Gary Dollens, Hyatt Hotels

Stacy Shoemaker Rauen: Hi, thanks for joining us today. I’m here with Gary Dollens of Hyatt. Gary, thanks so much for sitting down with us.

Gary Dollens: It’s just what I want to do while I’m in Mexico is to be sitting inside a boardroom doing the podcast.

SSR: Well, we appreciate it.

GD: Thanks for the invitation.

SSR: Yeah, anytime, anytime. So, yes, we’re here in HD Summit, and we are in Mexico, and we are in a boardroom, and it’s gorgeous outside and going to rain later. So, we will get started so we can get through this. So, tell us, where did you grow up?

GD: I grow up in Chicago, outside of the city, and at that time what was probably the furthest west suburb of Chicago, which was 15 miles. I think ours was the last house built on a block for about a day. Then, they just kept on going and went further west probably another 30 miles or 40 miles today. But it was a pretty simple life, very middle class, it was great. You walk to school, came home to lunch, walk back to school, nobody’s mother worked. It was a [very] Leave it to Beaver, people have no idea who that lad is, kind of growing up.

SSR: Did you have any early memories of hospitality, or hotels, did you and your family travel at all?

GD: No, we traveled back and forth from Chicago to Virginia where my father was from. My early memories of hospitality is how finicky my mother was, and still is today. We stopped one time at a hotel along the way and we stayed there for about five minutes before we promptly checked out because the room wasn’t clean enough. My mother was refusing to stay there and my father, who was the only that drove, my mother didn’t drive. So, we got back in the car and kept driving. We rarely stayed in a hotel. We rarely eat out. My mother was and again still is a great cook. So, you ate better at home than you ate when you went out to a restaurant, and you certainly didn’t have the options that you have today. We didn’t have a disposable income either. My father was a school teacher in Chicago, ended up as a vice principal before retiring and moving back to Virginia into the house that my grandfather built. He was a carpenter, and so they moved back there and my father passed away many years ago. My mother is still on the same house today.

SSR: How did you get the bug for hospitality? Did you go to school and figured out there?

GD: No, it was one of those things that was completely and totally by accident. I had finished undergraduate work and I was going to go to law school, I thought I would go to law school. I’m glad I didn’t because I would have been a lousy lawyer. You’ve got to be highly detail oriented, which I can look at things from a broader perspective, but to sit there and read the way you need to read to understand, I would not have been very good. So, I decided to go back to graduate school, and my father had told me that he had some money that he could help me with if I went to school.

I finished my undergraduate a quarter early, so it was a quarter system, so I said, ‘Hey, I’m going to go back to school.’ Let him know, and he said, ‘Great, I spent the money in your brother.’ My brother disputes this story, because every time I tell the story, he says, ‘No, he did not.’ He disputes it. So, I had to find a job, because I had already been accepted. I was moving, and so I opened up the paper and there was a job at the Hyatt House in Oak Brook, Illinois, which was about a mile from where my parents lived, and I was going to live at home while I was going to school, and I went and I applied for a job.

I walked in, I applied for the job. They interview me and the guy that interviewed me is still with us today, he says, ‘Look, Gary, you’re overqualified. You’re going to quit on me in two weeks. So, I can’t hire you.’ You can’t say that in employment today. That would never fly.

SSR: HR would be mad.

GD: Exactly, HR would be all over you. So, I said, ‘Look, I can’t quit. I have to have this job. I’m going to school.’ So, he went ahead and he hired me. Again, the way the business has changed. He hired me in the operation side of business. Of course, I was only hired only to work a shift that split between the evening and late evening, because the night auditor that worked in the evenings was such a mean, miserable guy that they just hired somebody so that he wouldn’t have to talk to customers. So, that was my job, essentially. I kind of made it through the point where there was nobody else that was down there, and then, I would leave like one in the morning, and go back home, and then try to get some sleep before going to class the next day.

The guy that hired me, again, he reminds me every now and then, he goes, ‘You promised you wouldn’t quit, but I didn’t think you’re going to stick around this long, decades.’

SSR: What was it that you love so much about it? What drew you in?

GD: Well, for me, it was holistic. It wasn’t just that it was the job you were doing. The business was a sexy business. It was a lot of fun. It went from a business in the day to a hotel at night. Do you know what I mean? It kind of shifted. You were doing a function of the business, but then, as the day went on, restaurants and bars opened, and live music and all of that was going on. So, you got that piece of it. You got the piece where there were different people from all over the world that were coming in and out of the hotel, depending on which hotel you work in. Some were less international than others, but you always had a real different mix, and the groups are completely different.

You go from one day doctors, to the next day turkey callers coming in the hotel. So, you’d talk about diverse individuals. The third piece for me was, it provided a lifestyle. I enjoyed traveling because I hadn’t done much of it, but this was even better, you got to move. So, I moved 14 times over the next 15 years and saw all of the United States during that process. I skipped a couple of places, I skipped Texas, I skipped Florida, but I lived in Hawaii, I lived in California, and I lived in New York a couple of times, and DC and throughout the Midwest.

I figured out where I wanted to be and where I didn’t want to be. I decided Detroit was not where I was going to spend a lot of time of my life. I apologize to all of those from Detroit, but it’s become a much better place today than it was back then. So, it gave you that opportunity to have this complete circle. It wasn’t just you went to work and you came home, but you went to work, you had some fun. The age demographic of people that were working in the business at that time were really tightly banded together. It’s not quite the same today. So, the general manager of the hotel might have been 35 or 40 years old and the youngest person was 22, that was coming out of college and starting to work for the company.

