david: this is, uh, my kitchen table and also my filing system. over much of the past three decades, i've been an investor. the highest calling of mankind, i've often thought, was private equity. [laughter] and then i started interviewing. i watched your interviews, so i know how to do some interviewing. [laughter] i've learned from doing my interviews how leaders make it to the top. >> i asked him how much he wanted. he said $250,000. i said fine. i did not negotiate with him and i did no due diligence.

david: i have something i would like to sell. [laughter] and how they stay there. you don't feel inadequate now because being only the second wealthiest man in the world, is that right? [laughter] before covid, i traveled 200 days a year and stayed in hotels. i am beginning to travel again. always in stead in what was going on in the hotel industry. i had a chance to talk to the head of hilton hotels, chris nassetta, about how the industry was suffering during covid, how it is coming back now, and changing itself to accommodate new demands from its customers. so, of all the industries in the united states, probably the lodging industry has been the most heavily impacted by covid. do you think that is a fair statement, you and the airline industry probably? chris: yeah, i think so. probably the cruise industry would top the list. we would be near the top of the list. it has been a difficult couple of years, but things have improved by a significant margin from where we were. we started out, in the first

quarter of 2020, at, you know, 8% or 10% occupancy, which we have never experienced that kind of downdraft, certainly in the 40 years i have been doing this. but, at this point, we are not through covid and where we were at the peaks of 2019. we are still 15% to 20% down, and generally trending in a positive direction. my guess is when we get the second-third quarter next year, we will be back to peak levels of demand, similar to 2019. what has been interesting and well documented, at this point, is the leisure business has been off the charts. if you look at demand for leisure, broadly, the rates on leisure, they are already higher than the peaks of 2019. the business segment in the group, in the meetings and events segment is on a slower recovery, which you would

expect. but, you know, building, building up momentum. david: so you think the worst is behind us for the time being? chris: i think the worst is definitely behind us. it is not a straight line up, but it is definitely behind us. david: as covid was hitting the industry, you had to close hotels and lay people off. i imagine that was difficult. chris: it was. having done this for almost 40 years, we open hotels all the time. at this point, we are opening more than one hotel a day in the world, still with covid, we are opening more than one hotel a day. we very rarely close hotels. that is something we do not focus on. when a hotel opens, it is open, most of them, forever. you open them up, they open the doors and they are open 24 hours a day, seven days a week. it's sort of an epicenter of activity and you rarely close them. you close them when you are going to tear them down for another user or build another hotel, so we are not very

experienced at closing hotels, but we gained experience.

but the difficult part was the people. hotels were closing. you know, it had a huge impact on our frontline team members, in the sense of necessitating furloughs, reductions in force, both in the field and corporately. it was hard to close hotels, and it was really the people side of it in the early stages of covid that were heart wrenching. david: now you're coming back and have the opposite challenge to open hotels and bring employees back. it is reported that it's hard to get employees to come back for the previous jobs or hire new people. you have to pay much more. so is that a big challenge for you reopening hotels? david: it is. -- chris: it is. at this point, almost all our

hotels are open but they are not fully staffed. the single biggest issue we have is getting labor back into the hotels, broadly, but particularly in certain roles like housekeeping and the culinary areas. while we have seen some easing of that over the last few months, we still have a ways to go. so it is something we are working very hard on. it is a complicated issue. it's hard. throughout this, there have been health concerns. people don't want to go to places where other people are congregating. there have been significant issues on childcare, particularly when schools were not open. people had nobody to take care of their children. there have been government policies that have compensated people that were unemployed in ways that provided some disincentives. and then to be honest, some , people have been reevaluating life and what they want to do, and some of those folks have said, you know, i would rather

go work in a warehouse rather than, you know, clean rooms and other things, so it is a complex equation that is going to take a significant amount of time to sort of work through. we are a lot better off than we were even three months ago. and when we wake up over the next year, we will be able to get i'm hopeful, labor back to , do what we do. david: one of the biggest concerns i assume the industry has is people like me have gotten used to using zoom, and therefore, instead of traveling across the country or around the world, i can zoom. is that it be concerned that people will say "look, zoom , expenses pretty good and i don't need to travel?" chris: it is not a big concern for me. and i think the world is figuring this out. a year ago, you know, i think people were saying, "gosh, this works, it is so efficient, maybe i don't need to do the things i was doing." i think, a year later, at least everybody i am talking to, they have realized there are limits to it. don't get me wrong, it is great

