Lessons on people and business from the industry’s top CEOs
Today’s Hotelier has exclusive interviews with some of the industry’s most notable CEOs, including Best Western, Choice Hotels, G6 Hospitality, IHG, Vantage and Wyndham. Here they share their achievements, struggles, leadership insights, views on Airbnb, and how they search for top talent.
by DAVID JONESVantage CEO Roger Bloss thinks a major trait in being a good leader is not being afraid to fail. He showed that by walking away from a good-paying job to start his own company a decade ago, which has, through the years, grown beyond his own expectations. Although he admits he lost a lot of sleep after walking into his home with a box of his belongings from his desk, having to explain to his pregnant wife what he’d just done.
Bloss and five other CEOs share their views, which explains their attitudes and game plans for becoming some of the most successful in their craft. At this year’s 2016 AAHOA Convention in Nashville, these six CEOs – in addition to many others – met for a candid panel discussion to discuss the latest hotelier hot-button topics.
Best Western CEO David Kong searches for talent with passion and enthusiasm, saying such traits gets those around them excited. On the other hand, G6 Hospitality’s Jim Amorosia feels good leadership is to direct others toward their goals then step aside and let those around him use their talents.
The group of leaders also shared some of their most painful failures, important traits they feel future hoteliers must have, along with what they learned the first time they lost a customer and the impact issues like Airbnb could have on the industry in the future.
IHG’s Elie Maalouf, for example, remains a huge fan of Phil Knight. Kong’s favorite is Bill Gates, who he calls a genius who uses his successes to not just make profits but benefit others with the Gates Foundation.
Wyndham CEO Geoff Ballotti says loyalty not only with a company, but to customers, is a trait future generations must hold on to if they want to thrive in the business. When it comes to Airbnb, Bloss calls it a little “creepy’’ from his point of view and feels customers will continue to give the bulk of their business to familiar names, not take gambles on what they are getting.
And each has their own tale of failure, maybe none more memorable than Kong who misplaced a dress for the mother of the bride before a wedding. The lost dress ended up in a local newspaper story after one of the guests told a friend who happened to be a journalist. Kong’s lesson? A mistake at a wedding can be rougher than some might ever imagine.
Amorosia: The main responsibility of a leader is to provide direction and then get out of the way. I am a firm proponent of collaboration and the ability to clearly communicate the vision to the enterprise. The leader is basically the glue, or the spirit so to speak, that ensures people are tapping each other’s expertise to achieve the vision.
Ballotti: A great leader exudes an openness and willingness to listen. So it’s about being approachable, being positive and not taking oneself too seriously.
Bloss: For me, the trait of a good leader is to have no fear. To lead you can’t be afraid to step out of the box. Vantage was a company that changed the franchising model in the hotel industry. When I went out to raise money for this company to launch it [in 1996], everybody told me it would never work [because of so many established brands]. If I had listened to people or I was afraid of those things, it never would have happened. So I always think a good leader has no fear.
Joyce: I believe the single most common trait among strong leaders is emotional intelligence. The ability to understand the impact of your words, body language and actions on your team, and how they will react as individuals to whatever strategy you’re enacting, challenges, news or issues you’re facing. This awareness is the single biggest advantage in leading people to strong performance or overcoming adversity.
Maalouf: I think a good leader should have the judgment to know what the right thing is to do, and then the courage to do it. Judgment without the courage to act doesn’t get results, and courage without judgment is reckless.
Kong: Aside from being a strategic thinker and good with people, a good leader knows how to communicate well. A good leader understands the importance of appealing to emotions instead of logic. Articulating the “why” instead of the “what” is a leadership trait that most people overlook.
Amorosia: It starts with understanding people: who they are, what their strengths and talents are, and then finally developing tailored plans to support their professional development.
Ballotti: Most important for me is emotional intelligence. Does the candidate show a little humility and intellectual curiosity? If so, that’s the person I’m most interested in bringing on my team. Much like physical conditioning, you’ve got to stretch. And you have to stretch your talent too. Encourage them to take on new challenges beyond their comfort zone while asking what they want next in their career, giving them a path they can follow.
Bloss: I look for college level athletes. I don’t care if they are volleyball, baseball, football, rowing, it doesn’t matter as long as they did something competitively at least at the college level; that’s the first way I spot talent. The second way is [by evaluating]their character when no one is looking. We always talk about educate instead of mandate so everybody in our company is allotted time off from their positions and compensated for continuing education.