So, you had this really, really interesting age demographic and everybody did things together. At the end of the day, we had part of the parking in Oak Brook, every Thursday they put a keg of beer out there and the volleyball net, and we went out there and played as employees of the hotel. I thought, this is like almost like a continuation of college. I couldn’t even imagine going into a bank and sitting down, and whatever, a loan officer. I had so many friends that, at that time, had accounting degrees, and they were working for one of the accounting firms auditing different businesses, traveling in their car from city to city in Illinois, Moline, Pekin, Peoria. I’m like, ‘Oh, God, just shoot me. That would just be an awful life.’ So, it was all of that that ended up providing a lot of opportunity and interest.

SSR: So, wore many hats, what was your trajectory? How did you grow within the company as you moved to all these places?

GD: I worked on the room side of the operation, not the food and beverage side, early on in my career. There’s really three levels, or at that time there were. I think we’ve narrowed the levels today from maybe a department head running a front office, or a housekeeping department, to running the division—the function of the hotel—to being a general manager of a hotel. I did that. I did the first part of it in Chicago, and in Detroit, in Columbus, and Lake Tahoe. I did the second part in Memphis, San Francisco, and Honolulu. Then, I worked as a manager in Atlanta, Saint Louis, New York, Washington before becoming the VP in New York running operations, working for that region.

Then, I made a complete left turn and came into the corporate office. I had no interest in that. One friend once said to me, ‘Hey, if you work in the office, you just put your head down and try not to get hit.’ I thought, that’s not a way to live life at all. But it had shifted, and that was not the way that I found it. I was intending to go and then work in the office for a couple of years and then go back out into the field again and run a larger region, and I was asked to stay. Not only was I asked to stay, I was asked to change my career path and move on to the design side of the business.

At that time, the head of our architecture and design group was retiring. The guy still work for us today, Chuck, said, ‘Hey, will you take a look at how other groups do this?’ I said, ‘Sure.’ I went and I came back and I said, ‘Well, here’s how one brand does it, here’s how another brand does it, here’s how another brand does it.’ He says, ‘Well, I’d like you to run it for us.’ I said, ‘Wait a minute, am I not doing operations the right way?’ All was good, but he thought it was a little bit different and thought that was something that I could do. He says, ‘I don’t think you could do it poor enough that we’d have to fire you.’

So, I thought, well, that is encouragement all the way, and I think I will absolutely accept that. One of the things that I tell people all the time, a lot more happens when you say yes than when you say no. Every opportunity that ever came my way with Hyatt, I said yes to. Unless it meant moving away from family or something that was important. When I came back from Hawaii, I was living in Hawaii and my father passed away, and they wanted me to stay out in Hawaii and I said, ‘No.’ I said, ‘I have a specific reason why I feel the need to move back East.’ And that’s what I did. Hyatt is great that way. They accommodated that.

They said, ‘We understand why you want to do this.’ But outside of that, every other opportunity that I’ve said yes to has ended up in a better opportunity. I talked to folks that work with me or asked my thoughts on what they might do in their career, it’s always, ‘Say yes to the opportunity because you are going to learn something, find out something, or you’re going to find out what you don’t like,’ which is equally good. You’re going to work with some people that you think are fantastic, you’re going to work with some that aren’t quite as good as you think they are or should be, but you don’t walk away from that experience without—if you’re paying attention—being better at what you were doing and enhancing your career and your life as a result of that.

So, when I took that opportunity … I remember specifically, it relates back to HD Summit. I just moved into the role probably four months and I went to HD Summit, and it was at the Montage. I walked in the room, I looked around, I went, ‘Who the hell are all these people?’ I had no idea, I was looking around and going, ‘I don’t know who these people are. Okay, there was one person I know over there.’ You glean them over and you go over, and then they’re like, ‘Please get away from me. You’re keeping every other prospective client away from me at this point.’

But it was the best thing that ever happened, because as the time went on you start to know who’s who and develop relationships. This is the most fun part of the business. I talked to all of my operations friends going, ‘God, I am so happy I am not doing what you’re doing.’ They deal with every crisis, the phone rings at midnight, two in the morning, when something happens. Either in a hotel or in a region, which is only natural because of the number of people you have going through, but I don’t deal with that. Then, I took another left turn when they asked me to run our select service brands. That was one time where I really did, I thought long and hard at first, and at first I was going to say no, I just said, ‘That just doesn’t feel right for me at this point in time.’ I went home over the weekend and I came back on Monday and I said, ‘Okay, I’m all set.’

SSR: You changed your mind?

GD: Chuck says to me, ‘What happened between Friday and today?’ I said, ‘That’s where all the action is.’ I said, ‘That’s what’s happening now. That’s where our business … we’ve not been in it, but our business is going to be significantly in Hyatt Place, Hyatt House, in the franchise business, in the full service side.’ That was in end of 2008, and that is exactly what happened. We now have 400 Hyatt Places where back then we had 50, 75, I know somewhere in that region. We had the original AmeriSuites, and we’re just starting to open our newly built Hyatt Places.

Hyatt House was a very small brand, and then, we combined, we bought LodgeWorks portfolio and put we rethought what we were doing there and redesigned it, and it’s now moving along very nicely. The full service franchise business is a big, big chunk of what we do today. All of that, I think, has made a much stronger organization, and to have worked on every brand side, full service, select service, to have worked in the operation side and the design side, and then, the operation side and design, again, on that side. Then, moving four years later is when we globalized Hyatt entirely.

