When most kids short of their 16th birthday ask their parents for a lift, it’s usually to the mall, a movie, the ball field, maybe a date. Whimsy and youth often go hand in hand, but for Joe Berger, even at an early age, he was thinking about his future: Instead of chasing a good time, he was pursuing a career. In those early days, Berger was appealing to his parents for a ride to work, at the Dulles Airport Marriott outside Washington, D.C., where he was a bellman. “I didn’t even have a driver’s license at the time so my parents had to drive me to and from the hotel for my job,” he said.
Berger is now old enough to drive himself to work. He does so on a daily basis, to his job at Hilton Worldwide in McLean, Va., where he is president, Americas for the company, responsible for the operations functions of more than 300 corporately managed Hilton Worldwide hotels and Hilton Grand Vacation resorts throughout North, Central and South America.
What might sound like a daunting task, Berger takes in stride, something that can only come when you have been part of an industry for 40 years.
At once, opening doors and helping with bags at the Dulles Marriott, Berger knew that he’d spend the rest of his life working in the hospitality field. “At that point, I fell in love with the hospitality business—taking care of guests, being a part of a hotel team and all the excitement that surrounds a hotel,” Berger, a Reston, Va., native, said.
Turns out, though Berger has been working in the hospitality industry for four decades, at its core, he believes not too much has changed. Yes, technology continues to improve and there are many more stakeholders (not to mention, more brands) but the essence of hostelry, according to Berger, remains the same. “The hotel business has not changed in the sense that it is still about delivering warmth and hospitality to our guests, building great teams and having a place where our team members are valued and cared for,” he said.
Still, he is not oblivious to the shifting tide of the hotel business; the model has and continues to change, introducing new challenges that require different skill sets. “What has changed is the ownership of hotels,” Berger said. “We have seen a shift from the hotel companies as primary owners, morphing to insurance companies as passive real estate investments, to very active financial institutions and private equity firms who are highly engaged in the business.”
Consider Hilton. For some years now, and under the helm of CEO Chris Nassetta, whose leadership Berger refers to as the company’s “special sauce,” Hilton has followed an asset-light approach, shedding owned real estate in favor of managing hotels or franchising brands. It’s a strategy that has served Hilton, and other hotel companies, well—a tactic Wall Street tends to reward. Hilton’s most notable sale was last year when it pocketed close to $2 billion in the sale of the Waldorf Astoria in New York. (No matter that it promptly used the proceeds from the sale to acquire five properties for $1.76 billion, a move it made to defer capital gains taxes from the Waldorf sale. The company has since sought to spinoff its hotels into a REIT.)
Still, there’s a palpable shift in the overall value and focus of the larger hotel companies, a move that has implications. “As hoteliers, we need to understand the real estate business from the institutional owner perspective and their goals and objectives as owners of hotels,” Berger continued. “As a result of this ownership shift, the skill set has had to change for both the GM and director of finance. They have had to learn not only how to speak the language of our owners, but to have an understanding of how the real estate part of the equation works at the hotel level.”
|The Hilton Buenos Aires, in the harborside area of Puerto Madero, includes a 72,290-square-foot convention center.|
Berger should know: he used to be a GM. Four years, in fact, in the early ’90s at The Westin St. Francis in San Francisco. (Berger’s also had GM stints at Pittsburgh’s Westin William Penn, since renamed the Omni William Penn, and the Fairmont San Francisco.) He alluded to being a GM as “the greatest job in the world,” and one that takes sharp focus and discipline. “A good GM is a CEO of their hotel,” he said. “In today’s world, they must speak the owner’s vocabulary and understand the real estate world.”
Though not a GM any longer, the aptitude needed for being one still courses through his veins. As if rote, he is able to tick off what an effective GM embodies—a quasi manifesto of necessities, like the samurai’s bushido: 1) A successful GM needs to understand how to drive both more revenue and more market share in his or her market; 2) A GM is a leader and the face of his or her hotel; 3) He or she must understand how important it is to nurture and take care of the team-member culture and drive guest service; 4) It is a job where you have to be good at a lot of things. You cannot survive with only being good with one or two skills. You have to be able to be versatile; 5) It is all of these things that makes the job of the GM.
