In Partnership With Chris Nassetta, Hilton CEO | American Express

I'm ready. You know I don't do anything rapid, but let's do it. We'll try.

Moonshot by Albert Bourla. He sent it to me and, you know, it's a great story. I'm not done with it. I've been getting through it, but it's just an amazing story of innovation, how they totally reinvented the process of how they make a vaccine from a process that could take 5 or 10 years to a matter of months. That's really inspiring.

Bahamas. We have a place there and I have a lot of good memories there and I think it's one of the most beautiful places on earth. If you like water, sand, all the sun, all those fun things, which my family does and I do. It's a beautiful place.

Oh, since I was a little kid. My father loved to fish. When I was a kid, the fishing in the Bahamas is some of the best in the world. So, he would take my brothers and I down to fish. Probably been going since I was five, but I'm not going to tell you how many years that is because then they could calculate how old I am.

The Hyatt Regency in Nice. I know that's a surprising answer.

In the Mediterranean for a family holiday to celebrate the graduation from high school of my youngest of six daughters. So, we did a big trip all of us together with my mother and father-in-law. The trip started in Nice and we have a great hotel under development, but it is not open. So we stayed at the Hyatt Regency, which was nice.

Yeah, we like to check the competition and I'm quite good friends with Mark Obermeier as you know on the side too.

Absolutely.

I don't normally binge, but I did binge Ted Lasso.

Oh, yes. I think there's going to be another season.

And I think there's going to be another season.

My first job was as an auditor for Arthur Andersen in Houston, Texas auditing oil and gas companies.

Exactly. Me neither.

That I should focus more time doing the things I love.

Mixed nuts. It's my go-to. It's a nice snack.

Yeah, it's a nice snack.

I think so. Nothing against Pringles so anybody's watching.

I did. I grew up in Arlington, Virginia right outside of Washington, D.C. I was born and raised here. I was a very industrious person. When I was a kid I had paper routes and lawn mowing businesses, snow plowing business, painting business. I always had something going on. My parents are fabulous. They're both still alive and they instilled in me what their parents instilled in them, which is hard work. You get what you work for and they were very disciplined about having us understand that we needed to be out there and doing things. So, I was always active and always had an interest in business generally and those were little entrepreneurial micro businesses. As I grew up my father was in the real estate development business. So, I went to University of Virginia, got a degree in finance, got out, got into the real estate development business working for a very large local company, Oliver Carr. Then I got in the private equity business with a partner during the S&L crisis, which was an amazing five-year jaunt in my career of learning and opportunity given all the dislocation that came out of the S&L crisis. Then my partner and I got recruited during that to go to a company called Host Marriott, now Host Hotels, the largest public owner of hotels in the world. We thought, we have this great thing going, why would we do that? But it was a really interesting time to get into the hotel business. I had had some history in it when we were in our private equity business. We had done work in the hotel area. I had worked in the back of house in summers as a kid in the hotel business and we both said, why not? This is a really interesting time given the dislocation and we went to Host and took what was then part of the breaking apart of the Marriott company, sort of good co bad co. We were the bad co part, but we thought this will be a real opportunity, a challenge and an opportunity. I was there ultimately with him as CEO, then myself as CEO after he retired after 4 years. We built that company with a lot of help, with a lot of hearts and souls. Fabulous company, Fortune 500, S&P 500 company, real leader in that segment of the industry then and to this day. Throughout my career I worked in and did lots of different ways. When I was in private equity, my own private equity shop, I did some work with Blackstone. When I was at Host, we bought and sold and did a big merger deal with them where they ended up as our largest shareholder and were involved in the board. When they bought Hilton, they knocked on my door and said, 'Hey, we think you've been training your whole life to do this. You've got experience on the branding and the real estate and finance, you should do this.' I said, 'That's an interesting idea. I don't know. I've got a wife, six little kids, they weren't all in school and the idea of moving to LA and pulling them all out of a very comfortable ecosystem seemed a little bit crazy.' But the more I thought about it, the more I talked to my wife, the more I realized this is an opportunity of a lifetime. So we took it and here we are. My roots in hospitality, I cared a lot. I started in the toilet because if you go way back, when I was working summers in high school and college, I worked in the back of house of hotels. I say my career started in the toilet because when I first started out, like most jobs, I was basically the lowest person on the totem pole in the engineering department. That meant you got all the worst jobs in the beginning. So I got a lot of plunging of toilet jobs. But it was a fabulous way for a young person that was interested in the business, didn't really understand it or the whole ecosystem of what goes on in a hotel. As a customer, you see a hotel and hopefully we make it really lovely and a great experience. I know we're not perfect. We do a pretty darn good job. But there's a lot of stuff going on behind those walls. There's a village of people, a family back there that are together morning, noon, and night and weekends and holidays. Until you've been back behind the walls and lived it and breathed it with people, you don't understand it. So it was a fabulous way as a young person interested in the industry to get a real sense of what makes it work. It was unbelievably eye-opening. When I started I was 16 or 17 years old, very impressionable. There's a lot of stuff that goes on behind those walls. As a young person it was eye-opening, but it really opened my eyes to the opportunity of just how complex and interesting and intellectually stimulating making all this come together really was. If I hadn't done that, I'd never truly have appreciated coming at it from a finance and development perspective.