I was asked to start this product and brand development group in Chicago to pull our company together, because we really operated as two completely different companies, and rightfully so, because we had a president of each group, and they had their own full functions. It created an inconsistency that we had from North America, to Latin America, to Europe, Asia-Pacific. The goal was, ‘Let’s pull this all together.’ We know that the brands are going to represent themselves differently by region, but we also know that they need to be recognizable globally at the same time.

Again, I talked earlier on about, it was a holistic business for me because I was able to move. I moved, and then ended up traveling instead of moving—because now, I’ve been in Chicago for 16 years, all of this has occurred—and traveling in North America to then traveling everywhere else in the world. A friend of mine said once, somebody who used to work with us, who’s retired, he said, ‘If people viewed us the way that they viewed us when they first knew of us, none of us would be doing what we’re doing today.’

You think about this as building blocks of the growth that everybody has, and all of the sudden, one day you’re looking back and you’re going, ‘I cannot believe they’re actually giving me this responsibility. They have no idea.’ That ended up being really a lot of fun because then you have an impact on the footprint. You can have a good impact and bad impact. But to be able to have the opportunity to do that was really a lot of fun. Then, after that, we reorganized again, and they took the actual execution piece of the design services and had that roll up into my group as well. So, it’s one thing to be able to create something. It’s another then to throw it over the fence and hope somebody picks it up.

It’s completely different if there is no fence there, and while you’re creating it, you’re having these conversations and the dialogue, and there is this inclusive piece going back and forth, and then, the world moves forward. I remember when we first were doing Hyatt Place in Asia, and I was sitting there with the whole group in our Asia-Pacific office, and they thought the world was coming to an end; we’re going to ruin what they had created. They don’t think that way today because they see it differently. They’re operating it today, and they also understand that Hyatt Place in Asia is a little bit different than Hyatt Place in Cleveland. But they’re recognizable and the brands really help stimulate growth in the other brands at the same time.

SSR: So, for the people listening, so everything, brand, product, development, and then also the execution, all rolls up to you then?

GD: Yeah, yeah, and the group in Chicago. It’s also interesting is I believe in tight groups. I think that the tighter the group is, the better the opportunity you have to actually get something done. The group that we have that works on the product and brand development side is four people. They are the most productive group of individuals I’ve ever worked with, I can honestly say. The output, sometimes, I’m like, ‘Hey, back off. You guys are pushing me too hard.’ An example is we launched a new brand, Caption by Hyatt last year, officially at the Lodging Conference. This was a brand that we started working on a little over a year ago.

We kept getting feedback that we needed to have another brand in the select service space that bridged that lifestyle side of the business. Interestingly enough, one of the things, I never stay in Hyatt unless I haven’t been to the hotel before. I always want to stay in that something else. I always want to look at another brand, I always want to understand, ‘What are they doing differently?’ One of my favorite things to do is go sit in the lobby and just watch how it works. See, is it actually working the way that it’s intended to work, and why do you do it this way and why don’t you do it differently than that?

So, when we were doing Caption, one of the things that I thought was really interesting is that nobody has ever done it before. They’ve never been able to scale it before. There are some great small brands that are out there, that have been able to figure out how to do it, and open a couple of hotels a year, but how do you do that on a larger scale? How do you really create something that is going to not be a poser brand, that is going to be real, that is going to look like it was actually, like, ‘Did a brand really do this? Did they really create this?’ But at the same time, something that took out the pinch points.

Because part of what, for those that stay in lifestyle, or even run or develop, I think one of the things that probably people can agree is, they give up certain things as well. You give up on lighting, or you give up on bathroom counter space or you give up on connectivity or food quality. The group that did all the work, they started creating something that addressed those things, and we kept going back. We work with an owner’s advisory group on all of our brands today. When we want to propose something new, we’ll bring them in and we sit down, and we say, ‘Okay, here’s what we’re thinking about doing.’

I know all brands do that, they all work with OACs, but I think that we listen to them a lot. Because, look, if they’re not going to develop the brand, then, there’s no reason for us to make it, right? It’s great to make something cool, but if nobody buys it, then, it doesn’t matter. We went through with them and we got a pretty good reaction. It was a compelling conversation. Then, we did the same thing at an all owners conference. Got up and walked through what was unique about the brand, the fact that it isn’t lifestyle, but it’s self-activated and that it is coworking inspired at the same time. You have taken the pinch points out of the spaces.

We’ve been working with Union Square Hospitality Group and Danny Meyer on creating the concept for this because I thought, ‘We’re going to do something interesting. We don’t know what we don’t know, right?’ So, you become insular internally, and the business has changed dramatically from back in those early days that I talked about with Hyatt. So, we went and sat down, had this conversation, and it’s just been a pleasure to go through this process, and we’re about at the point where the cake is baked.

Now, it’s all about execution, it’s all about, how do you execute on it so that it really works effectively and that somebody does walk in and say, ‘Wow, they did this. It’s not just another brand, it’s not just another room, it is truly an eco-system.’ The way the social spaces are organized are very specific. We don’t want you to hit the transaction in the door. The transaction is only for those that are going to go through a transaction. Early on, with Union Square Hospitality Group, we talked about hotel, what hotel? That just becomes a part of it.

