Michael.
Chris Nassetta:
Going back to 2007, I still have PTSD from 2007. You see I'm trying to avoid it. But it really is a simple story. At our scale, which is now double what it was then, we've doubled the size of the company, but it was still a big company then. It was a daunting task. You had a company that I would say was pretty broken, which is why it got taken private. You add a world in 2007 that didn't look so bad, but very quickly looked very, very bad.
Chris Nassetta:
We were part of a private equity buyout with the best partner that we could ever have in Blackstone. But by definition, it was a leveraged buyout. We had a lot of debt. And you were in the greatest free fall in the recorded history of our business and frankly in modern history, in terms of what the Great Recession ended up playing out as. In the middle of all that, it's easy to sort of like lose your way, right?
Clifton Leaf:
Yeah.
Chris Nassetta:
But we didn't, and I didn't, and our team didn't. What was clear and sort of the underpinning of why I came to the company was that you had this business in Hilton that is now a hundred years old, okay? It was 87 years old. Many of you in the room wouldn't know it. Maybe your parents or your grandparents would know it. But it was a business that we pretty much invented everything.
Chris Nassetta:
When you think about the first airport hotel, okay? Where was it? By the way, it was right here in San Francisco. The first airport hotel in the world was at San Francisco Airport. It got torn down to do another runway years ago.
Clifton Leaf:
By the way, the first flight delay was here in San Francisco.
Chris Nassetta:
Yeah, I know. Probably.
Clifton Leaf:
That's right. That's right, yeah.
Chris Nassetta:
Reservation systems, full service hotel. I could go on and on and on. But a lot of the business as we now experience it that you take for granted, we invented. So you have this iconic company, and I come in. That's intimidating. You have hundreds of thousands of people all over the world that you need to get rallied around the cause.
Chris Nassetta:
It was hard to execute against, but what ended up making it easy is something that many people also would not know. Which is a hundred years ago, this really cool guy named Conrad Hilton, that had pretty much invented the business as we know it, started the business in a little town with a noble premise. If you go back and read contemporary writings and letters, he thought that he could make the world a better place. His words were, he wanted to fill the earth with the light and warmth of hospitality.
Chris Nassetta:
What he meant by that, if you go back and read his writings at the time... He wrote books and the like. Was that he thought he could make the world a better place by creating safe places for people to go to experience the world, different cultures, cultural exchange, cultural exchange would lead to better understanding and a better world. That was sort of the premise of why we were founded.
Chris Nassetta:
So for 50 years, more than a half a century, that propelled this incredible company that invented all these things and was a pioneer all over the world. We were the first hotel company to go to Africa, to go to Asia. I mean, all the things you take for granted today.
Chris Nassetta:
But guess what? Like a lot of companies that get to 80, 90, 100 years old, we sort of lost our groove, right?
Clifton Leaf:
Yeah.
Chris Nassetta:
You're at the top of the heap. You sort of lose sight of why you're here. So when I got here, it was clear you had a lot of people with a lot of passion to want to do great stuff that just wasn't being channeled. They didn't know sort of what our purpose was.
Chris Nassetta:
I'm going to say... I said this to Michael, and he was like, "What?" We talk about greenwashing a lot, right? Everybody's saying like, "I'm going to save the world. I'm doing all this environmental stuff, because it's popular." I use that in a different way. Purpose-washing. Right? I think every business now, every ad you see on TV, if you came from Mars and landed in the United States or anywhere and watched TV, you'd say, "Oh my God, every company is saving the world. This is the greatest place on earth." But guess what? They're not.
Chris Nassetta:
So for me, everything is about authenticity, both as a person... Those who know me I think would say to a fault I'm authentic. Probably to a fault. But that any purpose, sort of anything you're going to ground your business in has to be real. It has to be something that you can rally people around. That's what we did. We went back, I went back to the roots of the company and said, "Hey team, look at this. We invented this thing. We've made a huge difference in the world." I demonstrated in real ways the way we did it. I said, "Let's reclaim our rightful spot in history. Let's build an incredible culture."
Chris Nassetta:
I made a promise to our team 13 years ago. The promise was, I am going to make this with your help, the best, most inclusive culture on earth. Not the best in hospitality, the hotel business. The best on earth. So when I sit here on this stage, I guess we're number two in the world, number one in the United States.
Chris Nassetta:
Again, it's not about me. That is a demonstration that we're doing that, that we're living up to that promise. That promise is hard. I say the concept of how we did it is really easy, but you're talking about hundreds of thousands of people in 120 countries, and trying to rally them around a common purpose, trying to make sure that you're doing the right things to invest in them.
Chris Nassetta:
It's crazy complex to execute against. But we've done it, and we've been grinding and grinding and grinding, like our teams that are here that work on this stuff will tell you. It's a game of inches. In the end... Sort of in my colloquial way, and I say it to our teams. I had town halls with our teams here this morning before I came over here. It's a family, and we treat our team like they're family. If we treat them like family, guess how they're going to treat you as a customer when you walk through the doors? While you're with us, you become part of our family.
