"By Golly!"
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At one point during the lavish opening of almost every new Hilton hotel, the houselights dim and spotlights pick out a lean, tall man with a shy smile on his permanently suntanned face. He escorts a pretty girl--usually a new one each time--to the center of the ballroom floor. Then, to the slow, stately strains of the violins, they point their feet, bow, turn about and sweep elegantly into an unfamiliar step. The dance is the courtly Varsoviana, brought to America from the palaces of Europe by Mexico's Emperor Maximilian; the man who puts his foot out so skillfully is Hotelman Conrad Nicholson Hilton, who calls the tune for the $293 million Hilton Hotel chain. Hilton has adopted the obscure Varsoviana as a ceremonial dance of good luck with which to open each of his new hotels--and lately he has been dancing more frequently than ever before in his 44-year career.
In his 76th year, a full decade after most businessmen retire, Hilton is busy spotting the world with hotels wherever the U.S. tourist and businessman alight, girding the globe with new links in the longest hotel chain ever made. Already this year, Hilton has opened new hotels in Teheran, London, Athens, Rotterdam, Rome, Hong Kong, Tokyo, New York and Portland, Ore. Under construction are two new Hiltons in Paris, one at Montreal airport, and others in Brussels, Honolulu, Tel Aviv, Guadalajara, Rabat, Mayagueez, Tunis, San Francisco, Milwaukee, Worcester, Mass., and Washington, D.C. Soon to be started are hotels in Curac,ao, Cyprus, Addis Ababa, Dublin, Manila, Caracas, Barbados, St. Paul and Kuwait. Fortnight ago, Hilton added the Dorado Riviera in Puerto Rico to his empire, and last week he took over the Arawak in Jamaica.
By the end of 1964, Hilton will have just as many hotels abroad (39) as he will have in the U.S. Hilton's overseas hotels last year brought in more than a quarter of the chain's net operating profit of $5,700,000, and Innkeeper Hilton expects that they will soon account for more than half his earnings. Not counting the many millions that foreign investors will have put into these overseas hotels, the Hilton chain by 1964 will be worth well over $300 million. "Where does Hilton go from here?" asks Lawrence Stern, chairman of Chicago's American National Bank, a Hilton director. "To the moon!" Hilton people get to talking like that.
Two-Way Streets. This year nearly 12 million Americans--12% more than last year--will travel outside the U.S., and a surprising lot of them will want the comforts of home. Newly affluent Europeans and Japanese have also joined in the wanderlust, and the world's byways are fast becoming two-way streets. Virtually everywhere there is need for modern hotels. "Very few new hotels have been built outside North America in the past 40 years," says Conrad Hilton. "In Istanbul ours is the only first-class hotel in a city that for a thousand years was the biggest city in the world. There have been no great hotels in Paris for 40 years, and the same is true of Rome and Athens."
Spying the same opportunities, other U.S. chains are following Hilton abroad as fast as they can. The second biggest U.S. hotel chain after Hilton, Sheraton Corp., now has seven foreign hostelries; Hotel Corp. of America has five, and Knott Hotels three. But Hilton's biggest U.S. rival overseas is Intercontinental Hotels Corp., a Pan American World Airways subsidiary that has no hotels in the U.S. In the past six years, Intercontinental has added 13 hotels abroad, to bring its total to 19, expects to double that number within four years. Its hotels are generally smaller than Hilton's, however, and have yet to return an overall profit to Pan Am.
Last of Its Kind? The rush for rooms with a view abroad is a godsend for the big U.S. hotelmen, since business at home is not what it used to be. Speedy jets have made it possible for businessmen to fly into a city and out again swiftly, transacting all their business in one day. Families traveling by car have long since bypassed downtown hotels for motels and plush motor hotels. Hotel occupancy rates have shriveled from 93% in 1946 to 62%. More and more U.S. hotels depend on convention business--and, luckily, it is good and growing. Last year 37% of all downtown hotel business came from conventions. In medium-sized cities that no longer attract the conventioneers, such as Buffalo and Hartford, hotels are having a hard time surviving.