I had one of our folks said, ‘Well, Gary, what happens if somebody is checking in and the social space is so busy? They have a hard time getting to the reception.’ I said, ‘God, I hope so.’ What’s going to happen is, then, they’re going to go upstairs, and then they’re come right back down again. That, to me, is really the most interesting part. If you can create it, and then you can execute on it. Our business is, the hardest thing about our business is the fact that it involves people. It involves employees, and it involves guest. What else can go wrong?

But if you have an opportunity to create something that’s different, then, how do you do that? How do you create something that is not capital intensive for an owner? How do you create something that, in terms your future capital, minimizes it? Those are the things that we thought about. How do you use materials that are not traditional materials? How do you reuse and repurpose materials? Where can you do that? How do you make yourself as sustainable as you possibly can without breaking the owner’s bank? You have to have margin. You can’t build a hotel if it doesn’t have a margin.

How do you do all of these where you can take square footage out of the guestroom but not to the point where it’s a micro room, where you bump into the television when you get out of bed and something that’s highly scalable. So, how do you take square footage out of that? How do you create this natural progression eco-system within your social space? How do you stack tightly so that the square footage per person is utilized in the right way, because I don’t know why, whenever you have a party, everybody ends up in the kitchen. It’s the smallest space, but somehow they do.

So, how do you eliminate all the gratuitous things that occur in a hotel that just really don’t serve the purpose that they intend to serve? How do you take your number of fulltime equivalent employees and reduce that and you still can get what you’re trying to get? I was telling somebody last week, when I was in Madrid, I was staying not in the Hyatt, we’re looking at another hotel. I had to wrestle the bellman for my bag. I’m like, ‘No, I’ve got it. I’ve got it.’ He’s like, ‘No, I’ve got it.’ I’m like, ‘Look, I’m the customer. I want my bag. I don’t want to wait 15 minutes for it to get upstairs. It’s why it’s got wheels on it. So, there are so many things that the customer knows what they want today, and it’s pretty universal.

Some of your product is not prototypical at all. We are starting with a white piece of paper, but you’re still helping to define it. I think about luxury, how luxury has changed so dramatically, I think, over the last many years. The way it was defined, old luxury versus what is new luxury, and I think everybody is still coming to grips with what is that and how does that shift. Because internally, we think of things one way, but again, the customer thinks of it another way. I believe in using consumer analytics, data analytics, understanding that, and also, watching. Because people tell you all the time they’re going to do something one way, and they do it another way.

SSR: Well, I remember once you told me that you … I love how you always stay in your guestrooms, model rooms. Do you usually go there one night to see how it all works?

GD: Yeah, I think the best thing for you to do is, I learned this years ago when I worked on the operation side, and I had somebody coming in, that you wanted to ensure that everything was right. So, I would, as the operation person, I’d stay in the room the night before they’d check into the hotel. It was interesting because you’d find small things. The garbage can wasn’t convenient where it should be. One light switch didn’t operate the way it should. Somebody had unplugged something and plugged in an iron or something and they had then plugged it into the wrong outlet again, and that one wasn’t connected to the light switch.

When you do model rooms, you’ve got to see it in the day. You’ve got to see it at night. You have to take a shower and understand, is this intuitive or is it not intuitive? Does the door close the right way? What’s the noise level going to be? How comfortable is it? You get all of that if you stay in it. If you don’t stay in it, it looks good, but I don’t do as many model rooms personally as I did before because we’ve got highly qualified people that are doing that.

But when I go in, people are talking about the color of the millwork, and I’m sitting in a chair, I’m squiggling around and it reminds me of that scene in, remember the movie Big? Tom Hanks is sitting there and he’s this kid that turns into an adult, and he’s working for this toy company, and everybody’s talking about the demographic of the toy, and he’s just playing with this thing, and he’s like, ‘I don’t get it. What does this thing do?’

I think we have to take that approach to our product. Do you get it? Is it intuitive? Do people understand it? How hard is it to figure this out? How frustrating is it? I don’t want to learn something over and over and over again. Years ago, when we’re working on fitness equipment, we decided we would go with a particular fitness company for all of our equipment at that time, because I wanted somebody to learn how to work our treadmill one time and that was it. Not learn how to work it 12 different types from the next hotel to the next hotel to the next hotel.

If they’re staying with Hyatt, you want them to understand, ‘Here’s how it works, and that’s pretty simple.’ I can get on the cross trainer, and I’m like, boom, boom, I’m off. Instead of looking at this going, ‘Oh my God, how do I change this from kilograms to miles? Let’s see.’ It’s highly confusing. Those are the things that I think are important in all of our product. Whether it’s food, or the restaurant design. You walk into too many spaces that look great, but they don’t function the way that they should function.

Form and function are equally important and, I think, maybe I’d even say that form is more important than function if one trumps the other. Because a space can look beautiful, but I want to be able to enjoy it. We all go to restaurants that may not be designed as nicely from the physical design, but it’s a great restaurant because of the service and because of the food quality. Those I’m not giving up on ever. We’ve got some hotels that outperform others that are a little bit older because of the way they’re operating. Back to that, you can create anything, you can design anything, but God, if you don’t operate it right, there is no substitute for good leadership, period. When you have it in the right places, you can do amazing things, and if you don’t have it, then, you get something that’s average.

SSR: You’re set up for failure. When you work with different designers, because you work with many different collaborators, is that something that you would recommend, or if you had to give them advice, to think about form and function, to think about operations, to have that kind of mindset as a designer?