Chris Nassetta:
I know that sounds sort of corny, but that's actually how I think about it. It's like, "Treat them like family, they'll treat our customers like family." When you walk into a Hilton, if we do it right, it feels different at a Hilton, and you want to come back.
Clifton Leaf:
It was quite a valuable family. I just want to put this in context. For Blackstone, which took you private in this LBO, this leveraged buyout, when they exited in 2018, they profited, they made $14 billion.
Chris Nassetta:
I think it was 16 billion, but who's counting?
Clifton Leaf:
Well, in any case-
Chris Nassetta:
But here's the thing-
Clifton Leaf:
... from my understanding, it was the most valuable private equity deal in history.
Chris Nassetta:
If you go back... I was hired by them to help them. A lot of their investors are pensioners and the like, so they have an awesome responsibility to those people. But yes, they did really, really well.
Chris Nassetta:
By the way, we went public. Our shareholders have done really, really well. If you go back to 2008 and 2009, and read the headlines about Hilton, what you would read is... In fact, one of them in the journal was Blackstone's Black Eye. I don't know what bad stuff Fortune wrote about us.
Clifton Leaf:
We probably said awful things. Yeah.
Chris Nassetta:
I'm sure you guys wrote some nasty stuff.
Clifton Leaf:
I'm sure, yeah.
Chris Nassetta:
But I mean, it was going to be the greatest private equity loss of all time.
Clifton Leaf:
But we're authentic, so it's okay.
Chris Nassetta:
But here's the thing that we're proving, okay? In a grossly simplistic way. You can do well by doing good. Right?
Clifton Leaf:
Exactly. That was my [crosstalk 00:11:34].
Chris Nassetta:
So every time I talk to our teams... And I don't even have to, because these people are so crazy inspired to do good. The do well comes along with it. I'll never forget one of my meetings at Blackstone. We used to do, when we were owned by them, we would do an annual portfolio review. Not always, but occasionally that would be with Steve Schwarzman himself and Tony James, the guys that run it, who I know quite well. Obviously got to know quite well.
Chris Nassetta:
They were looking at... We had gotten through the recession and we were sort of back in business, although we had a lot of debt and all this. They were asking like, "How are you doing it?" Steve said, "This is like magic. How did you make it? How did you survive and how are you now outperforming all your competitors when you had all this debt that we straddled you with? How did you do it?"
Chris Nassetta:
True story, and he would tell you this if you asked him, I said, "Culture." I said, "It was all about motivating and inspiring hundreds of thousands of people." I said, "Steve, you're not going to like this." I looked him in the eye, he remembers this, and I said, "They don't care about making you money. They care about doing good things. They care about doing good things for our customers. They care about doing good things in their communities. Importantly, they care about doing good things for each other. All I'm doing is giving them a framework to be able to feel good about it and to feel part of something bigger. By doing good, I promise you we will do well." He said, "I trust you. Keep going. But I hope it works."
Clifton Leaf:
Well, it worked out.
Chris Nassetta:
At $16 billion, it ended up working out.
Clifton Leaf:
Not bad. Not bad. Not bad at all. But part of that is you said it's a game of inches. I want to talk about those inches, if we can.
Chris Nassetta:
Sure.
Clifton Leaf:
Little things that you do. One of them is this program that you've got for all Hilton family members, all of your team to be able to, say, stay in any of your Hilton hotels as guests.
Clifton Leaf:
When I was talking about that, was this sort of idea of it's a front door culture. You don't have a back door where workers come in through the back door. The philosophy is to have everybody come in through the front door.
Chris Nassetta:
Yeah. Well, I mean, here's the simple... Again, I like to distill things into very simple pieces, because I think it works better. We're in the business of hospitality, we're in the business of experiences, right? That's what we do, and we do it really well. We hope to do it even better, and people stay loyal to us.
Chris Nassetta:
Our team members are essential. They are the most critical element of that in showing that hospitality, delivering those experiences. It stands to reason we need to do the same thing for them. If we show them that same type of hospitality, if we make their experience with us, with their family that they spend so much time with in these hotels, a good experience, by definition, they're going to show better hospitality to our customers.
Chris Nassetta:
It really is that simple. We call it Go Hilton, our team member travel program. There wasn't a place... I mean, you think about it, people work hard. This hotel business thing, it's hard duty. Think about it when-
Clifton Leaf:
It's a nice message we say. Yeah.
Chris Nassetta:
Unlike a lot of other businesses where you go 9:00 to 5:00, 8:00 to 6:00, and where a factory that opens and closes. The day you open a hotel, it never closes. It's open 24 hours a day, seven days a week forever, until it gets torn down, which could be a hundred years later.
Clifton Leaf:
It's like Denny's. Yeah.
Chris Nassetta:
Yeah, it... So people work crazy, crazy hard. Then they provide this hospitality.
