Name: Hyatt Hotels CEO: 'Leisure demand has never been stronger'
Uploaded: 2021-09-30
Duration: 9 min 5 s
Description: Mark Hoplamazian says Hyatt is profitable and 'on a good path.'

Mark Hoplamazian says Hyatt is profitable and "on a good path."

Hyatt Hotels CEO: "Leisure demand has never been stronger"

Mark Hoplamazian - CEO, Hyatt Hotels Corporation

Leadership

mark, Great to see you again. And to get your update on Hyatt hotels, you know, the last time we talked was at the very beginning of the pandemic. And you described the situation as quote, a very, very tortuous time now, a year and a half later, House Hyatt doing Well. Um we've had one remarkable summer. I can tell you that leisure demand has never been stronger. Our resorts performed well ahead of 2019 levels. Business travel started to come back as well a bit. Um and I would say um the other very strong market over the course of time has been china and I think um in china's case they've implemented very harsh restrictions on travel. So that's actually changed significantly. And in the US we're starting to see bookings come off of it as a result of Delta. But we do think that these are temporary effects. We don't think that the Delta effect, so to speak, is going to persist for very long. I also think that any time you lived through a crisis with other people, the closeness that comes out of that is very, very strong and very meaningful, very powerfully meaningful in life. So it feels like we've all been drawn closer together. And and so in that way, I would say that we've never been stronger. Um and looking to the future. Well, I think that the turnaround that's going on at high, it is remarkable, especially when you look at the numbers and I think it's worthwhile to share it with our audience uh in the first year of the pandemic. Hyatt revenues plunged 58% profits down, almost 200%. And you suspended operations in so many of your hotels, what was, what the most crucial action you took to save the company? I think that the key thing that we did that really helped save the company if you will is um, is a real focus on our people and who were going through a very difficult situation of layoffs and separations. We set up a care fund through which we distributed a lot of money. We help people find new jobs. We kept the network alive so that people felt supported and connected with the hope that we would bring them back all of those things that were around the people dimension of our business actually is the thing that most, uh in the most pronounced way helped save the business. And what about on the financial side are most of your hotel is now up and running and how much longer before high it is profitable? Well, I'm thrilled to tell you that uh, we uh, we were profitable in the, in the second quarter. So I feel like we are on a good path to re establishing black ink instead of red ink. And I would say that the sentiment at this point is that we have a great, strong platform, a stronger platform on which to build into the future. Well that all sounds great and it sounds like things are going well for high it, but you know, we're still getting daily reports on the risks of the delta variant. There are still so many people who are not vaccinated and business travel, which is really critical for the hotel business has been slow to pick up. How much do these factors really concern you? Well, uh, you know, the one thing that we've learned over the last year and a half is um, you've got to just continue to live in real time, be present uh, and be in the moment because things are changing rapidly. And that's true right now. So we had a very, very pronounced demand surge in the summertime through leisure travel. We saw a tremendous level of demand in china up until the time that um, the country took very, very significant actions to squash the delta spread. And I think on the, on the business travel front, I also experienced a lot of people who did take trips and did attend conferences. We included, um, that they're human experiences. That was really positive. And yes, it is also true that the delta variant has delayed and deferred. Um, convene ing's and business travel for some period of time. But I think that, you know, we, we are as a, as a, as a world, as a, as a race. Humans are quickly getting to the point where you have to think about coping with the coronavirus as an endemic part of life. Let's talk a little bit about what's next for high it. Tell us about your acquisition of Apple leisure group. This uh cash deal for $2.5 billion it's a collection of luxury resorts. Why is this important to Hyatt and why? Now we're very excited about Apple leisure group. The quality of the portfolio is very similar to high, it's the actual profile of their customer base, looks very similar to high, its existing customer base. And In this one acquisition we're doubling our resort uh presence around the world. And we are also increasing our presence in Europe by 60%. So it's a huge move in Europe and European leisure right now has been never been stronger. I was there two weeks ago and the demand for leisure for holiday travel this year is off the charts. It's unprecedented levels of demand. Um So there's a great deal of enthusiasm and optimism about the future there. So what is your post pandemic vision for Hyatt and how does this deal fit into that? I think that is a segment, leisure is critically important. This acquisition of Apple leisure group will take us over 50% of our total purpose of visit will be leisure trips. Um and I think that that's a great balance to have. That business travel continues to be very important and it is equally balanced with leisure in our portfolio. Once we close the apple leisure group acquisition and I think that that's a wonderful balance but staying focused on that higher end customer and uh owning brands that can be grown globally are really how I think about the future for Hyatt, you know Mark, one of the comments that you made when we spoke a year or so ago that really stuck with me was that you said that um during this pandemic that you had to make quote painful and unimaginable decisions and you said that it was the most challenging period of time that you've ever had in your professional life. Now as you reflect back on all the disruptions from the pandemic, what would you say that you have learned about how high it and other companies for that matter can better prepare for the risks of these so called black swan events like the pandemic. I think that the key is ultimately resiliency but that's too glib, I think the question is what underlies resiliency and I think um really elevating the practice of empathy and staying very close to your people um and focusing on well being holistically are the things that uh that is actually what creates strength because you need strength and resiliency throughout your colleague base um focusing on well being and practicing empathy to really understand what's happening with people is the best way to actually have a resilient enterprise? So now that you've come through this crisis, how has it changed the way you're leaving Hyatt and how is it maybe change some of your leadership beliefs and for me personally, the thing that I'm working on currently is to make fewer decisions um to be present, to ask questions and to help provide some context for the things that I think are most important for us to focus on. But for me to actually not show up as the authority or the person to whom people differ for decision making, because I've seen the power of enlisting and bringing those who are closest to our customers into decision making roles. You know, I can see business schools making a case study about Hyatt hotels during the pandemic and uh you know, your crisis management strategy. If you were teaching that class, what's the most important leadership lesson that you'd like to get across to the students? Because after all, these are going to be the young business leaders of the future. Given my personal experience of this last year and a half, I would say be very clear minded about your own state of well being. Um I personally went through uh significant challenges over the course of this past year. Um there were physical manifestations of the stress and anxiety that I was feeling. There were uh emotional and psychological and mental challenges that I experienced and I think you have to be really clear minded about where you are, you know, the airlines always say put your own uh oxygen mask on before you try to help others and that is absolutely true in life. So I would say, I know it sounds very simplistic, but you'd be surprised how few people are practiced at that and really spend time doing it. So. And I found it was critical in being able to be an effective leader, um, knowing where I was and what I needed at any given moment.