GD: Yeah, I think it’s understanding, first of all, what the brand is. So, we’ve had a few hotels where sometimes the manager onsite wants to do something a little different because it’s their hotel. We had one example where that was the case. So, the firm that was doing the work, they were following that direction. Then, we got involved and said, ‘Don’t follow that direction. This is what this brand is, and so, let us make sure that we immerse you in this brand.’ I think that’s one thing that, if you want to, and I understand, for all the [the people] working on the interior design or the architecture side, you’ve got multiple constituencies to work with. You’ve got a brand that wants certain things. You’ve got a hotel that wants certain things on their own, and you’ve got an owner that sometimes says, ‘Forget about the brand. I want you to do what I want you to do, I’ve got it.’

SSR: So who do they listen to?

GD: Exactly, right. So, who do you listen to? The first thing is, understand the brand that you’re doing. Just understand it. If you can understand it and you fully know what the most important things are for the brand, and the logic behind it, because the last thing, if I ever hear anybody saying, ‘Well, that’s a brand standard.’ That’s the cheapest answer we can give. There’s a reason for it. So, I go back to Caption, if somebody says, ‘Well, I want my arrival experience to be right when you walk the front door.’ We can say, ‘Here’s why we don’t want it there. We want it here for this very specific reason,’ because it all plays a part in how it works together. If we can get everybody that we work with to understand that, to say, ‘Look, here’s the brand you’re working on, understand it, and get us close.’ They can still listen to their owner and they can still get what the owner wants out of it. But they’ve got a reason for doing it that maybe it opens up somebody else’s eyes to say, ‘All right, I’ve got it.’ We’re actually trying to be something that segregates our brands a little bit or a lot as much as we can so that we can work in those spaces.

When you only have a few brands, part of the issue you have is, if I think back to when I first came into the office 15 years ago, we had Park Hyatt, Grand Hyatt, Hyatt Regency, and Hyatt, that was it. Then, you squeeze a lot more into it. When you’ve got a collection of brand, you can create a collection of brand. When you’ve got a collection lifestyle brand like Joie de Vivre, you can do that. We have Andaz, Thompson, Centric, Joie de Vivre, and now, Caption, that all fit into that space. You got a wide band to move it to, it’s not just about building a hotel or opening a hotel in a particular location, it’s about, you’ve got to create physically that hotel there, and you’ve got to operate that hotel as that hotel.

If the market won’t support the rate then the market won’t support the margin then the market won’t support you to operate it that way. So, if you understand what we’re trying to create there, if you’ve got the right brand there and the interior design firm understands that, the architecture firm understands that, then we end up getting a great product that becomes recognizable to the customer. The owner ends up getting a product that he or she doesn’t overspend on. We end up having something that a customer comes in and we can operate it the right way, and it makes sense. If you put a Park Hyatt in a tertiary market, somebody may be able to build it, but it doesn’t do us any good. Hotels that are half occupied aren’t really good things for us. So, you want to build something that you know is going to work in that particular market.

SSR: I remember talking to someone about how many brands there are. There are more brands than ever especially in the last 15 years, and somebody is saying, ‘Well, is it oversaturated.’ I think you are saying, and correct me if I’m wrong, but it’s the same argument that I have is that, almost create better brands because you get more specific, you get more targeted, you get more authentic in what they are instead of trying to be something for everyone putting so much into one brand.

GD: Yeah. Look, everybody knows distribution is important, right? Of course, net room growth is important for every brand. But you are really trying to create something that is identifiable, and I think if you look at most of the new brands that come out, they’re taking a point of view, at least from day one they are. You want to take a point of view, and you want to make sure, first of all, that it’s a point of view that make sense. It’s logical and it’s developable for all the right reasons, not just for the developer or not just for the customer, because that doesn’t work. But that, for all the right reasons, works through all of those parameters.

There are times also where a brand is saturated in the top markets or the top 200 markets or top three headed markets. If they are and there’s a demand in that market, then another brand  gives you an opportunity to go back into that market and to help your brands continue their distribution and give your customers other places that stay in a market that continues to grow. You don’t want to put hotels in markets that don’t have a support for them. Think big cities. In Seoul, you can’t just have one Hyatt Regency, one Grand Hyatt, and one Park Hyatt. There are 22 million people, 24 million people. Think about how many you need.

We had that issue in New York for a long period of time with the Grand Hyatt New York. It was an old AOP issue, area of protection. As soon as we lifted that, we’ve been able to develop through Manhattan, and for somebody who lives there, you know how hard it is to get around Manhattan these days. So, having a hotel where I’m doing my business has become more and more important, because I don’t necessarily want to go from midtown to Lower Manhattan, or from the Upper East Side to the West Side. So, that helps you, and it’s important that you’ve got brands that segment and hit the different customer target that you’re looking for.

SSR: Right, and you mentioned Joie de Vivre. Hyatt acquired Two Roads Hospitality, which was Joie de Vivre and Thompson, how has that added to your portfolio, how has that helped expand? You mentioned Caption is part of the lifestyle group segment now, how does that differentiate from a Thompson and Joie de Vivre?

GD: Yeah. I think it’s helped us. It was a great addition for our brands. It means that you’re serious in your understanding of the segments. They really had not only a little bit different customer demographic, but they had different ownership demographic. They didn’t want a traditional brand per se. Thompson, for us, I think is a terrific brand because it’s one of those that has a much bigger virtual footprint than it does a real footprint, and there’s a lot of activity for that brand. Joie de Vivre is great it allows anything that falls into that lifestyle, upscale space to get a brand behind it but keep your individuality and its entirety. I think that whole Two Roads portfolio for us has allowed us to expand not only with Thompson and with Joie de Vivre and Destination, but with Alila as well, which has a nice footprint around Asia, and at the same time, is developing now in Europe.

