Mark Hoplamazian has run Hyatt Hotels for nearly two decades. He has navigated the 2008 financial crisis and a pandemic that sent hotel demand to zero overnight. But sitting down with Fortune at the Great Place to Work For All Summit in Las Vegas, the CEO said the moment he finds himself in now has a different texture—less acute than a single catastrophic shock, more corrosive.
“I would describe it as unsettled, as opposed to maybe completely negative,” Hoplamazian said. “There’s been a period of time during which there’s been a lot of cubbyholing of people based on their gender identity, or based on their sexual preferences, or based on whatever. And that creates a lot of stress. It creates a sense of us versus them. It creates a sense of disquiet.”
For Hoplamazian, the response to that unsettledness is the same thing it’s always been: culture. Hyatt just earned its 13th consecutive spot on Fortune‘s 100 Best Companies to Work For list. Those milestones aren’t incidental. They are, in Hoplamazian’s telling, the operating system.
“We’re a company that actually relies upon and works on emotional connectivity,” he said. “It’s not transactional.” At Hyatt, he added, “We don’t live in a transactional world.”
Culture that runs the company
That philosophy is rooted in a realization that Hoplamazian said he came to early in his tenure, when he gathered teams from a number hotels and asked them a simple question: why had they stayed? The average tenure of a Hyatt general manager, he noted, is over 25 years. The answer, after a lot of discussion, came down to a single word: care.
“They felt a sense of being cared for, and they were fulfilled in caring for others,” Hoplamazian told Great Place to Work CEO Michael C. Bush. In the hospitality industry, he added, people often talk about service and serving others. “But the key difference is empathy. You start with empathy to understand what the needs of that person are.”
The CEO who asked his kids for feedback
He formalized it into an equation: empathy plus action equals care. That framework, he said, was shaped by a moment that hit closer to home than any boardroom conversation. After taking an empathy assessment, Hoplamazian got uncomfortable scores. “I took this assessment and I saw the results from my empathy scores were kind of low and I was like, ‘Well, that’s just not right.'” He said he did what most people do and rejected it—but he also asked his kids about it. He was crushed. They told him that on their morning drives to school, he was almost always on his phone. “Dad, it’s green, time to go,” they’d learned to say. “and afterwards, I was like, ‘Oh, my God,’ like, pay attention to your behaviors and wake up. And that was a turning moment for me.”
That willingness to be accountable is the same quality that he said he demands from Hyatt’s leaders. They see themselves as a family, but direct with each other the same way his kids were with him. “Some people will say, if you’re a family, that means you’re not really willing to make tough calls or give people direct feedback,” he told Fortune. “And I would say, on the contrary, it’s an act of kindness to actually give that feedback to people.” Warmth is not the opposite of accountability, he said, it’s what makes accountability possible.
The war’s toll on travel
The business case for that culture, he said, gets clearer in disrupted times, and right now, disruption is coming from multiple directions. The Iran war has delivered a swift and tangible blow to the hospitality sector. The World Travel & Tourism Council estimated in March that the conflict was already costing the global travel industry at least $600 million per day in lost international visitor spending. Hyatt, which operates properties across the Middle East, felt it immediately.
“There’s been short-term impact for sure,” Hoplamazian acknowledged. “The transiting over the hubs in the Middle East, Dubai, Abu Dhabi, Doha, those are big hubs. And the world crossroads are there. It’s from Asia on the way to Europe, or vice versa.” He declined to predict when the damage would dissipate, tying it directly to the duration of the conflict. “I think it’s very hard to predict how long it will take for that to dissipate to the point where it’s not an act of thought for people before they jump on a plane to go to Dubai, for example. I don’t know how long that will take. It kind of depends on how much longer this whole conflict ensues.”
When asked about the impact on tourism and travel to the Middle East, Hoplamazian called it a “big hit” to the region, “the immediate impact is very significant. So things have really come down for obvious reasons, like you’re adjacent to a war zone.”
The world wants to move
Still, he resisted a pessimistic long view, pointing to an unexpected China travel boom, a Japan market running hot, and a U.S. consumer who keeps spending, partly, he acknowledges, because of who Hyatt serves. “The unfortunate reality is we are living in a K-shaped economy,” he said. “And we [Hyatt] serve high at the upper part of the K, primarily.” But he said something more structural is at work than demographics, arguing that travel has moved down the Maslow hierarchy of needs. “People feel a desire to travel … It’s like not quite shelter and food, but it’s pretty close thereafter.”
Hoplamazian returns to the “human connection factor,” arguing that his industry is only going in one direction long-term. “There’s a human desire to explore and to discover. And as soon as people have more money to be able to spend discretionary income, that’s what they want to do.” Calling the desire for experiences over goods “a major mega theme” of the 2020s, he predicted that Hyatt’s investment for decades in the human element will continue to pay off. “Businesses are a little bit more reactive to the exigency of the moment, so they may actually cut back in the immediate term, but longer-term, medium to long-term, this is a phenomenal business to be in. The world wants to travel. The world’s becoming more connected. And that’s not going to stop.”
This story was originally featured on Fortune.com
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