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Michael Hirst

Thirty years in the hotel business, and Michael Hirst still worries about getting a good night’s sleep. Not for himself, …

Thirty years in the hotel business, and Michael Hirst still worries about getting a good night’s sleep. Not for himself, but for the thousands of guests who check into Hilton International hotels around the world each day. And the chairman and chief executive of the 163-property chain is a demanding customer. “The heart of the hotel has to be service,” he says. “Good service.”  Hirst once even grabbed a video camera and filmed guests of the Kensington Hilton in London from the time they were greeted by the doorman until they were shown their rooms, all in the name of quality. And not incidentally, to have a little fun.

“Hotels to me are a mixture of retail and theater,” explains the affable, 50-year-old chief executive, who early in his career managed the well-known Talk of the Town theater and restaurant in London, and later directed entertainment centers and theme parks for hotel chain Trusthouse Forte. “Every hotelier should be a showman, and everything we do should have a stage.”

With 54,000 Hilton International hotel rooms in 48 countries, plus two cruise ships in Egypt, Hirst has quite an audience. And like any performer, he wants more. Bucking the slowdown in global tourism and the crippling recession in Europe, Hilton International has been expanding in profits and capacity. While the hotel business has been struggling with lower occupancy rates and tighter margins, Hilton profits increased fivefold between 1987 and 1992-to $300 million from $60 million.

“We work very hard on our margins,” Hirst says. “We’ve become lean and mean.” And for a guest, he adds, “a leaner hotel is a more efficient hotel.” Eleven hotels are now under development, and by the end of the decade Hirst expects to have 200 hotels in his stable, none of them franchises. Except for a few notable exceptions-including The Drake in Chicago, the Kahala Hilton in Honolulu, and the Vista Hotel at New York‘s World Trade Center, which has been closed since last year’s bombing-none is the Hilton most Americans know. Hilton International was spun off from publicly traded Hilton Hotels Corp. in 1964 and has since had rights to the Hilton name only outside the U.S.

Reflecting the increasing importance of leisure travel to the industry, the company is changing its logo to Hilton International Hotels & Resorts. The new organization is geared to the new corporate traveler, who may combine a business trip to Jakarta with a family vacation at a resort on Bali. Hilton International wants to book this coveted guest in both places.

That’s becoming ever harder to do. Layoffs, skimpier budgets, and teleconferencing all have combined to thin the ranks of business travelers. As technology becomes more ingrained in the workplace, such travel is likely to become even more occasional. Picking up the slack is leisure travel-the fastest-growing segment of the industry. Vacationers, however, usually don’t spend as much money as business travelers, and remote resorts are more expensive to run. Hirst says that given a choice, he would manage a city hotel and its corporate clientele every time. But the trends are not so forgiving; customers want business centers, health clubs, and MTV all under one roof. Sometimes they don’t even want a roof: Among Hilton International’s properties is a tent camp on a privately owned game sanctuary in Kenya.

A turning point for Hilton came in 1987, when parent Ladbroke Group PLC-the London-based conglomerate better known for gambling and oddsmaking bought it for $1 billion from Allegis Corp. Ladbroke took a gamble; at the time Hilton International needed some major housekeeping. As Hirst recalls, “It was being undermanaged-a sleeping giant that just needed a bit of waking up.”

Since becoming chairman and CEO in 1990, Hirst has moved to flatten the company’s hierarchy and has cut costs across the board. He put a quick end to the previous owner’s practice of letting the hotels run almost as fiefdoms. Hirst -centralized operations and established uniform standards. “We came along and provided commonsense global management philosophy,” he says. In those early days, however, consolidation converts were not easy to come by. Admits Hirst, “It was really grabbing the whole thing by the shirttails and dragging it along.”

Rolling together a chain of hotels, as Hirst has done, risks smothering an essential creative spark, because each property has distinct characteristics. Thus, while he still insists that the home office keep close tabs on Hilton’s far-flung operations, Hirst recognizes individual operations require freedom to respond to the needs of their markets, and he’s gradually increasing slack on the wire.

Success, of course, makes that easier to do. Perhaps his days as an amateur cameraman are over? “Maybe,” Hirst muses, “now is the time to relinquish some of that iron-fisted control.”

About jonathan burton