In the Hilton chain, during this year's first quarter, domestic revenues fell 10.6% and profits by nearly a half, offsetting profits from abroad. The recently opened New York Hilton (2,153 rooms) in Rockefeller Center offers what new U.S. hotels need nowadays if they hope to succeed: free parking to compete with the motels, expensive specialty restaurants to attract the high-livers, and lots of room for conventions to meet. It may be the last of its kind. "With perhaps an exception here and there," says Conrad Hilton, "we are not going to build any more large hotels in this country, and there are no more hotels in the U.S. that I want to buy."
Wringing the Dollars. Even so, Hilton is doing better than most hoteliers in the U.S., and better than any abroad. An English author once described American tourists as people who "dare everything and risk nothing"--and nowhere do they risk less than at Hilton hotels. Whether he is in Teheran or Trinidad, the traveler can be sure that Hilton will offer him a clean bed, pleasant surroundings, plentiful ice water, and food that he can safely eat. He can also be sure that, while supplying American comforts, Hilton will wring his dollars out of him as efficiently, as economically and as unobtrusively as possible.
Hiltons are assembly-line hostelries with carefully metered luxuries--convenient, automatic, a bit antiseptic. Conrad Hilton's life is rooted in the belief that people are pretty much equal, and that their tastes and desires are, too. His hotels have made the world safe for middle-class travelers, who need not fear the feeling of being barely tolerated in some of the older European hotels; at a Hilton, all they need is a reservation and money.
Hilton's U.S. hotels are generally good commercial hotels, but the Hiltons abroad are luxury tourist hotels that are more like resorts than hostelries. Hilton has sited on some of the finest hotel locations in the world--looking up at the Parthenon in Athens, near the Diet Building in Tokyo, overlooking the Vatican in Rome and the Queen's private garden in London, on the Nile in Cairo and above the Bosporus in Istanbul, at the foot of the Elburz Mountains in Teheran. All of the hotels glisten and glitter, with an architecture that ranges from international slab to a crosshatched radio-cabinet style. They lean heavily on the anonymity of modernism, and display a spartan opulence designed as much to save the hotel money as to attract the clients. In countries where there is no previous standard of hotel excellence, Hiltons are oases; in such old cities as Rome, London or Paris, they are apt to seem a little off-key and alien.
Susceptible to Flattery. As the force that created this empire, Conrad Hilton might be expected to be as calculating, as antiseptic and as glossily sophisticated as his hotels. The surprise about Hilton is that he is so much like the guests he caters to. Boyish, candid, trusting, he never fails to be amazed and pleased--even astonished--by the world around him. He cannot get over the speed of jet planes or his possession of a $100 Texas-style Stetson, whose price he mentions to anyone who will listen. He is susceptible to even the most transparent flattery. "You know," he says, "after the Rotterdam opening, the president of the corporation that owns the hotel came up to me and said, 'Your dance was the greatest thing that happened here.' That touched me most." When something impresses him, he often slaps his knee and exclaims: "By golly!"
Hilton refuses to comprehend bad news or business reversals ("Don't bother me about that," he says), and his top aides instinctively try to protect him from the harsh realities of the world. Says one: "For all his financial genius, he's the kind of man who can't catch a plane by himself." He is essentially a lonely man, and his closest friend is neither a businessman nor one of his four children, but his personal secretary for 21 years, Olive Wakeman, fiftyish, who acts as his chief buffer against the outside world. "I've got to protect him," she says. "He's the most naive man for his experience I've ever seen; he will not believe that anyone would tell an untruth."
Hilton has all the trappings of the very rich, but they hang indifferently about him. He has four cars, a private plane, a pro football team (San Diego Chargers) and a 61-room mansion in Bel Air, Calif., which, with Hearstian grandeur, he has named Casa Encantada. He lives there alone and, with 19 servants at his call, does nothing for himself; he will not even buy his own clothes. While his hotels like to proclaim their appeal to gourmets, Hilton is indifferent to fancy food, preferring to dine on corned beef hash, tuna-fish casserole and tea served in plastic cups ("It's more sanitary."). Though his hotels pride themselves on the original works of art they hang in lobbies and guest rooms (the New York Hilton has 8,500 specially commissioned works), one of the least appreciative viewers is Conrad Hilton. "He wouldn't know a Rubens from a Ribicoff," says an aide. The decor of Casa Encantada gives the total effect of the main lounge of the Queen Mary.