We did. Yeah. So I'll let you ask the question.

You're an empty nester.

I am a very newbie empty nester. When I say newbie, it was last Sunday I dropped my daughter off. She's an athlete. She's going to College of Charleston. She plays soccer, so they go very early. I think the short answer is you'll have to give me some help on this. For us, we have six children. So, it's been 30 years. We started this journey with our oldest who's just about 30 between pregnancy and all the way through the last going to college has been a little over 30 years. So, we're going to kind of figure it out. My wife and I have been talking about it. She's got lots of interests and things going on and obviously I run a big business and it's a travel business. So, I travel a lot. I hope the next chapter she can join me in more of that. Certainly my family's been traveling together all over the place, but not particularly frequently just because the kids still responsibility and Paige was very committed to those children. So, I'm hoping that the next chapter she can join me and enjoy some of the unbelievable places and things I do and people I meet around the world.

It's funny. I travel a lot. So, there's not many places I haven't been. It's not a bucket list, but the last trip that I was supposed to take when everything shut down in the world pre-COVID in March of 2020 was our brand new Waldorf Astoria in the Maldives. It was literally our president of Asia Pacific Alan Watts. We were holding on it was on the calendar and we both eventually said there's no way you can go. You'll never get back and they're going to close all borders. It had been recently opened. It is one of the top, I think it is the number one resort in all of Asia Pacific. It was rated by Travel and Leisure I think top three in the world. It's extraordinary and I've seen a million pictures of it. I've been to the Maldives a couple of times but not when this was done. So I don't know if it's bucket list but I'm dying to see it.

Yeah Mark's fabulous.

Why don't you don't forget to invite me. Yeah and Mark if you're watching this which I hope you are, don't forget. I always say that to my team when I'm in travel business. We have all these fun events like they forget to invite me. They just send me out to do all the work and then all the fun events somehow I get left off the invitation list. So Mark, Maldives if you guys do a big celebration, make it happen. I want to be there.

Yeah, would love to. Nothing would make me happier.

No, we're easy. We're pushovers.

It's exactly what you would want to happen in a partnership in the sense that we transformed what had been a good relationship, a very long relationship, but I would argue not a partnership. I would argue maybe before my time, maybe before I was born, it was viewed as a real partnership. I think there are a lot of reasons behind it. We had two sort of dual programs which made it hard for anybody to fully commit. But my strong impression was it was a transactional relationship. It wasn't a partnership. And I think in the end that's less fun. It's less rewarding for both sides because nobody's fully committed. So, my objective with Mark leading the charge was we worked for a number of years to get ourselves in a position where those two relationships were co-terminous. That was always the problem is we couldn't go to sole source. So, 2017 was the year after a decade of managing that situation where we could go from two to one. We weren't sure we wanted to as you know. But what stood out in the process and it started with Ken Chenault when he was CEO and it moved to Steve Squeri who's an amazing leader and a great friend, both great leaders and friends. We had a chance dinner where I was seated next to Ken and we were talking. We said, 'You're the two of the most iconic brands. We've been partners forever. You go back to the '60s, the top three brands in the world at that time were Coca-Cola, American Express, and Hilton.' And yet, we have this relationship which is decent size, but we're really not maximizing it. So I said, 'Listen, we have an opportunity to do something different.' So, to his credit, to your credit, and because you were deep in the middle of it, you were on the tip of the spear the whole time, and a lot of other folks on your team, including Steve behind the scenes before he was CEO, he was very involved. And an incredible team on my side. We said, 'All right, how do we make 1+1=3?' I would say 1+1 was equaling 1 and 1/2 in our prior relationship. So, it was a hard negotiation because we had to get ourselves to a place where we would believe. Going sole source is wonderful if everybody's committed. Going sole source and not having any diversification when you don't feel comfortable like commitment is a very dangerous thing. It took a long time because we had to convince ourselves after years of being disappointed, probably both ways, in what the relationship was versus what it could be, that we really that all of us on all sides, not just you guys, but Hilton as well, would be really committed to making it a partnership. The good news is, we did it. What better brand to work with in the travel space, forget co-brand, just the broader travel space, than American Express. We think the same for you on our side. We've really taken what was a transactional kind of relationship and made it a partnership. I think testament to that is during COVID, which our business was beat up a little, ours was bludgeoned. We went to nearly zero revenues. And yet we figured out a way to lean in and the relationship that was outside the boundaries of the technical contractual relationship because we were partners and we made the right investments during COVID, and now look at what's happening. This thing is performing, I don't want to speak for Steve, he did tell me it's one of the best performing, if not the best growth rate of all your cards. I hope that's right. I'm sorry, Steve, if it's not, but anyway, it's performing really well for both of us. From our point of view, it's great for our system because it's profitable, but most importantly, and that's the reason we did it, our customers love it. The reason to do a co-brand, of course, in the end you want to be able to make money doing things, but the real reason we wanted to go to sole source was to create a value proposition for our customer that they'd want to sign up. And when they ended up with that card in their hand, it was a value proposition they loved, and as a result, they would give us more share of wallet. That's exactly what's happening, which is the reason we're both benefiting is because more people want it, more people are staying with us, they're spending more money. It's working fabulously well in that regard.

