By Randy Southerland
Sometimes the best way to plot a course for the future is to look at the past. The hotel industry is filled with successful leaders who have blazed new trails, set new enterprises in motion and, in some cases, changed the way we think about the industry.
Here we will look at a few of the most outstanding leaders in the profession. Some are retired, other actively continuing to build on their own legacy. All of them possess a wisdom born of experience that can studied and used by those who are following in their footsteps and even those who aspire to eclipse what they have done.
John Willard “Bill” Marriott Jr.
Ask the customer what the customer wants, and give it to him. –John Willard “Bill” Marriott Jr.
There’s no shortage of people who will tell you that Bill Marriott Jr. built the hospitality industry that we know today. His father, John Willard, launched the family business in the 1920s with a root beer stand in Washington, D.C. It grew into a chain of restaurants called Hot Shoppes. Later the family branched out into hospitality with the Twin Bridges Marriott.
Although the elder Marriott was reluctant to take on the debt required for hotels, his son foresaw the travel boom that was to come to America and pushed to build a chain of hotels – called motor courts to distinguish them from motels.
Marriott became an international company by acquiring an airline catering kitchen in Venezuela, and expanded its restaurant operations to include the Big Boy chain and Roy Rogers fast-food division.
Marriott recalls: “I went to my dad one day and I said, ‘why don’t you let me try and run this hotel?’ He said, ‘well you don’t know anything about the hotel business,’ and I said, ‘I know, but neither does anybody else around here.’ And so they gave me the responsibility to supervise that first hotel and then to open the second hotel, and it just kind of went on from there.”
His philosophy for success evolved over 40 years as CEO of the hotel chain. He became famous for a hands-on style that he called “management by walking around.” He would check into a hotel unannounced to see how it was operating. He cultivated this knowledge of how things actually work by drawing 40 percent of managers from the ranks of hourly employees.
“I pull a sneak attack every now and then, but it doesn’t work for long,” he said during an interview for the PBS series CEO Exchange. “The word gets out, and soon as they know I’m there, then things kind of change a little.”
Marriott succeeded his father as CEO in 1972 and the company grew through acquisitions and the development of new lodging brands. Courtyard by Marriott was introduced as the company’s second lodging brand and later entered the vacation timeshare business. After his father’s death in 1985, he became chairman. The company sold its restaurants and focused on lodging, senior living and contract services.
Shortly after his 80th birthday in March 2012, he gave up the CEO position, but remained an active chairman, visiting upward of 200 hotels a year. The company has continued to grow. The company operated more than 759,330 Marriott International hotel rooms worldwide in 2015 including Courtyard, Renaissance and Ritz-Carlton, and there are more than 800 new Marriott-operated properties being planned worldwide.
A key to success in this business is also showing loyalty to workers and giving them the opportunity to advance.
“The loyalty and the devotion to the business, the devotion to the guests is something you just can’t buy with money,” he says.
He recounts visiting a hotel in downtown Washington where a manager said to him: “See that young lady over there pushing the bell cart? She came out of welfare.” The woman started in housekeeping, worked hard and was eventually promoted to making $300-400 a day as a bellhop.
“These kinds of stories are what keep us going,” explains Marriott.
Customer service is paramount. “Somebody asked me once, ‘What’s the most successful thing about going into business?’ I said, ‘Ask the customer what the customer wants, and give it to him.’”
Study what your competitors are doing. “I study their products all the time,” explained Marriott. “I’m in their hotels, walking their lobbies. I sneak into their guest rooms every now and then to see what they’re doing different, and I’m out with the competition as much as I am with my own properties. Because I want to know what’s different, what’s happening, what’s going on, and I guess I’m a continuous student of the business.”
On a personal level, Marriott practices actions that will keep him focused on the job at hand. One of the most important of these is the use of lists. “They keep me organized; they keep me focused,” he wrote in a recent blog post. “I operate best with lists….”
He added, “No one accidentally becomes a good leader. It takes dedication and discipline.”
Marriott’s Takeaways
Bill Marriott follows a set of simple business principles that can be applied to nearly any kind of hospitality business.
- Challenge your team to do better, and do it often.
- Take good care of your associates, and they’ll take good care of your customers, and they’ll come back.
- Celebrate your peoples’ success, not your own.
- Know what you’re good at and keep improving.
- Communicate by listening to your customers, associates and competitors.
- See and be seen. Get out of your office, walk the talk, make yourself visible and accessible.