He’s undoubtedly taken that ethos to Hilton, where he is in charge of Hilton Management Services in the Americas, which, as its title indicates, provides management services to hotels. And although Hilton in the preceding years has shied away from hotel ownership, morphing further into a pure franchise and management company, it’s that ownership mentality that Berger said makes Hilton Management Services so effective.
“What separates us from other management companies is that we have a very owner-centric management philosophy,” he said. “It guides us and allows us to harness the power of our brands. And no one knows how to use the resources of our brands like we do.”
Brand power was clearly one of the reasons Blackstone Group decided to acquire Hilton back in 2007 and take it private before an IPO some six years later. Berger knows Blackstone well: from 2005 to 2008 he was president of LXR Luxury Resorts and Hotels, a collection owned by Blackstone. His work there helped lay the groundwork for what he is doing with Hilton now.
“Being the president of LXR was a great experience for professional growth because it gave me a deeper understanding of the owner/operator perspective,” he said. “Ultimately, it enabled me to bring the perspective of the owner and operator to our management business and help our management business think more like owners so we can deliver exceptional returns.”
|The Hilton Chicago on Michigan Avenue is one of 300 hotels in the Americas under Berger’s operational eye.|
Much ballyhoo was made when Blackstone returned Hilton to the public markets. It raised over $2.3 billion in the biggest-ever hotel IPO. Berger had the chance to work for Hilton as both a private and public company, but admitted there is little difference. “The value in being a private company was that it gave us an opportunity to work on the things that we needed to do in a private company environment, which successfully prepared us to emerge as a stronger public company,” he said. “The difference between a private and public company is there is no difference.”
Around the time Blackstone acquired Hilton, Nassetta, who prior headed the REIT Host Hotels & Resorts, was brought on board to lead the company. It was just another shrewd choice in a waterfall of astute decisions Blackstone has made over the years. In a 2014 article, the Washington Post referred to Nassetta as the man who turned Hilton around, responsible for global growth and growing profitability. Berger is as complimentary of his boss. “Chris has been a visionary and has kept us focused on our future and on what we as a company need to do to continue being successful,” he said. “He is a big part of the success of our development pipeline and brands.”
One thing Hilton isn’t in short supply of is brands. In total, it has 12 with another soon to be announced in the midscale space. It’s the continual evolution of Hilton’s product that Berger champions and, moreover, how Hilton interacts with its guests over the course of these changing times. No surprise, it’s technology that is paving the way.
“Hotel operations has a very bright future based on the dynamics of older versus younger travelers,” he said. “The changes that are coming down the pike will be influenced by technology, which is very important to the hotel industry, as it is to other businesses looking toward the future. More so than ever, people want things now and choice. As an industry, we have to be able to supply that.”
He cites such initiatives as guests having the ability to choose their own room seamlessly. In July of 2014, Hilton announced it would provide this capability to Hilton HHonors members.
Customers have never been more in control of their hotel experience, from research and booking all the way through to the stay itself. While Berger speaks of Hilton’s guests specifically, it’s industry-wide.
“Our guests already have unprecedented choice and control over their entire hotel stay,” he said, further citing Digital Key, a new feature on the Hilton HHonors app that allows guests the option to bypass the hotel check-in counter and access their rooms, as well as any other area of the hotel that requires a key, directly via their smartphone.
By early this year, HHonors members will be able to use their smartphones as their room key to enter more than 170,000 rooms at 250 U.S. properties within the Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and Canopy by Hilton brands.
Berger’s passion for hospitality is most likely what has sustained him over his lengthy career. The pointers he has for up-and-comers in the industry is the same advice he lives by. “Always be curious,” he said, “and never stop.”