We’ve got some West Coast development, and really takes a very different take on being eco-conscious and your thought process around being 100 percent sustainable. So, they were a really good fit for us. Again, there were a lot of locations that weren’t either, so you get a location match, you get a region match, and you get something that your brands that we were lighter on. We had Andaz that’s growing nicely in Europe and in Asia. It’s got growth in North America, but it goes into the primary markets. Thompson is in the markets where we aren’t with Andaz, say Seattle, or Nashville in particular. The one in the Gulch is a great addition.

We’re going into Dallas and Houston. We just got Los Angeles, we got some great markets where it added a nice pipeline. So, not only are you adding hotels that are already operating and existing properties, but you’re adding a nice pipeline that has a got reputation. We created a very specific operating lifestyle division, so that’s the other piece of it. So, we didn’t just roll it all in and start acting like they were the other brands. We have quite a few people that came along as part of the transaction that we are very happy with, that we think we really understand the segment and have brought knowledge to us.

I can say, universally, we did not have the attitude that we know what we’re doing here and we are absorbing you. We took a very, very different approach. We are acquiring because we respect what has been done here. We think you operate some really great hotels, and we want to take that and all we want to do is build on that. So, it gave us the critical mass to create a lifestyle group. When you don’t have critical mass, you can’t create that. It doesn’t economic sense, but it does now. So, you’ve got all of the people that are overseeing that from operations group, that’s all they work with.

SSR: Speaking of brands, you also brought in Miraval into your portfolio as well, which wellness is such an important topic and movement these days. How has that added to what you can offer, how have you grown, or how do you plan to grow that and learn from that as well?

GD: Miraval is a really interesting brand for us. Miraval Tucson was the only operating hotel when we made the acquisition. Since then, we’ve opened Austin, and we’re opening in New York in the Berkshires shortly. It’s going to be one of those brands that will grow, but is not … you wouldn’t put it into the scalable category. We’ve got a few more that we’re working currently, not announced yet, won’t announce here today either. But what it’s done for us is it helps to inform us relative to wellness throughout all of the other brands. It is so holistic. You talk about a cradle-to-grave experience with Miraval.

From no children, you’re there for that purpose, and you’re not just there to go to a resort and sit by the pool and go get a massage one day. You’re there to work through one of the 100-plus programs that are going on during your stay there. For us then, we look at that saying, ‘All right, where do you take any of that and how do you utilize it in Hyatt’s thought process towards wellbeing and wellness in all of our brands, or as a company?’ That’s where I think it’s made a contribution to us and will continue to be so. It’s very important. I think it’s an important halo brand for Hyatt. It is an important brand for our world of Hyatt members that want to go and experience something very different, very unique, when they’re on their own time. It has a very small meetings component to it, where you might get a small group of individuals together, and it has a long length of stay, because people don’t go there for a night. They go there for three or four days, five days, and it’s got a higher spend as a result to that also. So, you really do have to provide something that is very different and very unique, and I’d say we’ve spent a lot of time and our own capital, because we own the three, on making sure that we’re doing it right, and making sure that it’s a good representation of what we want that brand to be.

I think where we’ve got an interest in developing it is because of somebody that goes and has that experience and sees it and says, ‘Okay, I’d like to do this.’ The question on every brand is how deep is the pool? How many can you do before you saturate it because it is a higher-end experience and a higher spend? I think that’s where we’re at right now. But it really has helped us to inform us and work through what it means to us. We are very clear that wellness and wellbeing is highly important to Hyatt as a brand, as an organization, as a company for our customers, for our employees, for our owners, for anybody that comes in contact with us.

SSR: Is there anything you’ve done, any recent tweaks that you could share?

GD: Well, right now, we’re focused on meditation and trying to see, is there a way that you can incorporate that into your existing hotels, and how do you do that? We’ve done a couple of larger internal meetings, where we’ve done some, I guess their name is meditation station, but areas that you can go in and download a little bit while you’re at your meeting. We’re looking at that and saying, ‘Can you do that in other hotels for your general population? How do you that? What’s the value of it?’ One thing that Miraval does for us is that it let’s us experiment. So, we’ll go out and we’ll try some things. We’ll see, ‘Is this going to work, and how does it work?’ Then, we’ll change it again. So, we’re working on it in three different versions, in a smaller version, a medium version, and a larger version to see how does it work in different sizes of hotels. Does it have customer value? Because again, if I feel as a customer that, ‘Boy, Hyatt does care for me, they really do, and they’re showing me by things that they’re doing that have value to me.’ Again, what you’re really trying to do is you’re trying to gain preference.

SSR: Do you still get as excited opening a hotel now as you got excited in your first hotel back in the day?

GD: Yeah, I’d say probably more excited today. Particularly when you see it come together in this defined way that you’re trying to create a differentiation. You see the errors today, too. So, you look at things a little bit differently and you walk in a hotel and you go, ‘Why did we do this here? What was the purpose there?’ All we do is edit work, that’s it. We don’t do any interior design or architecture. We have architects, we have interior designers, we have engineers with review building systems, all of that. But we edit and editing is a fine science. As a journalist, you know.

SSR: I understand that very well.