Chris Nassetta:
Go Hilton was all about... Everywhere I went in the world, people were... I mean, we had a program. The truth is, this is the team that made it come together. I mean, it was just a terrible program.
Clifton Leaf:
Well, yeah, that's right. The team that made it come together is here.
Chris Nassetta:
I used to say, "If the moons and the stars aligned and Venus is in descending, you could get a room in Poughkeepsie for a night." I mean, literally there was... It just was not a program. It was all paper oriented.
Chris Nassetta:
So I said, "Guys, we need to show our team the hospitality. They bust their you know whats every day, they kill themselves. We're in the travel business, we're in the business of experiences. How about showing them experiences? When they show up, we should treat them and tell our teams they are one of our most valuable customers. We treat our Diamond Honors members so well. Treat our team members like they're the most valued customers that we have, and make things available. Make it available at an affordable price for all."
Chris Nassetta:
The reality is we do it... It's not just about managers. In fact, at the San Francisco Hilton where we have a very large team, I asked the whole team how many people have used it and are going on vacation. Almost every hand in the room went up, at all levels of the organization.
Clifton Leaf:
That's good.
Chris Nassetta:
It's like they are really fired up, because that's the way we should treat them. There are other things like uniforms.
Clifton Leaf:
Yeah, I want to talk about that, because... Yeah.
Chris Nassetta:
That's a funny...
Clifton Leaf:
Your uniform story, yeah.
Chris Nassetta:
Yeah. I told it. I think it got written about last year, and we got first place. But I was literally in Cleveland, we were opening a big new convention hotel next to the Convention Center. I went out the week before.
Chris Nassetta:
Opening hotels, particularly big hotels like this, as our team knows, is really crazy hard work. I mean, it's people working 24 hours a day, seven days a week, and they just are killing it. I went out, and they were so proud to be opening in a week. I spent the night, because they said like, "Try it out." And I tasted some of the food in the restaurant.
Chris Nassetta:
Then they took me into the big ballroom where they were handing out uniforms. They were very proud. I was trying them on. I was putting on these uniforms, and it was like a flak jacket. I was like, "We have housekeepers, bellmen, we have engineering who are doing hard jobs that require a lot of movement. They're wearing these uniforms that really are not flexible, that are very heavy, that don't breathe." I'm thinking, "We live in a world where you have all of these performance fabrics, whether it's Nike or Under Armour, all these folks do this."
Chris Nassetta:
Literally, I got in the car and I called Matt Schuyler, who's somewhere here, and I said, "I got a great idea. This is crazy. We need to call Under Armour..." We ended up doing a deal. "We need to do this. We should reimagine all of..." I mean, it sounds so stupid, but it's like nobody else was doing it. It's like, "We need to reimagine how we think about uniforms across all levels of the organization to make it a better experience." And we did it. Like any of these things, it wasn't easy, but we did it and we rolled it out.
Chris Nassetta:
I was asking the team this morning, as I saw them proudly wearing their Under Armour, and they loved it. It makes their life easier. So it's a game of inches.
Clifton Leaf:
That's right.
Chris Nassetta:
It's like somebody has asked me like, "Gosh, how did you do it two years in a row? Nobody does that." But we were the only hospitality company ever to be number one on the list. It's generally been tech companies. So everybody says, "How did you do it?" I said, "First of all, I'm not going to tell you, because-
Clifton Leaf:
Right, of course not.
Chris Nassetta:
... why would I tell you? I mean, it's competitive." But I would, because I'm transparent. I said, "It's not one thing." If it was one thing, it's what I started with, it all starts with purpose, real purpose, authentic purpose, something that matters. But then the granularity of figuring out if you're going to make a promise...
Chris Nassetta:
Here's the thing, my mother, God bless, she's still alive, 88 years old. You make a promise, you keep it. My promise to our team is I'll never stop. I said to Michael when we met and he was telling me, "You're number one again. This is awesome," I said, "I love it, but I don't want anybody on my team to get complacent, because we are so far from done on building the kind of culture I want. So we will keep grinding on lots of little things."
Clifton Leaf:
As you mentioned Conrad Hilton and his vision of being a company in the world and connecting the world and sort of changing the world by making these great connections, you're now 400,000 people around the world or something like that, working with you.
Chris Nassetta:
450 almost. 430, 440.
Clifton Leaf:
450, wow. Of course right now we're in a situation where there is a potentially pandemic virus around the world. That obviously... It's affecting travel, it's affecting airlines. You obviously have to run a company and be conscious of those safety issues. Not just for the people who stay and are guests in your companies, but your own-
Chris Nassetta:
Our team.
Clifton Leaf:
Your team. Yeah, so-
Chris Nassetta:
Yeah. Well, the first obligation we have is to our team, because as I said, we can't do a very good job taking care of our guests if we don't have a team. So we always take that as the first priority, take safety and security of our team.
