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Associated Press
Hilton CEO Chris Nassetta has run the company since 2007. He and other executives spend a week each year working at hotels.

Reviving the Hilton brand

CEO restructred culture since taking over in '07

McLEAN, Va. – Nearly every weekend, Chris Nassetta is cooking in his family's oversized kitchen, outfitted with two commercial-grade refrigerators, three sinks and a deep fryer.

These aren't small meals. Between his wife, six daughters, friends, neighbors and relatives, there are often 40 people dining.

“I'm not a gourmet chef,” Nassetta says. “I tend to cook what the kids beg for: my grandmother's old recipes of spicy red sauces, some sausage and ziti.”

Most of the time, Nassetta is on the road. In his day job as CEO of Hilton hotels, he has about 732,000 guests per night to make happy.

When Nassetta took over in 2007, Hilton lagged behind other hoteliers. He had to restructure not only the operations, but the culture. “People really didn't know where we were going,” he says.

Nassetta focused on lucrative international markets – at the time, only 19 percent of Hilton's new hotels were planned for overseas. He also franchised more hotels – a quick way to grow the company with minimal capital investment or risk.

Today, Hilton Worldwide is the largest hotelier in the world, by rooms, with 679,000. Of its planned hotels, 60 percent are now outside the U.S. Its initial public offering last December raised $2.35 billion, surpassing Twitter's IPO the month before. It was the second largest IPO of the year and the biggest ever for a hotel.

Nassetta, 51, is as likely to greet you with a high-five as a handshake. He gets animated about the gifts he's received from world leaders who welcomed Hilton into their country, like a zebra-skin rug, swords and watches.

“I know I've got a dagger here,” Nassetta says, rummaging through an office cabinet.

And he loves to chat. An interview lasts three hours, long enough to require a bathroom break – but not a pause in the conversation. Nassetta talks all the way through the washing of his hands.

“I am very long-winded,” he acknowledges. “Everybody tells me that.”

Hilton was once an innovator. The piña colada cocktail is said to have been invented in 1954 at the Caribe Hilton in Puerto Rico. Hilton pioneered the idea of an airport hotel in 1959 in San Francisco. And highlighting its cultural importance, in 1975 the Muppet characters Statler and Waldorf were introduced, named after two Hilton properties in New York.

But by 2007, many of Hilton's rooms were tired looking. Private equity firm Blackstone Group bought the company; Nassetta was brought in to turn it around.

Nassetta moved the headquarters from Beverly Hills, California, to the Virginia suburbs of Washington, D.C. There was a massive bloodletting: of the 600 headquarters employees, only 130 moved east.

“If you want to change a culture, you change 80 percent of the people,” he says. “We had lost touch with the front line.”

So Nassetta and his senior executives started spending one week each year working at hotels – in housekeeping, engineering and the front desk.

“Their job is harder than your job,” Nassetta says. “You get in there, and you pay them the respect.”

While some hotel companies, like Marriott International, are launching new brands targeting younger travelers, Nassetta isn't convinced that is the best approach.

“I think all our hotels, in all brands, need to appeal to the millennial,” he says. “Millennials grow up and their needs change. All of our brands need to be relevant to a broad array of customers.”

Part of that is accepting what needs to go away.

Rolling suitcases have eliminated the need for bellmen.

He made headlines last year with a decision to eliminate traditional room service in big-city hotels.

The labor costs involved with delivering food to rooms makes it a money-loser for the hotel.

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