GD: You know that a bad editor can make something really bad, even a great article. So, that’s where our folks have to be really, really good, is in looking at it, looking at it again, looking at it again, and looking at it again, because you catch different things each time, and you understand what the space means. That’s particular to social spaces, or restaurants or bars, again, because we always build model rooms. Whenever you don’t, the room is not a great room, I guarantee you, because every time we build a model room you almost always make significant modifications to it because what looks good on paper, sometimes, doesn’t translate into the guestroom.

So, we have to be really good at that. I haven’t actually seen it open yet, but Great Scotland Yard, we did Unbound Collection there. It was the old Scotland Yard building that they essentially kept the entire façade. The horse stable is still right next to it. It’s right off the Trafalgar Square. It’s a spectacular hotel. I walked through that and the quality of it and the overall design of it, I was like, ‘Oh my god.’ It was more exciting than a lot of hotels that I’ve walked through. When you see something that’s unique that can be very special also.

I tell you, I get just as excited if I see a Hyatt Place opens somewhere. If it’s in the right spot, if it’s been done the right way, and you watch the customer that it’s serving, it is equally or more important than that other hotel is. But because you got such differentiation between your hotels, it’s all unique and you want to make sure you put the right brand in the right place, and then you design it for that brand and then, you operate it that way. A week ago, I was out at the Hyatt Regency Portland that just opened in December. It is a fantastic Hyatt Regency.

It’s got our semi-prototypical room in it. It has got the social spaces layout exactly the way that we wanted them to layout. The market is a terrific market, right down to the back house offices. You look at it and you go, ‘This is fantastic.’ We opened the Hyatt Regency Seattle a year ago. Hyatt Regency Seattle is a fantastic hotel. This is equally as good or slightly better because it’s got just a little more of a tweak from generationally to it. The hotel is going to be highly successful. It’s not just about whether you think it’s a beautiful hotel, or it’s designed nicely, but how successful is the hotel.

I know we had this conversation a couple of years ago when we were doing a Gold Key judging and somebody said, ‘Yeah, but the hotel is not successful.’ It’s an interesting point of view. Designed the right way, but the economics don’t necessarily work, and I think it is all of the above because if you don’t have all of the above, then, yeah, it’s hard to get excited about what you created.

SSR: Is there any memory from living in these hotels and being so integrated into the day to day back as operations that sticks with you? Did your family ever lived in these hotels?

GD: Yeah, yeah, and that’s probably what I would say is, my memory and others, of my one of my sons riding a little tractor through the lobby of the hotel, a little toy tractor. It was like one of these scooters kind of things. When you live in Manhattan, and you live in a hotel above Grand Central, where do you learn to ride a bike in the ball room? You find a spot to do it, and then when you try to get out of the hotel. I remember one day I took my son, who’s now 23 years old, he had his little Razr scooter, and we went down in Grand Central, and we’re waiting for the subway. I don’t know, we’re waiting for the number 4 and the number 5 came, whatever, and the doors opened, I’m standing there. This lady next to me says, ‘Sir, but your son just got on that subway.’ I went like, ‘Oh my God.’ He just scooted right on, the door is open, he scooted on, he’s a little short guy, I didn’t pay any attention. I thought, ‘I can never tell that story to anybody, because child services would definitely haul me away.’ But sometimes that’s the price you pay.

My favorite place I ever lived was I ran a hotel on Capitol Hill for about five years. I loved Washington, and I loved the politics. We were literally right on Capitol Hill, so everybody would come in and out of the hotel, and I remember that Clinton was president at that time. One of my sons, he was a tough little guy, and I said, ‘Come on here, come down and meet the President today.’ So, he went down there and Clinton was as nice as can be and chit-chatted with him and took a whole bunch of pictures and went off. Then, my youngest son, the one that’s now 23, he came down one time and met Bush. My mother, who’s a staunch Republican, she was in town, I said, ‘Well, I’ll take you down also.’ He couldn’t have been nicer. He took a whole bunch of photos with her. Bush is high-fiving my son—nice, nice man. The White House driver just threw the roll of film at us and said, ‘Here you go, just take them,’ which was really nice, and those are being on Capitol, walking out and sledding down the hill in the winter time or playing on the mall, those were some of my favorite times.

SSR: Is there a property that you are most proud of, or looking forward to opening, or one that really helped define your career or define what you were trying to do with Hyatt?

GD: One of the things that I like is seeing existing real estate repurposed or rejuvenated. When you’re able to go in, you’re able to take that product that is an older product and figure out how do I make it current today? Atlanta comes to mind, the Hyatt Regency Atlanta was our first big box hotel. I was the manager there a long time ago, and it started as this very unique corporate hotel. It was so successful, they threw up a little tower behind it that was this small pie shape, they’d be called microrooms today. But we didn’t know what to call them. We tried renaming the tower, everything we could, but it’s still live pie shaped, small rooms.

I had to go out in the hallway to change your mind. Then, we put up another tower, and then it didn’t have enough meeting space and the hotel aged. When I was there, we had live entertainment, live music in the hotel all day long, all into the evening. You had a lobby bar, you had the Parasol Bar, you had a three-meal restaurant, you got a spinner on top that was a restaurant, a bar, and you had a Hugo’s formal restaurant, another bar, and you had another restaurant called Clock of Fives with a bar. As the years went on, in that hotel, we bought the building next to it, tore it down. It was an old IRS building, so something glorious about exploding an IRS building. Then, we put up all this massive meeting space, a huge exhibit hall. I think the exhibit hall might be 40,000 square feet, the ballroom is 40,000 square feet, and reorganized all the space, closed the restaurants, rebuilt the public space and the lobby level, kept most of what has been defined as the Portman tile, but did a terrific restaurant in the social space there that was all day dining. Did a great bar there, and then went up and had the spinner redone. I think Bill Johnson did the spinner and did it as a retro 1960s look.