Chris Nassetta:
Here's the thing, we had a board meeting yesterday and we spent a lot of time on this topic, as you would guess, because this thing is... The contours of this are sort of unknown. It's evolving at a very rapid pace. I said to our board, I said, "It's sort of good and bad, but we're sort of battle-tested in the sense that because of the nature of the business, because of the breadth of the business, because of our geographic dispersion, we are in the middle of every bad thing that goes on in the world," right? Whether it's the Arab Spring, tsunamis, fires, SARS, bird flu, we've done all this, because we're everywhere. I mean, as I said, that's good and bad. I'm not proud of that. But we have very good policies, procedure, and sadly, experience.
Chris Nassetta:
So I'm really proud of our teams. I mean, this is something that... I think a week ago I thought one thing, I think today I think another, and my guess is I'll think something different a week from now. But our teams are working tirelessly to take care of each other and take care of our guests.
Chris Nassetta:
So far we've done a great job. We have no team member that has had any issue. We have served some guests around the world that have. Ironically, not just in Asia, but because people leaving Asia, we all had it in Hawaii, and Mexico, and a bunch of different places. All of those guests have been cared for, starting with our team and then the local authorities.
Clifton Leaf:
That's great.
Chris Nassetta:
All of them have recovered. We can only do it, again, bit by bit, day by day. We have people that know what they're doing. We have a very sophisticated approach to it, and we're working awfully hard to take care of everybody.
Clifton Leaf:
Do you want to give us a New England Patriots moment? Are you going to three-peat here? Are we going to see-
Chris Nassetta:
I was saying to Michael, trifecta really sounded good.
Clifton Leaf:
Trifecta. I like trifecta.
Chris Nassetta:
Again, for me, I hope so. But of course-
Clifton Leaf:
What would you do? You got-
Chris Nassetta:
... I hope so. But it's not about... I love us being number one on the list, because I think it's a opportunity for me to celebrate our team. I love that opportunity. I love the fact that I'm here with you, because it means so much to our team. People wear this pin that we have incredibly proudly all over the country and all over the world.
Chris Nassetta:
But to me what's more important is what we do. Again, I'm into substance. I'm an authentic guy. The list is great. Michael, if you're listening, I love it and we definitely want a three-peat. What's more important is what we do.
Chris Nassetta:
What's more important is when I go into the back of house like I did this morning with hundreds of our team members that are busting their you know what and working so hard for us, like, "What can we do to make your life easier? What can we do to make your life better so that you can do a better job, so that you can live a better life, not just here with us, but when you go home?" Because the happier they are, the more fulfilled they are, the more they feel like they're part of something. The more they feel like they're part of our family, they are going to do a better job for our customers. We're going to deliver better experiences, and we're going to make the world a little bit better place.
Chris Nassetta:
That's all it is, a game of inches. Bit by bit, we want to make the world, in our own way, a little bit better place.
Clifton Leaf:
All right. We're going to leave it at that. Chris Nassetta, thank you very much.
Chris Nassetta:
Thanks.
Clifton Leaf:
It was great. Do this.
Now our next leader does not fear a tough battle. Chris Nassetta became the CEO of Hilton in 2007. Anybody remember 2007? Okay. 2007 during our global economic crisis, and he got to work. His belief that hospitality is a business of people serving people, places team members and workplace culture at the absolute center of Hilton's business strategy.
Julian Lute:
During Chris's tenure, Hilton has added 86% more rooms globally, and earned more than 100 Great Place To Work recognitions. He's obsessed with taking care of his team members. We're honored to have him with us today. Can you please help me welcome Chris Nassetta, president and CEO of Hilton?
Julian Lute:
I'll give you the...
Chris Nassetta:
Thank you.
Julian Lute:
Have a seat at the second chair.
Julian Lute:
All right. I think Cliff is coming back out. Cliff from Fortune Magazine is coming back out to be in conversation with Chris. Can we welcome Cliff back to the stage? He's a quick...
Clifton Leaf:
Are you sick of me yet?
Chris Nassetta:
Welcome back, Cliff.
Clifton Leaf:
Welcome back. Welcome back.
Chris Nassetta:
Yes.
Clifton Leaf:
Chris-
Chris Nassetta:
Nice job with Valerie. Isn't Valerie great?
Clifton Leaf:
She's amazing.
Chris Nassetta:
Yes.
Clifton Leaf:
It's so inspirational when you actually get to meet the people who are the tone at the top now. The people who are making these changes.
Clifton Leaf:
Chris, I have to say, you are having a very rare distinction. You're the number one company on the list twice, two years in a row. And the only non-tech company to ever have achieved that.
Clifton Leaf:
I'm going to guess that that's the Hilton cheering section right there.
Chris Nassetta:
No, that is just a broad cheering section.
Clifton Leaf:
That's a broad... Okay. All right.
Chris Nassetta:
We're in a Marriott. I think that's the Marriott cheering section.
Clifton Leaf:
That's the Marriott.