Joyce: As our executive team always says, “It’s all about having that fire in the belly.” We are looking for the exceptional few who have a drive to compete and succeed. They have to have achieved something exceptional and have demonstrated a track record of innovation, yet that same person needs to also demonstrate social intelligence and awareness of how their actions impact other people. On the talent development front, we customize our approach based on the individual. We identify high performers and high-potential employees, as well as diverse talent and future women leaders and help guide their development through personally tailored development plans.
Maalouf: I think it’s important to create a team with different abilities and strengths that complement each other. My role as a leader isn’t to give my team marching orders but to orchestrate their talents and their ideas, and to encourage incredibly different people to work together and learn from each other.
Kong: I look for enthusiasm and passion. When someone is passionate about their job, he/she will be proactive, more resilient and will also get others excited. I often say, “If we are not excited about something, why should anyone else be?” Enthusiasm can be learned and can become a habit. From a development perspective, I also encourage our team to think differently and try new approaches. Often, that leads to breakthrough successes. Success breeds success and ultimately becomes a positive reinforcement, continuing the virtuous circle.
Amorosia: The most difficult thing was being able to walk away from buying a hotel on the West Coast [because his boss wouldn’t OK it]knowing it was going to be an outstanding success, and lo and behold, about two years later, the owner of the building came to me at a conference and he said, ‘I am so glad we didn’t sell this to you because we are making money hand over fist.’
Ballotti: It’s always hard to make a decision that could have a personnel impact. Look at the changing technology landscape. As tech progresses, everyone’s business must evolve, and that could mean restructuring the way in which we operate, which could impact people’s lives.
Bloss: The hardest decision I had to make was quitting a job [to start his own business]. I went home and told my wife, who was at that time about six months pregnant, that I have no job, no income, no insurance and no job prospects, and I have this crazy idea that I’m going to change the franchising world in the hospitality industry. The first couple of years I questioned that decision many times at night [while]trying to fall asleep (laughs).
Joyce: The hardest business decisions any leader needs to make always involve people. Over my career I’ve had to remove, replace or lay off some very talented, hardworking, ethical and good people to meet the objectives and needs of the company. Some of those people were close friends. It is always those tough calls that wear on me the most.
Maalouf: In a previous role, I had to make the decision not to move forward with a large partnership that was attractive and complementary from a business standpoint, because I felt the culture of the two companies were not a good fit. It was certainly tough to see others take on the partnership, although I don’t regret it and believe we made a decision that was ultimately right for our business.
Kong: The hardest business decision is always about people. At one point in my career, we had to lay off a lot of people. I fretted over the decision for days because I knew these decisions affect people’s livelihood and oftentimes, their self-worth.
Amorosia: Stephen Schwarzman of Blackstone, an influential leader who has made a significant impact in their business and the world.
Ballotti: I really admired Jack Welch. He was always questioning the status quo, which kept him on top of the game during the years he led GE as few other CEOs were able to do.
Bloss: For me it was listening to Mike Leven and believing in what he did and said and opening my mind to possibilities, in particular, the Internet, which is what gave me the courage, if you will, to say, ‘OK, there’s a vehicle I can use to be competitive.’
Joyce: While I admire many past or present CEOs, I particularly admire Stewart Bainum, our founder, for his tireless and tenacious efforts in growing Choice while at the same time giving back to the community significantly, helping to level the education playing field for those economically disadvantaged.
Maalouf: While not CEO anymore, Phil Knight has created one of the most powerful global brands and business enterprises. Nike continues to innovate its products, extend its competitive lead and excite its customers. In both retail and digital, it connects with fans exceptionally well, stimulating high loyalty and enthusiasm. It has also delivered terrific shareholder returns.
Kong: Bill Gates. He is a genius and created a technology company that is still relevant today. I admire his intellect. More importantly, I admire his starting the Gates Foundation and using his talents to do good. He will be remembered not just for Microsoft, but for wiping out disease.
Amorosia: The word is hospitality, and you always have to do everything you do as a hotelier from the standpoint of hospitality – whether we’re talking about service, experience, product, delivery, whatever it might be. We’re going to be distracted more and more by the different technological advancements and challenges that are falling at our doorstep. [We have to realize that] it may make things faster, more efficient and better priced, but if it doesn’t tie back to the concept of hospitality, you better take a really long, hard look at it because if you lose your soul, which is hospitality, you are going to be in a world of hurt.
Ballotti: Loyalty has never mattered more, and we need to do the right things to keep our most loyal guests loyal to us.
