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Lessons from the Titans of Hospitality

Published on
August 14, 2023
John Sutton

The History of Global Hospitality brands varies greatly, but there are also many similarities to their long-term success. As we build Mansion into a company that can become the next great hospitality brand, we have diligently looked at those who led the way in our past. Great financiers like Conrad Hilton, the King of Hoteliers & Hotelier to Kings like César Ritz, visionaries of architecture and real estate like Caroline Rose Hunt (of Rosewood Hotels), or innovators in local connections like Bill Kimpton.

The story of these great brands has a singular common thread. A strong entrepreneurial spirit + a passionate leader. As the founder of Mansion, I aspire to be the visionary these leaders were, and I have a similar passion for our vision; we have an amazing team and diligent dedication to the mission. I can only hope that 50 years from now, Mansion deserves to be mentioned in the same breath as these billion-dollar hospitality brands.

What can we learn from the history and mission of these great hoteliers? What made them “great” and where are they today? I thought I’d share some history and some insights I’ve garnered (see Twitter for TLDR version).

A Brief History of Hilton Hotels & Conrad Hilton

Conrad Hilton, the founder of the international hospitality company known as Hilton Hotels, began his journey into the world of hospitality quite serendipitously. Born in 1887 in the small town of San Antonio, New Mexico, Hilton ventured into various business opportunities before landing in the hotel industry. His first foray into the world of hospitality came about in 1919 when, intending to buy a bank in Texas, he ended up purchasing The Mobley, a local hotel in Cisco, instead for $5,000. This marked the beginning of a what would become a legacy for the ages.

Hilton acquired several more hotels over the years, with his empire taking root in Texas. It wasn’t until 1925, when he built the first hotel under the Hilton name in Dallas, that the brand started to gain recognition. The onset of the Great Depression in the 1930s put a temporary hold on the expansion of Hilton’s empire, but he managed to keep his properties and acquired more as the economy began to recover. Known as one of the saviest financiers of his time, Hilton’s ability to time markets and build relationships with lenders was often over-looked by his competition who would flounder in downturns.

The United States experienced a boom in economic activity and travel after World War II. Hilton capitalized on this, and in 1946 Hilton Hotels Corporation was formed, followed by the Hilton International Company in 1949. The first international hotel opened in Puerto Rico that same year, marking the start of global expansion. Hilton Hotels became the first coast-to-coast hotel chain in the U.S in 1943 with the purchase of the Roosevelt and Plaza hotels in New York.

Hilton started expanding to other brands in the 1950s and 60s, a strategy aimed at targeting different market segments with unique hotel products. In 1949, Hilton purchased control of the Waldorf Astoria hotel for $3 million, a hotel Conrad once called the “greatest of them all”. In 1954, Hilton purchased the high-end Statler Hotel chain, adding more luxury properties to its portfolio. As the company grew, so did its variety of offerings, tailoring to a wide range of customers from business to leisure travelers.

The mid-1960s also saw Hilton introducing franchising into its business model, a move that catalyzed its growth exponentially. This model enabled the company to expand rapidly without the high costs associated with building and owning hotels. It provided a winning combination, allowing local entrepreneurs to leverage Hilton’s established brand, operational expertise, and reservation systems, while Hilton earned franchise fees.

The 1980s and 90s saw more diversification with the introduction of brands like DoubleTree, Embassy Suites, and Hampton Inn. These additions allowed Hilton to cater to customers seeking mid-tier and budget accommodations without diluting the premium image of the Hilton brand.

Perhaps one of the most influential strategies for Hilton’s global growth and brand loyalty has been the Hilton Honors program, launched in 1987. This loyalty program was designed to incentivize repeat customers by offering benefits such as room upgrades, free nights, and airline miles. The program was a game-changer in the industry and helped secure a strong customer base.

Over time, Hilton Honors evolved, introducing a variety of ways to earn and redeem points, partnering with airlines, car rental companies, and credit card companies to offer more value to members. By 2020, the program had grown to over 100 million members worldwide, contributing significantly to Hilton’s sustained growth and profitability.