And I want to give you credit because you have been on the tip of the spear with our teams, with me, and being a voice for us and an advocate for us. And I want to give a ton of credit to Steve because it is about people. In the end to have great partnerships, it's really hard to do without great personal relationships. The business relationship is great. The personal relationships are like they've never been. And maybe again before I was alive in the beginning maybe it was like that, but it hasn't been like that for decades and decades. So when you do have a problem, you have somebody to call that, each way, where you have a real relationship that matters. That's how, you know, contracts are great, we have them, we fight over them, but in the end you got to have trust. Things go wrong like they are now, but things go wrong like they did in 2020. When things go wrong, we have to be able to come to the center of the table and really have a conversation about it. So we've had a long relationship. We look ahead and business is all about evolving. Partnerships are about what we can do not only today, but as we think about what the customer demands are in the future. When you think about the relationship with American Express and you look ahead, what do you see as opportunities for continued growth in our partnership?

More than anybody.

You are the original experiential brand in the space, and in the end, I've said this to you and Steve. Economically, it was hard in 2017. There were a lot of people who wanted to pick us to go sole source with them. And I'll tell you, I made the decision that in the end, it's all the travel assets, and it is the experiential side. It is that you all are very much a travel company. And those assets and that history, properly tapped into, I thought was super powerful.

It's not proper to say you, we. American Express and Hilton did that together.

What drives me is my philosophy in life has always been you do well by doing good. And it's a cop-out to think that you shouldn't do both, and that they're not both inexorably linked to one another. Think about it. As a hotel business, we have 7,000-plus hotels. That means we are at the epicenter in 7,000 plus different communities. Hotels are generally at the center of most communities in the sense of what happens. People, it's part of the supply chain, labor chain, it's where all the events and where people come to laugh and cry. So we believe as part of our founding purpose that we have an incredible responsibility to do the right thing in our communities. And by the way, everyone that works for us in those communities is part of that community. So it empowers them, it unites them, and it inspires them the more that we do good things in the community. Probably one of the proudest moments I've had here was what we have done together twice, which I think is a great story. We were getting crushed in March of 2020. Our business was almost 100% down in revenue. It was 90-something down. Effectively, we were shut down. I was reading the paper one Saturday morning digitally, it was talking about all the first responders all over the country and this piece was in New York and they were sleeping in their cars so they didn't want to go home and infect their family. I thought this is crazy. We're getting our teeth kicked in, but the one thing we have is a lot of hotel rooms. I said we need to do it. Now, we don't own them, we're a capital light business, so we can't just give away things that we don't own. So literally that morning I called Steve Squeri and I said I have a crazy idea. I called him before I even called my team, which made them mad. I said I want to give away a million rooms. He said, 'That's interesting. How would it work?' Within 5 minutes, Steve called me back and said, 'We're in. Split it with you.' I called my team and they said, 'Oh my god, we're dying. We can't.' I said, 'I want to do it Monday. It's Saturday.' They said, 'We can't.' I said, 'We're going to do it.' They said, 'We're getting crushed.' I said, 'This is the thing about leadership and a value system. We have to be part of the solution here. There's nothing we can do about the fact that we're empty. There's no demand for us to go get. So, let's put our time into doing something that makes a difference. All these first responders need us. Let's house them and let's feed them.' The team said, 'Okay, let's go do it.' Monday morning or Tuesday, we launched it. We did the same thing, similar story.

And do it by text. Yeah, to you.

Wouldn't believe it. I sent a text to Glenda and they're in. I said, that's great again. Again, we had millions of refugees leaving the Ukraine. We have a big business in Europe. We have capacity.

Well said.

Yeah.

Do well by doing good.

And that's how I live my life. And that's how I want our company to think about everything. We have shareholders. We should make sure we're attentive, we're fiduciary, it's returns to all the pensioners and everybody that invests in this company, but the best way to do it is by doing good.

There's only one partner that I'd put above you. And I'm going to have to put her above you and that's my wife. I will get choked up so I won't do it. She and I met when we were 16.

We met in high school. She moved here in my junior year and we started dating, we went to college, sort of went different ways for a while, came back together. So we've been together for a long, long time. We had six beautiful, intelligent, strong daughters together. And I would not be the person I am without her.

Oh, absolutely. We love you guys. You're the best. Thanks, Glenda.