HIP HOTELIER LOOKS TO LIFE BEYOND ONE-NIGHT STANDS
by JOHN ARLIDGE
The Sunday Times (London)
December 9, 2012 Sunday
Mark Hoplamazian is embarking on the biggest expansion in the Hyatt
chain’s history. But can he make his Andaz brand so sexy you have to
stay there?
Very sexy. Very provocative,” grins Mark Hoplamazian. “But not a
one-night stand. This is someone I want to get to know better.”
It’s the morning after the night before in Amsterdam and, over a
religion-changingly strong cup of coffee, the global boss of Hyatt
Hotels is trying to explain himself.
Is he talking about one of the models he met at the party he hosted
the previous night, the ones wearing black patent “bitch stack”
stilettos? Or perhaps he’s talking about the waitress in the tight
white shirt who was practically force-feeding guests Ruinart champagne
from a bottle bigger than Poland? “No,” he grins. “It’s Andaz.”
Andaz, his wife will be relieved to hear, is not a woman. It’s the
name of the American hotel group’s new attempt to shake off its staid
image and establish its own “boutique” or “design” hotel brand. As
boss of Andaz and the 500 or so other hotels Hyatt runs around the
world, it is Hoplamazian’s job to loosen his collar and get down with,
er … well, with whom, exactly? “It’s hard to tell who’s going to
come through the door of an Andaz. I guess we attract more original,
creative types than we do at Park Hyatt,” he says.
To encourage them, Hoplamazian has hired the Dutch designer Marcel
Wanders – “the Lady Gaga of the design world”, according to The New
York Times – to create Andaz Amsterdam, formally opened last week. It
is full of Wanders’s witty modern take on Delft, all blue and white
crockery and chandeliers. Video art adorns the walls and there are
quotes from football great Johan Cruyff in the loos – obviously.
Big companies are bad at being cool.
Look at Microsoft. And Hoplamazian is an unlikely hip hotelier. His
Armenian surname translates as “one who doesn’t dance”. But there
must lurk something of the hipster behind the knot of his Brioni tie,
because Andaz is working.
Try booking into the two New York Andaz hotels this week at a decent
rate. You can’t. They’re either full or so busy a basic room will
set you back $500 (£310). It’s the same in Amsterdam, Los Angeles,
San Diego and London, where Hoplamazian took over the Great Eastern
hotel at Liverpool Street from Sir Terence Conran and turned it into an
Andaz. The success has spurred Hoplamazian to open new Andaz properties
in China, India, the Caribbean, Hawaii, Costa Rica and Mexico.
Boutique or design hotels are the fastestgrowing sector of the
$6trillion global hospitality industry. Wealthy travellers in Europe
and America seem to have an endless appetite for a lobby “scene”,
signature scents, hot staff and cool nightclubs, and baffling taps in
the bathrooms. Newly wealthy consumers in emerging markets, notably
China, Russia and India, crave a taste of what they think is the
latest western edginess.
If Hoplamazian gets Andaz right, Hyatt will not only have pulled off a
trick no other big hotel group has managed; he will have transformed
the company into a truly global player, covering all sectors in all
markets on every continent.
A decade ago, Hyatt was just another conservative global hotel outfit.
Snazzy folk liked the Park Hyatt brand, made famous by Scarlett
Johansson and Bill Murray in the film Lost in Translation. Regular
folk liked the reliability and low prices offered by brands such as
Hyatt Regency. But it wasn’t a big company playing big.
Hyatt’s operations were scattered across 53 private holdings
controlled by three generations of Chicago’s fabulously wealthy
art-loving Pritzker family, who are big donors to their city’s most
famous son, Barack Obama. The Pritzker architecture prize is named
after the family.
In 2004, some family members decided to cash out. They asked
Hoplamazian to help. He was the obvious choice; he had been in charge
of the family’s large business and investment portfolio for years
and had become so close to the Pritzkers he was almost an honorary
family member.
“In effect, I ran the family office,” he recalls. That helped him to
navigate the family’s fractious politics and weave Hyatt’s multiple
strands into one business.
Tom Pritzker, executive chairman of Hyatt, reckoned Hoplamazian had
made such a good fist of the restructuring that he offered him the top
job. Hoplamazian was stupefied. He had no experience in hotels other
than a stint on the graveyard shift at a small two-star hotel on the
Edgware Road in London when he was a student for six months at the
London School of Economics 30 years ago. “I was the only one on duty,
so I was security, front desk, gofer, and on one memorable occasion,
plumber. It was grim.”
He agreed, however. His first big task was to lead the company’s float
in 2009. Today, the Pritzker family holds about 60% of Hyatt’s equity
and controls more than 75% of the voting power through a special
class of shares.
Next, he turned to improving his products.
He may have been “ignorant of lodging” but he knew his way round
numbers and systems. He studied economics at Harvard and worked as
an analyst, banker and consultant on Wall Street before going to
business school at Chicago University.