Bloss: I’ve taught my kids to look at people, to speak to them eye to eye, shake hands firmly and be able to carry out a conversation eye to eye. And I will tell you, to me, that is one of the most important things for kids to learn. I want people to still have personalities, I want them out, I want them looking people in the eye. The other thing that I think is really, really important is they have to understand ‘global.’ I’m teaching my kids now: take foreign languages, take geography, take history. Our world is shrinking every day.
Joyce: Technology will continue to reshape the way we do business. I think the question for the next generation is how to effectively harness what’s new in technology to deliver on the classic guest expectations of cleanliness, friendliness and attention to their needs. This means tomorrow’s hoteliers need to have a more sophisticated understanding of what drives profitability than ever before. That starts with the top line. Not all sources of revenue are equally profitable. And while the next generation of hoteliers will certainly have new and better tools to manage property profitability, they will need to understand profit isn’t simply the absence of expense. It’s about knowing where and how to invest in your business in ways that maximize the top line and optimize the bottom line.
Maalouf: The guest journey starts well before our guests physically stay in our hotels, and how we engage with them throughout the journey is important. Technology plays a fundamental role in this journey, from mobile bookings before a stay to sharing photos and experiences afterward with friends and family on social media. We deliver on this at IHG through our mobile app and through initiatives like the IHG® Translator App, which is available on the Apple Watch.
Kong: I have a lot of respect for the next generation of hoteliers. They are ambitious, take risks and are successful. Perhaps the hardest and most important thing to learn, especially when one is successful, is humility. Learning to be compassionate and respectful will ensure success in the long run.
Amorosia: There is no consistency, there is no reliability beyond the individual vs. the hotel that has a brand they’ve got to protect. What is the definition of a level playing field, because that’s where it’s all going to come down to – whether we’re talking about safety, taxable revenue or code, whatever it might be, we need to make sure we recognize this is an inventory that has always been around. The only difference is now it has a much more concentrated approach to it.
Bloss: Think about it: You’re driving down the road, and you are hungry and you’ve got your two young kids in the backseat. You see Bob’s Hamburgers and you see McDonald’s; which one are you picking if you’re in a foreign town? You’re going to go with the one you know, you trust and have confidence in. At the end of the day, the consumer still wants to have a focus on, “I’m going to have a great time.” They don’t want to be nervous: Is this person going to be weird, is it going to be smelly, is it going to be different than what I booked?
Joyce: At Choice, we don’t consider Airbnb a direct threat, but instead have recognized that it has identified some particular areas of hospitality that are relevant opportunities for growth for our brand. We envision a hotel-technology branded platform that has the ability to deliver the vacation rental experience with greater assurance under the credibility of a great brand. We know we are capable of making a footprint in this space, while avoiding the pitfalls of the existing business model. We intend to offer a diverse selection of private rental homes and condos on a powerful distribution platform through a technology platform that vacation rental management companies have desperately needed.
Maalouf: The sharing economy is developing and expanding from concepts like sharing rides and homes, to tools and even laundry services. In some cases it creates business opportunities and solves consumer needs. In all cases, we feel it is critical that everyone who participates in the sharing economy also shares the same rules and regulations. Our successful free enterprise economy depends on the foundation that all participants follow the same rules.
Kong: Airbnb is already having a dramatic and adverse effect on our industry. In 2015, many of us didn’t sell out with citywide conventions. A recent New York City study showed Airbnb took about 8 percent of our demand. A significant portion of Airbnb’s revenue comes from commercial hosts (landlords that lease out apartments). We need to support AH&LA as our voice and our advocate, helping level the playing field. While we welcome competition because it makes us better, we can’t compete if commercial hosts don’t have to meet the same zoning code, health and safety regulation, or occupancy tax requirements. We should also be mindful not to feed the monster. The industry is fragmented with many different owners, brands and operators. We created the OTA problem. Listing our inventory on Airbnb might lead to short-term gain, but likely, long-term pain.
Amorosia: There was a time in my life where I was a furniture designer, and I designed furniture for university libraries. We had to rely on a number of different providers [for a contract with a school district]for raw materials to make it all work and to get it all done in an appropriate time frame. [So] if A happens what does that do to B, what does it to do C, D, E, F so on and so forth? So it was kind of like this giant cube of information in trying to keep all the pieces connected. Come to fruition, one thing held up the entire process. Unfortunately nothing could be done without that one thing, and the district ended up not being able to come close to the delivery time frame that they needed. They ended up canceling the contract.