Chris Nassetta:
Right? Come on, Marriott team.
Clifton Leaf:
Marriott. All right. We're good. Some coopetition.
Chris Nassetta:
We're a very hospitable industry. We all like each other.
Clifton Leaf:
Yeah, that's right.
Chris Nassetta:
We root for them and they root for us.
Clifton Leaf:
But one of the interesting things is is that when you started... Basically, Hilton was bought by a private equity company, and it was a mess.
Chris Nassetta:
Indeed it was.
Clifton Leaf:
I mean, let me just be honest about this. This was not a good financial picture for the company at the time. They brought you in, and you had to clean some house. You had to restructure the debt. You fired a bunch of middle-
Chris Nassetta:
Yeah, when you said the, "Do we remember?" Somebody said, "Do you remember 2007?" I was like, "Yeah, I remember 2007."
Clifton Leaf:
Brutal, brutal.
Chris Nassetta:
It was brutal.
Clifton Leaf:
But fundamental to what your turnaround plan was, was having a mission and understanding what was your purpose as a company. Your purpose-
Chris Nassetta:
It was indeed. It was indeed. That was the plan. I remember distinctly. It's engraved in my brain, because those were tough times.
Chris Nassetta:
But before I do that, I do want to say, first of all, thanks for having me. To Michael, wherever you are, probably back in the green room, it's fabulous to be here, even though it is at a Marriott. By the way, I used to have an affiliation with this hotel, because before this, I ran the company that owns this hotel.
Clifton Leaf:
Fantastic.
Chris Nassetta:
It's a fabulous hotel. But there is nothing that I am more proud of than the opportunity to be here. Not because of anything I've done, but because of what our team has done. We have 420, almost 430,000 people in 120 countries around the world that wake up every single day inspired to do great things for our customers and for each other. That's what a culture is about. It's not about me, it's about them. So I have the distinction and honor of being here to represent them today. So I want to say thank you to you and Michael.
Chris Nassetta:
Going back to 2007, I still have PTSD from 2007. You see I'm trying to avoid it. But it really is a simple story. At our scale, which is now double what it was then, we've doubled the size of the company, but it was still a big company then. It was a daunting task. You had a company that I would say was pretty broken, which is why it got taken private. You add a world in 2007 that didn't look so bad, but very quickly looked very, very bad.
Chris Nassetta:
We were part of a private equity buyout with the best partner that we could ever have in Blackstone. But by definition, it was a leveraged buyout. We had a lot of debt. And you were in the greatest free fall in the recorded history of our business and frankly in modern history, in terms of what the Great Recession ended up playing out as. In the middle of all that, it's easy to sort of like lose your way, right?
Clifton Leaf:
Yeah.
Chris Nassetta:
But we didn't, and I didn't, and our team didn't. What was clear and sort of the underpinning of why I came to the company was that you had this business in Hilton that is now a hundred years old, okay? It was 87 years old. Many of you in the room wouldn't know it. Maybe your parents or your grandparents would know it. But it was a business that we pretty much invented everything.
Chris Nassetta:
When you think about the first airport hotel, okay? Where was it? By the way, it was right here in San Francisco. The first airport hotel in the world was at San Francisco Airport. It got torn down to do another runway years ago.
Clifton Leaf:
By the way, the first flight delay was here in San Francisco.
Chris Nassetta:
Yeah, I know. Probably.
Clifton Leaf:
That's right. That's right, yeah.
Chris Nassetta:
Reservation systems, full service hotel. I could go on and on and on. But a lot of the business as we now experience it that you take for granted, we invented. So you have this iconic company, and I come in. That's intimidating. You have hundreds of thousands of people all over the world that you need to get rallied around the cause.
Chris Nassetta:
It was hard to execute against, but what ended up making it easy is something that many people also would not know. Which is a hundred years ago, this really cool guy named Conrad Hilton, that had pretty much invented the business as we know it, started the business in a little town with a noble premise. If you go back and read contemporary writings and letters, he thought that he could make the world a better place. His words were, he wanted to fill the earth with the light and warmth of hospitality.
Chris Nassetta:
What he meant by that, if you go back and read his writings at the time... He wrote books and the like. Was that he thought he could make the world a better place by creating safe places for people to go to experience the world, different cultures, cultural exchange, cultural exchange would lead to better understanding and a better world. That was sort of the premise of why we were founded.
Chris Nassetta:
So for 50 years, more than a half a century, that propelled this incredible company that invented all these things and was a pioneer all over the world. We were the first hotel company to go to Africa, to go to Asia. I mean, all the things you take for granted today.
Chris Nassetta:
But guess what? Like a lot of companies that get to 80, 90, 100 years old, we sort of lost our groove, right?
Clifton Leaf:
Yeah.
Chris Nassetta:
You're at the top of the heap. You sort of lose sight of why you're here. So when I got here, it was clear you had a lot of people with a lot of passion to want to do great stuff that just wasn't being channeled. They didn't know sort of what our purpose was.