Courtly Charm. Twice divorced, the last time after a tempestuous marriage to Zsa Zsa Gabor ("If I had waited one hour more, I never would have married Zsa Zsa," Hilton regretfully told a friend), Hilton now prefers the company of younger women--mostly airline stewardesses in their early 20s. He treats them with courtly charm, asks nothing of them except that they be attractive and pleasant companions for dinner and dancing. More often than not, he stays home alone and goes to bed after an evening of television. His favorite show is Sing Along with Mitch, and Hilton explains: "I don't sing along, but I sometimes do a little dance." Very conscious of his appearance, he carefully stays a trim 171 Ibs., abhors fat men to the point where he does not even like to do business with them.
Hilton's ego is as big as his house. He keeps the vanity press busy printing books praising himself, and his autobiography, Be My Guest, is in more of his hotel rooms than the Gideon Bible. A Roman Catholic who is relieved to be back in good standing after shedding Zsa Zsa, Hilton constantly composes prayers to the Almighty and has them printed in Hilton employee publications, likes to think that "God is a gentleman." His speeches are sometimes written by a Jesuit Priest, Father Thomas Sullivan of the University of Santa Clara, and at big receptions Hilton does his best to divide his time evenly between the clergy and the pretty girls.
For a man of such feelings, it would not be enough to extend his hotel chain merely for the sake of profit. His international expansion becomes a Hilton plan for world peace in which "people gather together in our hotels and get along with one another." "We think we are helping out in the struggle that is going on in the cold war today with world travel," says Hilton. "These hotels are examples of free enterprise that the Communists hate to see." He likes to say that "we beat Communism into the Caribbean by ten years," and one of his top financial backers, Henry Crown, adds: "We're second only to the Peace Corps."
Audacious Horse Trading. Still, there is a hard streak of practicality in Conrad Hilton. The son of a successful merchant in San Antonio, N. Mex., he put down his entire savings of $5,000 in 1919 to buy his first hotel, the bustling Mobley in oil-rich Cisco, Texas. He managed to put together a small chain in Texas before the Depression wiped him out, bounced back with shrewd and often audacious horse trading to collect a lineup of prestigious hotels. His first major move was to acquire the high-priced Town House in Los Angeles, but he really broke into the big time in 1945 when he bought Chicago's 3,000-room Stevens (which had been occupied by the Army during the war, was later renamed the Conrad Hilton), the world's largest hotel, and Chicago's esteemed Palmer House. The deal that gave him the greatest satisfaction and made him the nation's leading hotelman came when he made the Waldorf-Astoria a Hilton hotel in 1949.
While he was rushing about adding links to his U.S. chain, Hilton's unfailing courtesy launched him almost by accident into the international hotel business. When Puerto Rico decided in 1947 that it needed a first-class hotel to help lure U.S. businessmen to set up shop there, Teodoro Moscoso, chief of the Puerto Rico Development Corp. (and now the director of the Alliance for Progress), fired off letters to leading U.S. hotelmen inviting them to come down. Only Hilton answered promptly, with a warm, friendly letter that began by greeting the Spanish-speaking Moscoso as "Mi estimado amigo." After that, Hilton had no difficulty signing a partnership deal with Puerto Rico to build the Caribe Hilton, now one of the most popular and profitable hotels in his chain.
Hilton's own board of directors, composed mostly of Midwestern and Western businessmen, were appalled at the thought of moving out of the U.S. But they decided to let him have some hotels abroad as playthings; they voted him a paltry $500,000 and set up the international division as a separate subsidiary so that its failure (which they expected) would not pull down the whole company. Working with profits from the Caribe, Hilton in the next ten years built eight more international hotels from Mexico City to Berlin. Meanwhile, in the U.S., Hilton added the ten Statler Hotels to his collection and started a little belatedly to build his chain of eight Hilton Inns to compete with motels.