- Success is always in the details.
- It’s more important to hire people with the right qualities than with specific experience.
- Customer needs may vary, but their bias for quality never does.
- Always hire people who are smarter than you are.
- View every problem as an opportunity to grow.
Horst Schulze
Ladies and gentlemen serving ladies and gentlemen. –Horst Schulze
Much like Mark Twain, reports of the death of Horst Schulze’s remarkable career have been greatly exaggerated. Schulze revolutionized the hotel industry both as president of Ritz-Carlton Hotels and then his own company, Capella Hotel Group. He altered the very nature of customer service by creating a culture of “ladies and gentlemen serving ladies and gentlemen.” Yet many thought the latest act of his career was going to end badly.
In fact, during 2008, Capella Hotel Group had 12 hotels under construction and eight in development, but by March of 2010, that number was down to zero, reported Forbes. At the time, some had written both him and his company off.
This year, with 14 hotels open and nine more under development, the Capella Hotel Group has enjoyed a lively recovery during the Great Recession.
He is a charismatic leader and entrepreneur with a laser-focused understanding of how to create loyal customers by raising expectations for service and consistently meeting them.
“We were inspired by the guest; what does the guest want in a large hotel,” said Schulze in an interview with Hotelier Middle East magazine. “The number-one comment from guests was ‘friendly, caring people,’ so we concentrated more around friendly caring people, which meant that we had to concentrate more on selecting people, we had to concentrate more on training. That was, of course, the secret: not to take it for granted that the staff know everything but to continue training. We really made an effort for continuous alignment to the company thinking, and the company thinking was aligned with the customer thinking.”
His success is all the more remarkable when you consider his humble beginnings. Growing up in Germany during World War II, just eating and surviving was a challenge. With little to eat, he and his family would go into the forest foraging for nuts and whatever else they could find.
“At [age]11, I insisted on working in the hotel business and nobody knows why,” he said in an interview. “The assumption is I knew there must be food in there. At 14 I left school to go to work as a bus boy in a hotel.”
He quickly realized that those who were excellent in their jobs were recognized and rewarded. He coined the phrase “ladies and gentlemen serving ladies and gentlemen” in an essay he wrote at 15 while in hotel school. It has been his motto ever since.
“There are three things every customer wants, and they all want the same thing, and you better have processes and attitudes to provide them,” he said during a recent commencement speech.
The most important quality that a company needs to earn is customer loyalty. This includes trust in the company and its product. You earn that trust by delivering on three very important factors, he said.
These qualities, which must be delivered consistently, include:
- The product must be defect free.
- It must be timely. “You want it when you want it.”
- Service must be delivered in a courteous manner. “You want people to be nice to you. That’s the piece that loyalty much more than any other.”
He also noted that customer’s form relationships with people not companies. He explained that “you build an opinion based on the relationship with a human being. The caring piece drives satisfaction more than anything else. Service starts the moment they make contact with you – not three seconds later. Any time a customer asks you for something, that’s an opportunity to convince them to continue dealing with you.”
Barry Sternlicht
Remove the areas where you can make mistakes. –Barry Sternlicht
It’s a rare business person who can follow up one big success with another. Barry Sternlicht was always determined to do just that.
The founder and CEO of Starwood Capital Group launched Starwood Hotels & Resorts in 1995 at a time when the design hotel trend was just a small niche in the hospitality industry. Envisioning a much broader appeal of that trend, he launched W Hotels in 1998 and changed the hotel industry forever by proving that a design-conscious guest experience could be sold to the mainstream public.
Over more than two decades, he has structured investment transactions with an asset value of more than $40 billion. Today, Starwood manages about $12 billion of investor capital on behalf of its high-net-worth and institutional partners.
As CEO of Starwood Hotels, Sternlicht managed hotel brands covering every market segment, including one of the earliest soft hotel brands, Starwood Luxury Collection.
More recently he launched the sustainability-focused 1 Hotels brand. The purpose of the eco-sensitive context is really primarily to create a platform for guests to share that discussion with like-minded people, he said in a recent interview with Skift.
“After doing W Hotels and St. Regis, I was thinking about what we were going to do with another hotel brand,” said Sternlicht. “I was thinking how great it would be to mix business with something that’s social, that helps the world.”
The concept grew out of his own interest in the environment and a feeling that it would prove to a viable concept for the traveling public. It would not only engage guests and employees in a bigger purpose, but it would differentiate the brand from other high-end hotels as well.