Much of the success of Hilton Hotels can be attributed to Conrad Hilton’s entrepreneurial spirit, his readiness to adapt to market trends, and his ability to seize opportunities at the right time. From purchasing his first hotel in Texas to the global empire we know today, Hilton Hotels Corporation’s journey has been a fascinating study in business acumen, strategy, and growth. Its adoption of a franchise model, it’s brand expansion, and it’s creation of a robust loyalty program have ensured Hilton’s place as a leader in the global hospitality industry.

Conrad Hilton in front of his Los Angeles hotel in 1954. JR Eyerman/The LIFE Picture Collection via Getty Images
Conrad Hilton in front of his Los Angeles hotel in 1954. JR Eyerman/The LIFE Picture Collection via Getty Images

A Brief History of Ritz Carlton & Cesar Ritz

César Ritz, the “king of hoteliers and hotelier to kings,” is an icon in the world of hospitality and the founder of the Ritz Carlton brand. He was born in 1850 into a poor Swiss family in the canton of Nidwalden. After failing to find success as a sommelier in his early career, he moved to Paris in 1873 and started working at a prestigious restaurant called Voisin, which was a gathering place for high society during the siege of Paris in 1870.

Ritz’s career took a significant turn when he was appointed as the manager of the Grand Hotel in Monte Carlo, which had previously been struggling to attract customers. Ritz was able to successfully turn the hotel around, and his reputation in the industry began to grow. He subsequently managed the Savoy Hotel in London, introducing innovative ideas such as private bathrooms, telephone lines in every room, and multi-course feasts.

In 1898, Ritz decided to start his own hotel and opened the Hôtel Ritz Paris. He applied his grand vision for service, coining the phrase, “The customer is never wrong.” His dedication to customer service and his attention to detail, luxury, and comfort quickly established the Ritz as a symbol of high-end hospitality.

The Ritz Hotel, Circa 1898

A year later, Ritz expanded his operations to London, opening the Ritz Hotel in Piccadilly. However, Ritz’s health began to deteriorate, and he could not oversee his hotels’ operations. His wife, Marie-Louise Ritz took over and maintained the high standards that had become associated with the Ritz name.

Fast forward to the mid-20th century, the Ritz-Carlton Investing Company was founded in the U.S. by Albert Keller, who bought and franchised the name from Ritz. The first Ritz-Carlton hotel in the U.S. was established in New York City in 1911. However, it was only in the 1980s that the brand started to gain prominence under the leadership of Horst Schulze, who had a vision of making Ritz-Carlton a globally recognized super-premium brand.

Under Schulze, the company established the Ritz-Carlton Leadership Center and introduced the “Gold Standards,” a set of service values, credo, and employee promises to improve customer service. In 1992, Ritz-Carlton became the first hotel company to win the Malcolm Baldrige National Quality Award, highlighting their commitment to quality service.

In 1998, the Ritz-Carlton Hotel Company was purchased by Marriott International, further expanding the brand’s reach. Today, Ritz-Carlton operates over 100 hotels and resorts across 30 countries and territories, with a significant presence in major cities worldwide.

Ritz Carlton has expanded into different hospitality industry segments, such as Ritz-Carlton Reserve (ultra-luxury resorts), The Ritz-Carlton Yacht Collection, and Ritz-Carlton Club (fractional ownership residences). The valuation and size of the company have consistently grown over the years due to its continued expansion and the brand's strong reputation.

The success of the Ritz-Carlton brand can be traced back to César Ritz’s obsession with customer service and luxury, setting a high bar for the hospitality industry. Over the years, this brand ethos has been maintained and built upon, enabling Ritz-Carlton to establish a powerful presence in the luxury hotel and resort industry.

A Brief History of Bill Kimpton and Kimpton Hotels

Bill Kimpton was a different kind of hotelier. Kimpton’s financial success came as an investment banker famously Kimpton made Wall Street history by persuading his more traditional bosses at Lehman Brothers to take public the nation’s first fast-food franchise, Kentucky Fried Chicken (now KFC), and then by raising $275 million to expand the company nationwide.