technology. we use it. it has facilitated our ability to continue to communicate during this crisis, but there is an unstoppable force that exists with humans, which is humans want to interact with humans. and that is not just for a vacation. humans need and want to interact on business to build partnerships, to innovate, to build culture, and they want to congregate at meetings and events, network, to grow their business, build relationships. so i have no real worries. every time as we have been recovering, if you look at, you know, the minute people start to feel like we are through the crisis, the demand for meetings and events, which is the longest lead, skyrockets. people are dying to meet. -- people are dying to get out. ♪

david: let's talk about your own background, how you came to be the president and ceo. where did you grow up? chris: right near here arlington, virginia. ,david: you went to school? chris: public high school in arlington, then uva, mcintire school of commerce, in a undergraduate business school. got out, and decided i wanted to follow in my father's footsteps and uncles footsteps to be in the real estate developing business, and ended up working for one of the biggest developers and still a good friend today, and my first job was actually ended up being a hotel, which was the willard hotel and office complex. david: so oliver carr was an

individual who built a big real estate company in washington, d.c. the company is still around. then you are reputed -- you were recruited to go to marriott? is that right? chris: no, in between that, i created an equity business, a tiny one compared to the one you are a part of. at the time, this would've been in 1991, the early days of private equity. certainly real estate private equity. our view was that there was going to be a massive opportunity as a result of the displacement going on in the s&l crisis so much inadvertent , ownership of real estate on the wrong people's balance sheets. we wanted to take advantage of that, so we did. for five years, my partner and i went out and had a fabulous private equity business. we did a lot of deals. probably it seems like small numbers today, but $500 million worth of deals across hotels,

office, did a lot of tax-exempt multi family -- multifamily in our fund and had a lot of great partners. one of whom was blackstone. then got recruited, my partner and i, to go to marriott after doing that for five years. david: host marriott that was the real estate arm of marriott. they had's but the company into two parts, one was a brand, marriott, that operates and manages the hotels, and the other owned the real estate. chris: yep. i came in as the coo and i became the ceo. the ceo retired and i took over. david: you are running host marriott. you did a good job as i remember. chris: i hope so. david: how did you come to hilton? chris: i mentioned, in my private equity days, i had gotten to know the blackstone guys really well. john gray, steve schwarzman, and

when i got to host as a result of that relationship and even their interest in the hotel space, we did a bunch of transactions with them. i got to know them really well, and, as a result of that relationship, i guess when they decided in july -- early june, late july of 2007, that they would buy hilton, john gray called and said, i have got the perfect job for you. we know you. we like you. we trust you. we think you have trained your whole career to run a company like this. we think there is a huge amount of upside and potential. this company has been grossly under managed. you should come do it. i said, what are you, crazy? i'm going to pick up my wife and my six little daughters, at this time, and move to beverly hills, california? -mostly -- i famously said we

are going to be like the beverly hillbillies. i don't see us on rodeo drive. but those that know john gray know he is very persuasive. the truth is, as i step back from it and talk to my wife is an equal partner in the decision, we realized how many chances in your life will you have where it is a counterparty like blackstone that you know really well and you trust, a business you know but with massive opportunity and it fits your skill set. and those things don't come together that often, so eventually, i decided we would be the beverly hillbillies and we moved. david: helton was a publicly traded company. blackstone bought them for $29 billion. some people thought it was a high price as a time. you come into manage the debt and so forth. you moved your six young daughters to california? chris: i did. david: and then, the great

recession comes, and, all of a sudden, the debt from the leveraged buyout seem to be burdensome. were you worried the deal was not going to work and you might go bankrupt? chris: david, i slept like a baby. i slept for two hours, woke up and cried, slept for another two hours, woke up and cried. kidding. the truth is there were some tense moments at the beginning of the great recession, but we never lost faith. john and i, particularly as the two that put our heart and soul into making this thing work, john gray and i, we knew we had a really good strategy, we were building a world-class team, you know, and i am a big believer on a steady hand on the wheel. what goes down will come up. don't panic. if you have a strategy, work the strategy, adapt it to the times, and you will get to the other side. and we did. david: you don't have as much gray hair as i do. do you get gray hairs? chris: i my question that. david: did you get any gray hairs from this experience? chris: definitely.