He wanted to know more about Hyatt’s staff and customers, so he
introduced new research techniques and created “mock up” hotel
laboratories around the world to test new products and services.
These revealed that guests wanted a less formal style of service, so he
gave staff more freedom to break the rules. “We don’t want our people
following a playbook or a script. We encourage them to do whatever they
think it is the guest requires in the way he or she wants.” At Andaz,
there are no check-in desks: arrivals sit in a library lounge, enjoying
a free coffee, wine or soda, while staff use iPads to check them in.
He found customers hated being nickeland-dimed. At Andaz all minibar
soft drinks, local phone calls, wi-fi, and wine, tea and coffee in
the lobby are free. Surveys showed regular customers wanted a more
exclusive loyalty programme, so he rejigged the rewards scheme to
offer longer stays to regular customers.
It has worked. Hyatt has grown into a seven-brand company – Hoplamazian
launched the cheaper Hyatt Place and Hyatt House brands – with $4bn
of annual revenue and a $6bn market value.
It’s still much smaller than its rivals. Hilton and Marriott each have
almost 4,000 properties, while Starwood operates more than 1,000. But
being small can be beautiful.
After the financial crisis, Hyatt did not have excess capacity,
unlike many other groups. What’s more, the firm carried little debt
and has reserves of $1bn today. “We have a very strong balance sheet
and great flexibility,” Hoplamazian grins.
You might think that with the West still mired in recession,
Hoplamazian would sit tight and wait for an upturn. Quite the reverse:
he is embarking on the biggest expansion in the company’s history,
opening almost 200 new hotels with a total of 40,000 rooms in the
next five years. The cost will exceed $10bn. Three-quarters of the
new properties are outside America and half will be in China and India.
Imagine his travel itinerary and weep. “Oh, I can handle it,”
he smiles.
He puts his punishing work ethic down to his upbringing in suburban
Philadelphia.
The youngest of five children, he was 12 when his father Harry,
a landscape designer, died from a fourth heart attack at the age of 53.
“As a 12-year-old, you don’t really have great context for financial
security.
No matter that your mum is saying everything is fine and you shouldn’t
worry about the future, I always had financial security on my mind.”
Britain will benefit from Hyatt’s expansion.
Hyatt has just refurbished its grandest hotel, in Portman Square in
London. It spent £26m buying the Hyatt Regency in Birmingham, with
another £6.5m to be spent renovating it. Hoplamazian is also looking
for a site for the first Park Hyatt in London.
“Yes, there’s austerity in Europe. But we’re optimistic about
the long-term trends. Last year, 504m visitors came to Europe –
way higher than expectations. In Asia, India and even Africa the
expanding middle classes, what I call the commercial classes, are
travelling as never before.”
Making a success of all the new properties and brands he is launching
is not rocket science: “It’s about keeping our eyes open and matching
our innovation with what customers want.”
Which brings him neatly back to the one-night stand. “Let me explain,”
he says. “We’re creating a contemporary, stylish, sexy hotel here
at Andaz Amsterdam. Too many modern design hotels are surface over
substance. Great for fun – a one-off visit – but, after you’ve
been-there-donethat, they’re boring. Andaz must be richer. It must
be like a person you want to come back to and get to know better.”
Creating that feeling, whether it’s at the Park Hyatt in Sydney or
the new Andaz in Delhi, can cause “tremendous brain damage. It’s
really tough”. But if it means his guests see his hotels as more than
a one-night stand, he and his shareholders will be satisfied in all
the right ways.
The life of Mark Hoplamazian VITAL STATISTICS Born: November 27, 1963
Marital status: married, with three children School: The Episcopal
Academy, Pennsylvania Universities: Harvard, Booth School of Business
at Chicago First job: landscaping during summer in family business Pay:
$6.6m last year Home: Lincoln Park in Chicago Car: BMW X5 Favourite
book: A River Runs Through It, by Norman Maclean Favourite film:
Lawrence of Arabia Favourite music: U2 Favourite gadget: fly fishing
rod Last holiday: glamping on Vancouver Island WORKING DAY “My best
days at work are the ones I spend in our hotels, when I have the
chance to meet the people who take care of our guests,” says Mark
Hoplamazian. When he stays at Hyatt hotels, he always requests a
standard king-bed room and tries to see the hotel managers and the
back of the house. Days in Chicago begin early in the morning with
time on the treadmill and are filled with back-to-back meetings,
but he says the best ones start with taking the kids to school and
end early enough to see them at dinner.
DOWNTIME Mark Hoplamazian’s routine is punctuated by rare, but equally
absorbing, antidotes in the form of adventure travel and family
immersion getaways, such as safaris in Africa, biking in France, and
hiking in Central America and fishing in Idaho. “Nothing compares
with the times when I can totally unplug and fully connect with my
family while we’re exploring new things together, fully immersed and
totally engaged in the moment.”