After a successful investment banking run, including exposure to the purchase of Kapalua Bay Resort in Hawaii; in 1981, Mr. Kimpton embarked on his first independent venture, purchasing the Bedford Hotel in San Francisco. What made “Kimpton” hotels different, though, wasn’t Bill’s financial background, but rather the spaces he created and the purpose for why he created them. He once expressed his belief succinctly, noting that all travelers inherently feel insecure.

Bill Kimpton and Actor Vincent Price in front of Kimpton’s Hotel Bedford
Bill Kimpton and Actor Vincent Price at early Kimpton Hotel “Clarion Bedford”

“It’s just a matter of degree,” he said. “A hotel should relieve travelers of their insecurity and loneliness. It should make them feel warm and cozy.”

Kimpton Hotels had a vision to craft boutique hotels that offered more than just a place to stay. Rather than adhering to the cookie-cutter formula of traditional hotel chains, Kimpton championed the idea of unique, boutique establishments, each with its own distinct character and story, often with unique restaurants on the ground floor with rooms above. A major differentiator for Kimpton was its innovative take on guest experience. Each hotel was/is tailored to its location, reflecting the local culture, history, and vibe.

Outside of design, Kimpton introduced pioneering amenities such as complimentary wine hours and pet-friendly policies, transforming the very nature of hotel stays and setting Kimpton apart in a crowded marketplace. Some of these policies we continue to see separate AirBnB hosts in the market today.

Kimpton’s restaurant and bar ventures, integrated seamlessly into the hotels, were equally groundbreaking and not just an after-thought outsourced to the highest bidder or highest revenue share. They also weren’t just places to eat; they were social hubs, destinations in their own right. These establishments reflected the local scene and often became the go-to spots for both guests and locals, bolstering the community feel that Bill sought to cultivate in his brand.

Kimpton Hotels continued to grow to over 35 hotels and was considered by many to be the premier boutique hotel brand in the U.S., if not the World, at the time of Bill’s untimely death in 2001 at the age of 66 after an extensive battle with leukemia.

On December 16, 2014, a testament to the impact and success of Bill’s vision, the InterContinental Hotels Group (IHG) announced that it would acquire Kimpton for $430 million in cash (reportedly doing just over $1BN in revenues at the time). The deal, though signaling the end of one chapter, promised the start of another, as Kimpton’s unique ethos was set to reach an even broader audience on the global stage

Today, IHG continues to operate and expand the Kimpton brand Worldwide with 75 hotels and 13,116 rooms in operation and over $1.2BN in revenues in 2022.

A Vision for Mansion Influenced by the Greats

I learned a ton about our gaps at Mansion and some of our aligned strengths, but like any startup, Mansion has decades of learnings ahead to have a chance at standing in the footsteps of these great brands. Here are a few key things I shared with my team on how the history influences Mansion and where we focus from here:

  1. Innovation isn’t limited to technology. Push boundaries on spaces, design, amenities, and more but with a focus on the solution to the problem.
  2. Find visionary partners willing to do unique endeavors with you in real estate (see Vincent Price and Kimpton). For Mansion, we’ve already found amazing developers (commercial and residential) and real estate investors looking to do something different in the space. These relationships and partnerships are critical to growth.
  3. Engage with your customer as often as possible and in a meaningful way. For Bill Kimpton it was wine in the lobby with them or late dinners chatting, for Ritz it has always been service at any cost. For Mansion, it will be different, but our customer’s are why we exist.

So what do we do? Here are some actionable steps we’re chasing…

  1. Design and deliver an experience inspired by the community it lives in, designed to feel like the home of our guests dreams, and that enables memorable moments for our guests. We are furthering the design of our homes in partnership with Mansion | District interiors.
  2. Create the Mansion brand and strategy to allow for a franchise model for Homes & Hotels for Groups that can enable growth for the business and create the next generation of entrepreneurs in new markets. We are actively developing our written playbook and our technology to enable this vision.
  3. Invent the next generation of “loyalty” by allowing anyone to be an investor and owner of our “hotels”. Turning guests into owners who amplify our brand beyond their own travels, but to those in their networks and can earn passive income and the potential for appreciation. Look for the launch of invest soon.