Chris Nassetta:
I'm going to say... I said this to Michael, and he was like, "What?" We talk about greenwashing a lot, right? Everybody's saying like, "I'm going to save the world. I'm doing all this environmental stuff, because it's popular." I use that in a different way. Purpose-washing. Right? I think every business now, every ad you see on TV, if you came from Mars and landed in the United States or anywhere and watched TV, you'd say, "Oh my God, every company is saving the world. This is the greatest place on earth." But guess what? They're not.
Chris Nassetta:
So for me, everything is about authenticity, both as a person... Those who know me I think would say to a fault I'm authentic. Probably to a fault. But that any purpose, sort of anything you're going to ground your business in has to be real. It has to be something that you can rally people around. That's what we did. We went back, I went back to the roots of the company and said, "Hey team, look at this. We invented this thing. We've made a huge difference in the world." I demonstrated in real ways the way we did it. I said, "Let's reclaim our rightful spot in history. Let's build an incredible culture."
Chris Nassetta:
I made a promise to our team 13 years ago. The promise was, I am going to make this with your help, the best, most inclusive culture on earth. Not the best in hospitality, the hotel business. The best on earth. So when I sit here on this stage, I guess we're number two in the world, number one in the United States.
Chris Nassetta:
Again, it's not about me. That is a demonstration that we're doing that, that we're living up to that promise. That promise is hard. I say the concept of how we did it is really easy, but you're talking about hundreds of thousands of people in 120 countries, and trying to rally them around a common purpose, trying to make sure that you're doing the right things to invest in them.
Chris Nassetta:
It's crazy complex to execute against. But we've done it, and we've been grinding and grinding and grinding, like our teams that are here that work on this stuff will tell you. It's a game of inches. In the end... Sort of in my colloquial way, and I say it to our teams. I had town halls with our teams here this morning before I came over here. It's a family, and we treat our team like they're family. If we treat them like family, guess how they're going to treat you as a customer when you walk through the doors? While you're with us, you become part of our family.
Chris Nassetta:
I know that sounds sort of corny, but that's actually how I think about it. It's like, "Treat them like family, they'll treat our customers like family." When you walk into a Hilton, if we do it right, it feels different at a Hilton, and you want to come back.
Clifton Leaf:
It was quite a valuable family. I just want to put this in context. For Blackstone, which took you private in this LBO, this leveraged buyout, when they exited in 2018, they profited, they made $14 billion.
Chris Nassetta:
I think it was 16 billion, but who's counting?
Clifton Leaf:
Well, in any case-
Chris Nassetta:
But here's the thing-
Clifton Leaf:
... from my understanding, it was the most valuable private equity deal in history.
Chris Nassetta:
If you go back... I was hired by them to help them. A lot of their investors are pensioners and the like, so they have an awesome responsibility to those people. But yes, they did really, really well.
Chris Nassetta:
By the way, we went public. Our shareholders have done really, really well. If you go back to 2008 and 2009, and read the headlines about Hilton, what you would read is... In fact, one of them in the journal was Blackstone's Black Eye. I don't know what bad stuff Fortune wrote about us.
Clifton Leaf:
We probably said awful things. Yeah.
Chris Nassetta:
I'm sure you guys wrote some nasty stuff.
Clifton Leaf:
I'm sure, yeah.
Chris Nassetta:
But I mean, it was going to be the greatest private equity loss of all time.
Clifton Leaf:
But we're authentic, so it's okay.
Chris Nassetta:
But here's the thing that we're proving, okay? In a grossly simplistic way. You can do well by doing good. Right?
Clifton Leaf:
Exactly. That was my [crosstalk 00:11:34].
Chris Nassetta:
So every time I talk to our teams... And I don't even have to, because these people are so crazy inspired to do good. The do well comes along with it. I'll never forget one of my meetings at Blackstone. We used to do, when we were owned by them, we would do an annual portfolio review. Not always, but occasionally that would be with Steve Schwarzman himself and Tony James, the guys that run it, who I know quite well. Obviously got to know quite well.
Chris Nassetta:
They were looking at... We had gotten through the recession and we were sort of back in business, although we had a lot of debt and all this. They were asking like, "How are you doing it?" Steve said, "This is like magic. How did you make it? How did you survive and how are you now outperforming all your competitors when you had all this debt that we straddled you with? How did you do it?"
Chris Nassetta:
True story, and he would tell you this if you asked him, I said, "Culture." I said, "It was all about motivating and inspiring hundreds of thousands of people." I said, "Steve, you're not going to like this." I looked him in the eye, he remembers this, and I said, "They don't care about making you money. They care about doing good things. They care about doing good things for our customers. They care about doing good things in their communities. Importantly, they care about doing good things for each other. All I'm doing is giving them a framework to be able to feel good about it and to feel part of something bigger. By doing good, I promise you we will do well." He said, "I trust you. Keep going. But I hope it works."