i definitely got more gray hairs and i will not say it did not stress me out on occasion, but i love a challenge. i had a great job so i love the company, the people, the board was incredible to me, some why did i -- so why did i leave? i wanted a challenge, something more global and needed fixing. the reality is the great recession was hard, stressful, and it was also an opportunity to stretch myself and to, you know, fix it and push myself to get to the other side. david: so blackstone ultimately injected more money into the deal. chris: they did. david: and bought some debt at a discount. the bottom line was they ultimately took a public or you took a public, and it turned out to be one of the most successful if not the most successful buyout in history. i think blackstone made a $14 billion or $15 billion profit. chris: that is what i am told. david: and when you took the company public, it was at a certain price. but today, i think the price is

up 600%, the stock is up 600%, so you must be pretty happy, right? chris: i think so. we did our job for blackstone and their investors, and they made a great profit out of what looked like a difficult set up in the great recession. anybody who bought the stock and held it has done exceptionally well. david: are you happy doing this and will you do it for the foreseeable future? chris: in this business, i would still say it is like a coiled spring coming out of covid. i feel like we have more to do. ♪ david: so ceos today are under pressure to speak out on publicly controversial issues, civil rights issues, voting rights issues, other things. do you feel, as a ceo, you should be speaking out? is that good for your shareholders or stakeholders? chris: it is a really complicated issue.

it always has been, but as the most senior representative for the company, for the company effectively through me to have a view, it has to be directly connected to our purpose. so i am constantly looking at the convergence of what is good for society but also good for our business. in looking at that point of overlap and making sure we are focused in those areas -- because here's the thing, again, in my humble opinion, today's world once you to have an opinion on everything and do everything. last i checked, focus and discipline matter. so we picked three areas that are most important to us, diversity and inclusion, which is clearly a huge part of our business. we serve an immensely diverse customer base, immensely diverse team member population. so, you know, that is an important area of work that i do

speak out on. on the social side, youth. one of the biggest issues in the world today that was a problem before covid has only gotten worse is youth unemployment. we want young people to desperately want to get into our business. it is definitely in that convergence. on the environmental side of it, if we don't take care of our destinations around the world, there is no travel business. so that is directly -- taking care of the environment and attending to climate issues, not only can we have a big impact on it, but it is intensely important to the future opportunities and travel and tourism -- in travel and tourism. david: now your company was started more than 100 years ago, a little more than 100 years ago, by conrad hilton. he is famous for many things. he built this company, but i was told that one time he made a famous statement about the most important thing in the hotel business. can you tell us what that was? chris: he did. i was not alive to see it. he was quite famous at the time.

he ended up on "the johnny carson show" on more than one occasion. i one point, as it goes, i have seen the clip, so it is not legend. johnny carson said, all right, connie -- she went by connie -- you are the biggest hotel man on earth. could you just give everybody in the audience one piece of advice? he said, "if i can give you one piece of advice, i would say, please, keep your shower curtain inside the shower." david: because otherwise it would leak out in the water would damage the hotel? chris: correct. david: do you ever communicate with him or get messages from him, saying you did a good job protecting my name? [laughter] chris: i haven't, but i have is bust in my office. david: really? chris: when we moved out of beverly hills, we had all sorts of paraphernalia related to the company, most of which i sent to the conrad hilton museum at the university of houston, because i thought it would be great to catalogue it and have it. the one thing i did keep his his bust, which i keep close to my

-- close by my office. i did not know conrad personally. i did meet his son, baron, who ran the company for over 40 years. and he was very close to his father. talking to baron, he was quite proud of what we had done with the company and suggested conrad would have been as well. david: conrad hilton was very famous and barron hilton were -- was famous, but the most famous person with the last name is paris hilton. is she involved in the company? chris: more recently, we have been working with paris on the marketing side of it. we have been working with her. she just got married, is on her honeymoon, and we are hoping to sponsor the honeymoon, so have been doing some work more recently. david: when i was growing up in a blue-collar family, we could not afford to go to a hilton. hilton was the ultimate brand in those days and we were lucky to go to a holiday inn or something like that. over the years, the hilton name