Princely Aloofness. Even at his age, Hilton is very much in command of his empire and often seems to have more energy than his younger colleagues. He regularly scans reports from each hotel and reads complaints that guests send in. If he sees something amiss, a hotel manager somewhere will get a quick telephone call from Hilton. Recently Hilton launched a big drive to make Hilton employees more courteous to guests, had behind-the-scenes spots in Hilton hotels plastered with posters that asked: "Have you smiled today? It's bound to give you a lift."
In keeping with his restless nature, Hilton is particularly fond of making flying visits to his chain or searching out new hotel sites. He scrambled like a mountain goat over Rome's Monte Mario to pick out just the right spot for the Cavalieri Hilton, declared with the spirit of a Medici commissioning a palace that he wanted it to be "a balcony of flowers overlooking Rome." Whenever Hilton appears at one of his hotels, the staff jumps to give him royal treatment--and sometimes stumbles. His bathtub at the New York Hilton was cracked, and at the Waldorf recently a flustered waiter forgot to serve him the ham he ordered with his eggs. In London he was delayed in a faulty elevator for 15 minutes, and in Amsterdam every spigot he turned in his room produced only boiling hot water. Yet Hilton is a gentle executive who never has a sharp rebuke for an employee's mistakes, seems almost apologetic when he points them out.
He presides over board meetings with a princely aloofness. "I, Conrad Hilton, can do anything I want to do," he declares with the assurance of a man who owns or controls 30% of the company's stock and a clear majority of its esprit. Actually, Hilton has had to wear down objections from his board to some of the biggest steps the company has taken, including the purchase of the Waldorf and the takeover of the Statlers. Hilton listens to the board's advice and usually gives in gracefully to strong opposition to his schemes. But when he thinks he is right, he is hard to turn aside. "Behind that pleasant exterior is a hard business mind," says Donald Gordon, president of the Canadian National Railways, which owns the Hilton-operated Queen Elizabeth hotel in Montreal. "He is not belligerent, but he is tenacious."
Into the Pool. Hilton management needs tenacity to face the problems and frustrations of running a worldwide hotel chain. Long before their foundations were laid, most of Hilton's hotels abroad became centers of controversy, sometimes discreetly abetted by rivals. The Communists on Rome's city council battled Hilton for 2 1/2 years before he got a permit; Londoners objected to the Hilton's height and its proximity to Buckingham Palace; Montreal's French Canadians fought for a French name for the Queen Elizabeth. Openings have often been ill-starred; Hong Kong's opening last month was marred by a water shortage, and the death of Pope John canceled elaborate plans for opening festivities in Rome.
Conrad Hilton so revels in lavish openings that he sometimes spends as much as $150,000 on one. He tries valiantly to give a little speech in the native language, no matter how disastrously it turns out, loves to mingle with the celebrities and movie stars he has invited. There are other types about, too. The honored guests at the Portland, Ore., opening threw furniture into the swimming pool and made off with the portrait of Hilton that hangs in every Hilton lobby. At the New York opening, some wayward members of the press took their whisky by the bottle instead of the drink, someone painted a swastika on a Dong Kingman mural and the overzealous door guards tried to keep out Mayor Wagner. In Rotterdam all the lights went out while most of the guests were dressing for the party.
Drenched Chefs. Once the hotels open, the bugs that develop during the shakedown period can reach plague proportions. Except for the top supervisory people, Hilton overseas hires locals almost exclusively. In Cairo it broke tradition by hiring women to wait on table. The girls were reluctant at first and flatly refused to wear frilly aprons because they are a symbol of service. Now the jobs are coveted not so much for the higher pay as for the chance to meet eligible men. In Athens a maid who was warned to be thorough in her cleaning dismantled a guest's electric razor so completely that it could not be put back together again.