Clifton Leaf:
Well, it worked out.
Chris Nassetta:
At $16 billion, it ended up working out.
Clifton Leaf:
Not bad. Not bad. Not bad at all. But part of that is you said it's a game of inches. I want to talk about those inches, if we can.
Chris Nassetta:
Sure.
Clifton Leaf:
Little things that you do. One of them is this program that you've got for all Hilton family members, all of your team to be able to, say, stay in any of your Hilton hotels as guests.
Clifton Leaf:
When I was talking about that, was this sort of idea of it's a front door culture. You don't have a back door where workers come in through the back door. The philosophy is to have everybody come in through the front door.
Chris Nassetta:
Yeah. Well, I mean, here's the simple... Again, I like to distill things into very simple pieces, because I think it works better. We're in the business of hospitality, we're in the business of experiences, right? That's what we do, and we do it really well. We hope to do it even better, and people stay loyal to us.
Chris Nassetta:
Our team members are essential. They are the most critical element of that in showing that hospitality, delivering those experiences. It stands to reason we need to do the same thing for them. If we show them that same type of hospitality, if we make their experience with us, with their family that they spend so much time with in these hotels, a good experience, by definition, they're going to show better hospitality to our customers.
Chris Nassetta:
It really is that simple. We call it Go Hilton, our team member travel program. There wasn't a place... I mean, you think about it, people work hard. This hotel business thing, it's hard duty. Think about it when-
Clifton Leaf:
It's a nice message we say. Yeah.
Chris Nassetta:
Unlike a lot of other businesses where you go 9:00 to 5:00, 8:00 to 6:00, and where a factory that opens and closes. The day you open a hotel, it never closes. It's open 24 hours a day, seven days a week forever, until it gets torn down, which could be a hundred years later.
Clifton Leaf:
It's like Denny's. Yeah.
Chris Nassetta:
Yeah, it... So people work crazy, crazy hard. Then they provide this hospitality.
Chris Nassetta:
Go Hilton was all about... Everywhere I went in the world, people were... I mean, we had a program. The truth is, this is the team that made it come together. I mean, it was just a terrible program.
Clifton Leaf:
Well, yeah, that's right. The team that made it come together is here.
Chris Nassetta:
I used to say, "If the moons and the stars aligned and Venus is in descending, you could get a room in Poughkeepsie for a night." I mean, literally there was... It just was not a program. It was all paper oriented.
Chris Nassetta:
So I said, "Guys, we need to show our team the hospitality. They bust their you know whats every day, they kill themselves. We're in the travel business, we're in the business of experiences. How about showing them experiences? When they show up, we should treat them and tell our teams they are one of our most valuable customers. We treat our Diamond Honors members so well. Treat our team members like they're the most valued customers that we have, and make things available. Make it available at an affordable price for all."
Chris Nassetta:
The reality is we do it... It's not just about managers. In fact, at the San Francisco Hilton where we have a very large team, I asked the whole team how many people have used it and are going on vacation. Almost every hand in the room went up, at all levels of the organization.
Clifton Leaf:
That's good.
Chris Nassetta:
It's like they are really fired up, because that's the way we should treat them. There are other things like uniforms.
Clifton Leaf:
Yeah, I want to talk about that, because... Yeah.
Chris Nassetta:
That's a funny...
Clifton Leaf:
Your uniform story, yeah.
Chris Nassetta:
Yeah. I told it. I think it got written about last year, and we got first place. But I was literally in Cleveland, we were opening a big new convention hotel next to the Convention Center. I went out the week before.
Chris Nassetta:
Opening hotels, particularly big hotels like this, as our team knows, is really crazy hard work. I mean, it's people working 24 hours a day, seven days a week, and they just are killing it. I went out, and they were so proud to be opening in a week. I spent the night, because they said like, "Try it out." And I tasted some of the food in the restaurant.
Chris Nassetta:
Then they took me into the big ballroom where they were handing out uniforms. They were very proud. I was trying them on. I was putting on these uniforms, and it was like a flak jacket. I was like, "We have housekeepers, bellmen, we have engineering who are doing hard jobs that require a lot of movement. They're wearing these uniforms that really are not flexible, that are very heavy, that don't breathe." I'm thinking, "We live in a world where you have all of these performance fabrics, whether it's Nike or Under Armour, all these folks do this."
Chris Nassetta:
Literally, I got in the car and I called Matt Schuyler, who's somewhere here, and I said, "I got a great idea. This is crazy. We need to call Under Armour..." We ended up doing a deal. "We need to do this. We should reimagine all of..." I mean, it sounds so stupid, but it's like nobody else was doing it. It's like, "We need to reimagine how we think about uniforms across all levels of the organization to make it a better experience." And we did it. Like any of these things, it wasn't easy, but we did it and we rolled it out.
Chris Nassetta:
I was asking the team this morning, as I saw them proudly wearing their Under Armour, and they loved it. It makes their life easier. So it's a game of inches.