His ability to tap into the feeling and desires of the public – for a product that meshed with their own ethics – has proved to be a winner.
“I think what we are talking about is improving the world one bed, one towel, one plastic bottle that isn’t in the hotel at a time,” he said.
Sternlicht has also been a leader in meeting the desire of younger guests, in particular, to use technology. This includes letting them use a mobile device to check in.
“Then, we have quite a bit of proprietary technology in the room, which allows the guests to do lots of things from a tablet in the room,” he said.
During their visit, the guest can use a mobile app called Field Guide, which can control your stay from start to finish. It controls everything in the room from the TV to temperature. Guests can order room service, contact the valet and even send a text down to the front desk to request various products.
This move to technology will also allow the hotels to keep guests happier, by eliminating mistakes. For service’s sake, we’re eliminating areas that traditionally have tons of mistakes. Instead of calling the front desk to request an item and then waiting fruitlessly because someone forgot to make it happen, technology such as a text increases the chances that won’t happen.
“At least 50 percent of hotel guests encounter a problem during their stay,” he said. “When I was CEO of Starwood Hotels, that was the statistic that astonished me. The way to remove those is to basically remove the areas where you can make those mistakes, right?”
Sternlicht’s Takeaways
- Some of Sternlicht’s guiding principles for success include:
- Connect with guests by offering products that appeal to their ethical sense.
- Use technology to reduce mistakes.
- Don’t repeat what you’ve already done; find a new concept.
Ian Schrager
Have a very distinctive and unique product. –Ian Schrager
It’s a measure of just how important Ian Schrager is in the world of hospitality that the CEO of Marriott would say the company needed “his permission” to open a new boutique hotel brand.
As the chairman and chief executive of the Ian Schrager Company, a hotel and real estate developer, he has had a long and varied career. It included founding the legendary night club Studio 54 and later the Morgans Hotel Group. These hotels — Morgans, the Royalton Hotel, the Paramount Hotel and the Hudson Hotel — delivered a high level of boutique luxury and solidified Schrager’s reputation as a true hotel innovator. Schrager left the Morgans Hotel Group in 2005 to establish a hotel and real estate development firm.
Schrager is often credited with pioneering and developing the boutique hotel concept.
More recently he partnered with Marriott International to launch Edition and the mid-priced chain Public. Public debuted in Chicago, while Edition launched in Istanbul and London, and is being rolled out worldwide.
His Public hotels are designed to appeal to millennials, as well as Gen X and Y, who care less about traditional luxury than form, function and value. Edition is more luxury focused with bigger rooms than some of the earlier boutique efforts.
The hotel market these days is strong and getting stronger. Yet, he is a developer who perhaps worries a little less about what the economy will be like when he opens. The most important factor is the product, not the market.
“I never do a project based upon the market,” said Schrager in a New York Times interview. “I don’t time the market. The best way to deal with the vagaries of an economic cycle is to have a very distinctive and unique product.”
The alliance with Marriott has allowed him to take a new direction in the hotel industry and go big in a way he hasn’t been able to do before.
“I wanted to do something on a much, much larger scale and that was much more accessible to a larger group of people,” he said.
With Marriott he seems to have found an ally that understands how things should be done.
“They’re trying to give the people an alternative, unlike anything in the marketplace,” he said in an interview on The Charlie Rose Show. “It’s something really unique that separates itself from everything else. When you think outside the box, you see things other people can’t see. When you present it to other people, your’ presenting something they’re not used to seeing. If you’re lucky enough to have it resonate with them, then you have a huge hit.”
It offers him the opportunity to blaze a new trail in an industry that often innovates and then settles into a period of sameness.
“What happened is what always happens: all the hotels have started looking like each other,” he said. “But in different colors. People have been visually bombarded with ‘good design’ – the entire industry is doing it. Today it is all about simplifying things. Our process with Edition is to edit, to not go over the top, to be restrained in design. That way you create something that discriminating people will respond to.”
It can be hard to define just what that critical difference is, but it’s easy to know it when you see it.
“You don’t have to completely reinvent the wheel to be successful – the key is to do whatever you do in an imaginative, original way,” he said in an interview with the Huffington Post.
When it comes to success, the right vision has to also be partnered with an undiminished desire to keep going and reach new heights.
“I’m still just as hungry as I’ve ever been,” said Schrager. “I want to keep doing it and breaking new ground and show people there are new territories and rules to break.”