Ballotti: I got lazy, I was not as prepared as I should have been and I lost the customer. Because of that, Dale Carnegie always rings in my head: “Fail to prepare, prepare to fail.”
Bloss: I [went]to AAHOA [in the mid-90s]to say, “Hey I have this great idea how to be a different structure to the legacy franchise company,” and I spent the next six months of my life putting together a program and a plan to take my brand and make it the AAHOA brand. So basically AAHOA was going to be my customer, and I pitched it to the board, I pitched it to the chairman and they liked it; it was working well. We had a game plan. I go to the offices, walk into the board meeting all excited to sign this agreement, and I can see the faces. They proceed to tell me that there’s been a change, they’re not going to go forward with my plan. I just lost my biggest and, quite frankly, only customer.
Joyce: Like any business, customers (in our case, consumers and franchisees) are lost due to a variety of reasons. While we have extraordinarily high retention rates for both sets of our customers, losses are usually attributable to a lack of understanding expectations or a lack of meeting them. This is, and always will be, a two-sided issue. Listening carefully to our customer is our primary weapon in winning the battle of met expectations.
Maalouf: At a previous company, we nearly lost a major piece of business because we weren’t being innovative enough. We had to work very hard to convince the customer that we could stretch and grow to meet their needs, and we eventually kept the business, but it was a very important learning opportunity. The fear of failure was highly motivating to transform ourselves very quickly.
Kong: There was a delivery for a dress for the mother of the bride and the bellman who received it that morning had the best intention. He put it in housekeeping so it wouldn’t get dirty, but he didn’t let anyone know. When (the mother) checked in that afternoon, no one could find the dress because it was not in the usual storage areas. It turned out this guest had a friend who worked for a local newspaper. Her story ran in the newspaper the following week. To make matters worse, the president of our company read the article. He sent me the paper. He circled the article with a red pen and wrote: David, really? I learned then that any mistake associated with a wedding is doubly painful.
Amorosia: The canceling [of the furniture company contract]put the company in such a cash bind that it actually went insolvent over it. So I had to take to a step away from that and really learn two lessons. The first one is although you have to rely on other sources, it’s your obligation to vet every single source to the best of your ability. The second one was as good as any one person is, they are never more important than the ultimate survival of the company. You always have to ask yourself that kind of a question: Are you entering into something that puts something else at risk, and if you are, you better have a very good reason for why you are doing it.
Ballotti: What could have been a hardship turned into a huge benefit. I worked in Europe when my children were very young and was always asking my family to move for my job. Four daughters adjusted through seven different international school systems. That’s a lot of change, but as a result, my American children are truly global citizens.
Bloss: I get a call from a friend, he says, ‘Rog, I’m leaving your brand.’ So I called in my team, sat them down, and I said we have 200 customers, each of us are going to go visit five of them face to face and we’re going to make sure this never happens again – [getting]blind-sided. I gave them all airline tickets, and I said let’s go re-engage. I will never let that happen to me again.
Joyce: I came on as CEO of the company in 2008, which was not the most opportune moment. However, in many ways it was fortuitous in that we took the opportunity to rebuild our technology infrastructure, create two innovative headquarters facilities and launch the first major soft branded collection, our Ascend Collection. It also proved to be an important time to shift our culture to be much more performance-based with executives who have an enterprise view (versus parochial). As a result of that period, Choice emerged a very different company with a particularly technology-focused approach.
Maalouf: During the last financial crisis, when I was with my previous company, we had to quickly determine which sacrifices we had to make and which core elements of our business we needed to protect. The crisis brought our leadership team closer together and brought clarity to these difficult decisions. I came away with a new perspective on recognizing the essentials of a business model and the importance of preserving them.
Kong: Some years ago, I was food and beverage director at a hotel. My revenue, cost and guest satisfaction numbers were among the best in the company. Then, a new general manager came on board. All of a sudden, he was finding fault with everything. Among the many criticisms, he said the operation lacked “razzle dazzle.” So I spent a lot of money to revamp our china, glassware, uniform, menu, food presentation, etc., but it was never good enough for this general manager. Then the recession hit. All of a sudden, the focus reversed to being more frugal and profitable. One of the most important lessons I learned is, as leaders, we should never be capricious and arbitrary. While feedback is good, it should be fair and constructive. Another lesson is that God gave us different talents. While we should work to improve our weakness, we should always work to leverage our strengths.