has not been seen as ultimately elite as ritz-carlton or four seasons. is that a fair statement in some respects? chris: yeah, it is. and by choice. if you go back 50 years ago, hilton was probably the leading pioneering luxury brand on earth, but as time went on and as we learned that segmentation mattered in the business, and customers had these different needs, we really tried, purposefully, to make hilton a four-star brand to allow for other things above it. david: so your ultimate luxury brand, is that waldorf-astoria? chris: waldorf-astoria. our luxury brands are waldorf-astoria, conrad, and lxr. but the very highest and is that, conrad, and the other is a collection of historic luxury hotels. david: in new york city, there is the famous initial waldorf-astoria, which has been

under construction and rehabilitation for a few years. you don't own it, but you will manage it, i presume. is it going to open in my lifetime? chris: let me correct one thing. that is not the original. david: oh, it's not? chris: the original waldorf-astoria was put together as a consequence of two members of the astor family feuding that had two hotels that were on the site of what is today the empire state building. and the way they settled the feud was one was the waldorf, the other was the astoria, and they settled the feud by connecting them with what they called peacock alley and it became the waldorf-astoria of new york, in the late 1800s. they ultimately sold it to what got redeveloped as the empire state building. and where the current waldorf-astoria is was built during the great depression and opened in 1931. and is under massive redevelopment and should reopen as what i think will be the best luxury hotel in new york in 2023

with 400 rooms in the same amount of high-end luxury apartments. david: so there is another rumor going around about another waldorf-astoria. it is rumored in washington, d.c., where we are now, the trump hotel, which has had its challenges, which has been reportedly sold to somebody, and you hilton, will manage it as a , waldorf-astoria. can you comment on that? chris: i have read that same rumor, but no i cannot comment on that. i have a strict rule. i will comment when something is done. david: ok. chris: the rumors are justified in the sense that there is a lot of work and discussion going on, but nothing is done. david: there is a new phenomenon that's not that new, airbnb. chris: what is that? david: when it came along, the hotel industry shrugged it off, but is it a real competitor and will you be in that business? chris: i do not think it is a real competitor to us. so if you think about what we do, it is something different than what they do. i think we co-exist with them quite well.

we deliver a high quality, consistent product with the amenities wrapped in service with all the technology, loyalty, and people pay us generally a big premium for that, because they want that level of consistent high-quality experience. what they do is something different. what they are doing is, by definition, cannot have the consistency, and the product, and the amenities that are tailored fit, because it is different. it does not mean it is bad. it just means it is satisfying different trip occasions. if you look at the numbers even pre-covid, we were co-existing quite well. we were at the peak levels of performance, at a time where they were growing by leaps and bounds, and we were not really seeing significant competitive threat as a result. david: as an investor, should i be looking at the hotel lodging industry as a good area to invest in?

your stock recently has gone through near all-time highs from very low points in time during the covid period of time. do you think there is a lot of growth left in lodging and hotel stocks? chris: you know, you are one of the smartest investors on earth, so i will not give you -- i am a lowly hotel guy. i will let you decide that. i think why the stocks have performed well is really quite simple. i think it is an underlying belief that the business, broadly, will -- demand in all segments will come back, and will ultimately over time growth rater than it was before, which i believe. and i think, in our case why we have performed well, i think investors believe the decisions we made that we had a capital light business that was growing faster than anybody in the industry before, the decisions we made during covid put us in a better position where, when we get to the other side of it, we are a higher market share,

higher growth, higher margin business. and the market, as you and i both know as a result of a whole bunch of things in terms of fiscal policy and the like, is looking further forward. i think when people look forward two and three years, they like what they see in the industry, and i like to believe they really like what they see in terms of what we can deliver. david: you have been doing this 14 years, if i count the numbers right, and you are 59 years old? chris: i am. david: have you thought you should do something else? i've already turned this company around, made a lot of money for investors and shareholders and yourself, are you happy doing this? well you do this for the foreseeable future? chris: i will do this for this foreseeable future. i love what i do. the reality is, we have accomplished a lot as you describe. we made blackstone a lot of money, we made shareholders money, and more importantly, we have grown the business and have been a huge engine of opportunity. if you think about the jobs we have created around the world, all the communities we have made

better places, all the ownership groups who we have helped to grow the business, and having built a world-class culture, the opportunities we have created for upper mobility for people. in this business, i would still say it's like a coiled spring coming out of covid particularly. so i feel like we have more to do. my job is far from done. ♪ this is elodia. she's a recording artist.

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