The Hong Kong Hilton was nearing its opening date when authorities discovered that the $100,000 worth of Chinese furniture and decorations in the hotel had been imported from Red China in violation of U.S. law that American citizens cannot deal with the Red Chinese; it all had to be replaced with substitutes. In London the automatic-elevator doors closed so fast, the telephones worked so sporadically and the Muzak system sometimes shrieked so loudly that Hilton had to dispatch experts from the U.S. to straighten things out. The air-conditioning failed in one of the New York Hilton's kitchens, driving the heat up so high that it set off the fire sprinklers and drenched the chef and the food. Someone discovered that the automatic billing system liked to drop decimals after one guest was charged $3,850 for a telephone call.
No Brash Intruder. Most cities around the world are delighted to have a Hilton, and scores vie for them. A Hilton is a boon to the tourist business, since many Americans (who make up about 50% of all Hilton's guests) will go more readily to a city where they can find a modern hotel with a reassuringly familiar name. Egypt's take from tourism increased $12 million a year after Hilton moved in; Turkey gained $2.5 million in foreign exchange. A Hilton usually forces other hotels in the area to improve their standards (their celebrated old-fashioned personal service sometimes gets a little inattentive). In such cities as Istanbul, Cairo and Amsterdam, the Hilton has become a social center for politicians, businessmen and local society. "Now a country's reputation is made with Cadillacs, an airline and a Hilton hotel," says one Hilton executive. "That's the credential to get into the United Nations."
For all their modernity, Hilton hotels try to strike a local note in each country; regional themes and regional materials are used (often quite tastefully), and local architects and artisans are employed whenever possible. Hilton also likes to put regional foods on his menus (his chefs in Teheran dug deep into history books, say his flacks, to come up with marinated filets apadana prepared just the way Xerxes ate them in 470 B.C.). But this has to be done sparingly: the U.S. guests do not want anything too outlandish, and many of the locals think it more sophisticated to eat European cuisine. "Far from being the brash intruder," wrote Nigel Buxton in Britain's Spectator, "Hilton is probably more concerned than any other international hotel operator to suit his projects to the local scene."
Still, Hiltons are not always appreciated, being regarded not only as hotels but as a cultural transplant from America. The local "atmosphere" sometimes misfires. Spaniards laughed the peasant-garbed waiters at Madrid's Castellana Hilton right back into tie and tails, and Hilton had to change the name of the Opium Den bar in his Hong Kong hotel after the Chinese took offense (it is now simply The Den). The popular BBC television satire show, That Was the Week That Was, opened fire at Hilton with a mock Bible lesson: "Brethren, in the beginning there was darkness upon the face of the earth and there was no iced water. Then Hilton said: "Let the earth bring forth Hiltons yielding fruit after their kind. And it came to pass that Hiltons covered the face of the earth and there was a great flood of iced water, and the darkness was greater than it was in the beginning."
Rigid Watch. Along with iced water, Hilton has introduced some handsome profits to the natives. Puerto Rico, for example, has racked in $18 million from its share of the Caribe Hilton. The usual Hilton arrangement is for local capital--either private or government--to supply the land, the building and the furnishings; Hilton puts up the operating capital and runs the hotel. Two-thirds of the gross operating profit goes to the hotel's owners, one third to Hilton. This method enables Hilton to extend his chain rapidly without putting himself deeply into debt. He gives his local managers autonomy to adjust to local conditions and to set rates (which vary from $14 a night in London for a single to $5.75 in Berlin). The proof of the system's success is that every one of the Hilton hotels abroad that has gone through its initial shakedown period is earning money.
The very spread of the chain helps to pull in the guests; Hilton operates a globe-circling reservation system of 126 sales offices, which produce 25% of his room business. Each hotel keeps a rigid watch on costs and sends daily reports to Hilton headquarters, which knows within 24 hours whether a banquet in Cairo or Hong Kong made money. To tighten costs, two teams of executives surveyed 15 Hilton hotels in the U.S. last year, came up with findings that will save the chain nearly $2 million. All this has helped to bring the Hilton chain's labor bill down to 40% of its revenue, v. 45% for most transient hotels.