Stephen Bollenbach
Don’t underestimate the power of leadership. –Stephen Bollenbach
When Stephen Bollenbach was president of the Hilton Hotels Corporation, he often would make $1 bets with other company executives about the price of Hilton’s stock. He would stuff the dollar bills representing those wagers into the frame of a picture – of him and Barron Hilton, the company chairman.
His outsized success over the years created gargantuan expectations about what could be done in the hotel industry. During his long career, he was recognized as one of the world’s leading authorities on the hospitality and gaming industries, financial affairs and transactions.
The son of a milkman, he grew up in Southern California and got his start in business working for legendary business figure Daniel K. Ludwig. He credits Ludwig for much of his business and financial acumen. That knowledge and skills were acquired while he held a series of financial and management positions with the Ludwig Group, including vice president of finance and assistant to the COO between 1968 to 1980.
His work for a variety of hotel companies helped prepare him to work for Barron Hilton, the hotel company’s chairman and biggest stockholder and the son of the company founder, Conrad Hilton.
He was named president and CEO of Hilton Hotels Corporation in February 1996 after serving as senior executive vice president and CFO for The Walt Disney Company, where he was instrumental in Disney’s $19 billion acquisition of ABC/Capital Cities. Prior to joining Disney, Bollenbach was president and CEO of Host Marriott Corporation. From 1990 to 1992, he was also CFO of the Trump Organization, where he is credited with helping rescue Donald Trump from some sticky financial problems.
Bollenbach served as a director of Hilton Hotels Corporation and chairman of Park Place Entertainment Corporation until his retirement.
As his dollar bets on stock prices indicates, Bollenbach has always been interested in winning, but winning at the long game. Like pro baseball player, Bollenbach has frequently said he is not out to hit home runs, just to win ball games.
“My approach isn’t trying to measure success by the number of transactions,’’ he said. “It’s kind of a lousy measure. The shareholders are interested in value for the company.’’
Doing an acquisition is often quite easy, according to Bollenbach. “The hard thing is making sure you don’t overpay, and the second hard thing is managing what you bought.’’
He is skilled at finding synergies between organizations as he did when he shepherded the merger of Disney with Capital Cities, the parent company of ABC. He said at the time that “the stars had aligned” in terms of capital markets, interest rates and regulation. It was a deal that many said couldn’t be done – until he did it.
One of the keys to success when it comes to expanding by acquiring other companies is the quality of its leadership.
“One of the key elements we looked at when we thought about this merger acquisition [of Capital Cities]was the management,” he said in an interview. [Disney chair] Michael Eisner worked there for 10 years and knew the management.”
Bollenbach’s Takeaways
Some of the strategies that have made Bollenbach a success are:
- Know all the factors that can make a deal work.
- Understand the strengths of a company, especially its management.
- Play to create long-term value not just big headline-making deals.
Mike Leven
Changing the course of history… –Mike Leven
Mike Leven has had more than a little success since he started his career in 1963 at the Roosevelt Hotel in New York City. He has helmed chains such as Days Inn and Holiday Inn, started his own hotel franchising company and turned around the Las Vegas Sands.
His idea of retirement was becoming CEO at the Georgia Aquarium, one of the largest attractions in Downtown Atlanta.
A self-proclaimed “hotel sales guy,” Leven credits his success to his ability to develop relationships and always understanding the value proposition between two parties.
One factor that has been a hallmark of Leven’s career has been his willingness to give to the industry in which he made his fortune. He’s well-known for helping found AAHOA, the trade association that gave a new and powerful voice immigrants fighting to grab hold of the American dream through hospitality.
“Lots of people can make financial turnarounds and grow businesses, which I’ve done,” says Leven of helping found AAHOA. “But when you have a chance to establish an idea and an organization that changes the course of history and changes the course of many lives, well that stands out as a very important accomplishment to me.”
He rates his involvement in the organization as the most important accomplishment of his life. He said in an interview, “rarely do you have an opportunity to do something that is particularly different and important.”
Among his many business positions have been president and chief operating officer of the Las Vegas Sands Corporation; vice chairman of the Marcus Foundation, a philanthropic organization founded by Bernie Marcus, co-founder of The Home Depot, Inc.; he was the chairman and CEO of U.S. Franchise Systems, Inc., which franchises the Microtel Inn & Suites and Hawthorn Suites hotel brands.