Clifton Leaf:
That's right.
Chris Nassetta:
It's like somebody has asked me like, "Gosh, how did you do it two years in a row? Nobody does that." But we were the only hospitality company ever to be number one on the list. It's generally been tech companies. So everybody says, "How did you do it?" I said, "First of all, I'm not going to tell you, because-
Clifton Leaf:
Right, of course not.
Chris Nassetta:
... why would I tell you? I mean, it's competitive." But I would, because I'm transparent. I said, "It's not one thing." If it was one thing, it's what I started with, it all starts with purpose, real purpose, authentic purpose, something that matters. But then the granularity of figuring out if you're going to make a promise...
Chris Nassetta:
Here's the thing, my mother, God bless, she's still alive, 88 years old. You make a promise, you keep it. My promise to our team is I'll never stop. I said to Michael when we met and he was telling me, "You're number one again. This is awesome," I said, "I love it, but I don't want anybody on my team to get complacent, because we are so far from done on building the kind of culture I want. So we will keep grinding on lots of little things."
Clifton Leaf:
As you mentioned Conrad Hilton and his vision of being a company in the world and connecting the world and sort of changing the world by making these great connections, you're now 400,000 people around the world or something like that, working with you.
Chris Nassetta:
450 almost. 430, 440.
Clifton Leaf:
450, wow. Of course right now we're in a situation where there is a potentially pandemic virus around the world. That obviously... It's affecting travel, it's affecting airlines. You obviously have to run a company and be conscious of those safety issues. Not just for the people who stay and are guests in your companies, but your own-
Chris Nassetta:
Our team.
Clifton Leaf:
Your team. Yeah, so-
Chris Nassetta:
Yeah. Well, the first obligation we have is to our team, because as I said, we can't do a very good job taking care of our guests if we don't have a team. So we always take that as the first priority, take safety and security of our team.
Chris Nassetta:
Here's the thing, we had a board meeting yesterday and we spent a lot of time on this topic, as you would guess, because this thing is... The contours of this are sort of unknown. It's evolving at a very rapid pace. I said to our board, I said, "It's sort of good and bad, but we're sort of battle-tested in the sense that because of the nature of the business, because of the breadth of the business, because of our geographic dispersion, we are in the middle of every bad thing that goes on in the world," right? Whether it's the Arab Spring, tsunamis, fires, SARS, bird flu, we've done all this, because we're everywhere. I mean, as I said, that's good and bad. I'm not proud of that. But we have very good policies, procedure, and sadly, experience.
Chris Nassetta:
So I'm really proud of our teams. I mean, this is something that... I think a week ago I thought one thing, I think today I think another, and my guess is I'll think something different a week from now. But our teams are working tirelessly to take care of each other and take care of our guests.
Chris Nassetta:
So far we've done a great job. We have no team member that has had any issue. We have served some guests around the world that have. Ironically, not just in Asia, but because people leaving Asia, we all had it in Hawaii, and Mexico, and a bunch of different places. All of those guests have been cared for, starting with our team and then the local authorities.
Clifton Leaf:
That's great.
Chris Nassetta:
All of them have recovered. We can only do it, again, bit by bit, day by day. We have people that know what they're doing. We have a very sophisticated approach to it, and we're working awfully hard to take care of everybody.
Clifton Leaf:
Do you want to give us a New England Patriots moment? Are you going to three-peat here? Are we going to see-
Chris Nassetta:
I was saying to Michael, trifecta really sounded good.
Clifton Leaf:
Trifecta. I like trifecta.
Chris Nassetta:
Again, for me, I hope so. But of course-
Clifton Leaf:
What would you do? You got-
Chris Nassetta:
... I hope so. But it's not about... I love us being number one on the list, because I think it's a opportunity for me to celebrate our team. I love that opportunity. I love the fact that I'm here with you, because it means so much to our team. People wear this pin that we have incredibly proudly all over the country and all over the world.
Chris Nassetta:
But to me what's more important is what we do. Again, I'm into substance. I'm an authentic guy. The list is great. Michael, if you're listening, I love it and we definitely want a three-peat. What's more important is what we do.
Chris Nassetta:
What's more important is when I go into the back of house like I did this morning with hundreds of our team members that are busting their you know what and working so hard for us, like, "What can we do to make your life easier? What can we do to make your life better so that you can do a better job, so that you can live a better life, not just here with us, but when you go home?" Because the happier they are, the more fulfilled they are, the more they feel like they're part of something. The more they feel like they're part of our family, they are going to do a better job for our customers. We're going to deliver better experiences, and we're going to make the world a little bit better place.
Chris Nassetta:
That's all it is, a game of inches. Bit by bit, we want to make the world, in our own way, a little bit better place.
Clifton Leaf:
All right. We're going to leave it at that. Chris Nassetta, thank you very much.
Chris Nassetta:
Thanks.
Clifton Leaf:
It was great. Do this.