Cheaper Bourbon. The secret of good innkeeping is to save money without letting the guests realize that any scrimping is going on--and Hilton is a past master at the art. Hilton has found that grass-cloth wall covering eliminates repainting and keeps looking new after years of service, now imports large quantities of it from Hong Kong for his hotels. The wall-to-wall plush carpets on the floors of Hilton hotels actually save money because they make it unnecessary to finish the floor underneath, and the use of Urethane instead of foam rubber in mattresses is cheaper and the sleeping just as good.
Hilton's hotel rooms are growing larger (minimum: 11 ft. by 14 ft.) and hallways, which bring in no money, narrower. Most Hilton lobbies are kept purposely small and bars large so that loitering guests may kill time at a maximum profit to the management. Automation is used wherever possible. TV, in place of watchmen, guards exits from some Hilton hotels to prevent pilferage (objects in rooms are made purposely unwieldy for the same reason), and silverware is often cleaned ultrasonically. Behind the scenes at the New York Hilton a computer billing system hums quietly, eliminating paperwork by taking every charge directly from cash registers all over the hotel and adding them to each guest's bill.
In the dining rooms a battery of Hilton tasters has effected a saving with the discovery--so they say--that Manhattans are much better when made with the cheapest bourbon and that Icelandic lobster is better and cheaper than jumbo shrimp in many seafood dishes. Each of the five restaurants in the New York Hilton has a culinary theme--Spanish, French, Old New Orleans, etc.--but all the food is cooked in one mammoth kitchen. Hilton also saves money by purchasing its turkeys only once a year and freezing them, by having its French fries blanched with oil before they leave Idaho and by reducing the number of items on menus to just the most popular. Hilton serves 35,000 meals a day in its foreign hotels alone.
Only the Nice. To make such an enormously complicated, 24-hour a day business work, Hilton has surrounded himself with a team of crack operating people. In terms of authority, the No. 2 man in the Hilton chain is astute and ambitious Robert J. Caverly, 44, who watches over all operations. General Manager Curt Strand, 42, is the boss of the international division. Chicago Financier Henry Crown, who is worth $500 million himself and has interests in everything from General Dynamics to the Chicago, Rock Island & Pacific Railroad, has been a close Hilton associate ever since he joined him in buying the Palmer House, is Hilton Hotel's second biggest stockholder, with 10%.
The big question in the Hilton chain is who will take Hilton's place once he-steps down. The betting is that it will not be any of his sons (all of whom are by his first marriage; he and Zsa Zsa have a daughter, Francesca, 16). His eldest son, Nickie, 37, has settled down after his playboy days as Elizabeth Taylor's first husband, is now a hard-working vice president in charge of Hilton Inns; but Nick, in the eyes of many, lacks the ambition and imagination to succeed his father. Barren Hilton, 35, --also a vice president--has his father's flair for deals, but the board blames him for losing money running the Carte Blanche credit card venture. Another son, Eric, has worked his way up through the ranks to become resident manager of Houston's Shamrock Hilton, but is only 30. Many are betting on fast-rising Bob Caverly, but there is also talk that Hilton might go outside the company to tap someone like able Howard Johnson the younger, who runs his father's coast-to-coast-franchise restaurant and motel business. Merger talks between the two companies, however, were broken off--at least for the time being--a fortnight ago.
The one person who holds the answer is Conrad Hilton--and he is bored by the subject. "You see," says Olive Wakeman, "Mr. Hilton won't face things that aren't nice." An eternal optimist, Hilton considers everything about himself and his way of life indestructible and unchanging--unless he changes it. Resting up one fine afternoon recently before a globe-girdling trip, he sat on the terrace of his enchanted house in Bel Air, a fistful of peanuts in his hand. Loudly he whistled again and again for a half-domesticated bluejay named Chairman of the Board. The bird flew away many months ago, but Conrad Hilton still refuses to give up hope that one day it will return.
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