Then, they replaced the blue dome on top it with LED lighting in it and the glass or the Plexi as well. So, it was better than it ever was. That hotel used to have a barber shop and a beauty salon and all of it. A ticket counter in the lobby for airlines, six different airlines in there, all of that is gone, all of it is changed. It is more relevant today than it’s ever been before. That to me is really satisfying, when you can look at it and you can say, ‘We got a hotel that opened in 1967 that when it opened, nobody else wanted it.’ Portman didn’t have enough money to finish it, we bought it unfinished. We finished it. It has had a tremendous history.

But as other hotels opened in Atlanta, bigger, newer, that had learned from what we did there, the massive amounts of meetings space, the hotel then struggled because it no longer had the transient base that it had at one time. To see that hotel repurposed the way that it is today and as relevant as it is, that’s really exciting to watch that. I think it’s great from an architecture, if I’m an architecture, an interior designer, to be able to design a new building that I think, I look at buildings and all the time there are some spectacular ones. But to be able to go in and to figure out, ‘How do I make this work?’ is really, really neat.

SSR: We always end the podcast on what has been your greatest lesson that you’ve learned along the years. You talked about many, but is there one?

GD: Again, I think it’s saying yes gets you a lot further along the way. It’s one thing that I talk to my own kids about today. I have three that now work in our business. Yeah, and they all made the decision on their own. I did not encourage them. I actually discouraged them. I thought, ‘Go do something else.’ But I’ve said the same thing to them, say yes, just take the opportunity. Figure out the opportunity. Look, moving isn’t for everybody, but it was for me. I loved it. Traveling isn’t for everybody, but it’s for me. Changing jobs isn’t for everybody, but to me, I kind of feel like I took a calculated risk through the years. I changed jobs at the same company. Did things different with the same company. I moved with the same company, but I had always provided that for me.

I’m not unusual or unique in that sense, that’s who we are, it’s who we’ve always been. If you work, you’ll get an opportunity. If you learn, you’ll get an opportunity. I’m not exaggerating when I said I’ve had many bumps over the years. I’ve made a lot of mistakes. Fortunately, they weren’t fatal, and when you work for a company that allows you to make mistakes and to do things. One of my, I call it a big mistake, was when we were doing the second generation of Hyatt Place, we built a full model room. It cost us about a quarter of a million dollars, I hate to say. We brought our owners through the model room, and we had done something a little bit unique. It was somewhat like the rooms were in veil, where you go down the hallway and there’s a cut-in to the rooms. They’re set back. I liked that idea because I thought it gives you a bigger bathroom. Instead of having all that room wasted in the room, where you walk in past the closet, and then you have to turn right to the bathroom, you could take what is that normal space of eight feet, you can move it to six and you can add a foot of space inside every guestroom and make it into a bathroom. I thought, ‘What a great idea.’

We brought our owners through it, they looked at it, they were just chatting, and finally, somebody heard something and they came to me and said, ‘They’re saying something here, they’re not to their likings.’ We brought them into another space, we said, ‘Okay, what’s going on?’ They said, ‘Well, we don’t like the room.’ I said, ‘Okay.’ I said, ‘What don’t you like?’ They go, ‘It was a safety issue.’ They said, ‘My wife would never turn here and here because they would feel unsafe. Somebody could be hiding around that corner. They want to be able to see down the hallway.’ I started thinking about it in select service space versus a luxury space, probably two different things. So, I said, ‘Okay.’ I was like, ‘Oh, I cannot even believe this, because I thought it was the greatest idea in the world.’ It was the crummiest idea in the world.

One thing, another lesson in life is, it’s never too late to walk down a path and back down it again than to keep going forward if you got a bad idea. Don’t just keep charging forward. There’s no shame in backing up. So, I said, ‘Okay.’ So, a lot of times I’ll change my mind about things, and someone will say, ‘But you said that.’ I said, ‘Yeah, but if you think about it a little bit longer, here’s why I think we should maybe go left instead of right here.’ So, I said, ‘Okay.’ They said, ‘What do you mean okay?’ I said, ‘We’re going to tear it down. We’ll rebuild it.’ They were shocked, they were like, ‘You guys are actually going to do that?

I said, ‘We don’t call you an advisory group for nothing. You’re there to help us. If you’re not going to build it, then, why in the heck am I going to say, ‘We’re going to go ahead and do it?'” I went back downtown, this was out near O’Hare, where we have a model room studio. I went back downtown and walked in, I said, ‘Well, Chuck,” I said, “good news and bad news.’ I said, ‘They loved the Hyatt House room, that room is great. We’re good to go.’ I said, ‘They did not like the Hyatt Place room, we got to rebuild it.’ He goes, ‘Okay.’ I said, ‘That’s it?’ He goes, ‘Yup.’

SSR: That’s amazing.

GD: And that’s amazing. I said, ‘It wasn’t right. We’ll rebuilt it.’ They came back out, I don’t know, three, four, five months later. They loved it, and they went and built a ton of them. That’s the lesson, is back down the path. Don’t be afraid. Your ego can get in the way.

SSR: Well, I think that’s a perfect place to stop. Gary, thank you so much for joining us. It’s always such a pleasure to catch up with you.

GD: Great. Thanks, Stacy. I appreciate the opportunity.

­