Mark Hoplamazian, president and CEO, Hyatt Hotels Corp.
Hyatt leader wowed Pritzkers early, then fell for hospitality
Under Mark Hoplamazian's leadership, Chicago-based Hyatt Hotels Corp. is moving from its luxury roots to more diverse hotel offerings. (Alex Garcia/Chicago Tribune / February 20, 2013)
"He came in and nobody could spell or pronounce 'Hoplamazian,' so I named him 'Steinberg,' " said Tom Pritzker, who has succeeded his late father as head of The Pritzker Organization, the financial and investment adviser to family businesses.
His intent was to engage in a bit of humor. Hoplamazian responded by drafting a letter explaining the history of the Armenian people, who have endured centuries of persecution, and the origins of his name, which dates to his great-great-grandfather and means "someone who is quite serious."
He ended the missive on a playful note, he recalls, writing something like: "If you haven't been convinced by this, and 'Steinberg' is the ultimate decision, then I'm going to need an invitation to (your Passover) Seder."
His diplomacy wowed the Pritzkers.
"He articulated it in a really warm, kind and at the same time effective manner," Tom Pritzker said. "I will never forget it."
Hoplamazian's savoir-faire, combined with keen business acumen, has served him well working within Pritzker-owned businesses ever since. He has guided lucrative deals and later helped unwind investments during the tumultuous period when the family fortune was broken up. Since 2006, he has served as president and chief executive of Hyatt Hotels Corp. That company, the family's crown jewel, went public in 2009 but is still majority-owned by family interests.
Hoplamazian, 48, the son of a self-made landscape designer and contractor, is widely viewed as calling the shots at Hyatt on a day-to-day basis.
Under his leadership, the company is breaking out of a conservative mold that left it vastly outpaced by expanding rival chains. It is moving rapidly from its stylized, luxury roots into a more diverse array of hotel offerings, including limited-service and extended-stay, and from its domestic foothold into a broader spectrum of key foreign locations.
Here and abroad, the company is opening properties in gateway cities served by major airline hubs, putting emphasis on such locales as the robust and New York City market, as well as Mexico City, and key cities in China and India.
But clearly, Hoplamazian must stay in sync with Tom Pritzker, who is executive chairman of the Chicago-based hospitality company and scion of the billionaire Pritzker family. By all accounts, the relationship is a close one and the conversation free-flowing, with Hoplamazian using Pritzker as a sounding board. Pritzker describes Hoplamazian as "my partner and my friend."
"We'll talk, I'll give him feedback," Pritzker said. "I'll say, 'Mark, you might want to think about doing such and such.' Sometimes he'll say, 'That's a lousy idea,' and sometimes he'll say, 'Oh, that's a good idea.'"
The relationship "is sometimes quite spirited, but there's a lot of respect," said Bill Mayer, managing partner of Park Avenue Equity Partners, who has advised the Pritzkers through the years. "There's a comfort level ... there's not a sense of 'got ya.' It's not that. They are trying to reach a common objective."
Too close for comfort?
Hyatt's annual meeting last month was a low-key, sparsely attended affair -- pretty much a two-man show in the Grand Hyatt New York's Empire Ballroom, with its oval chandeliers of hand-blown art glass. Pritzker offered a quick overview of the business, and Hoplamazian, sitting to his right, recognized some longtime employees for their contributions.
"We would not be able to do what we do here without your commitment," Hoplamazian told the veteran employees, who received a standing ovation. The company employs 90,000 people in 45 countries.
Some observers argue that the alignment between Hoplamazian and the Pritzkers is too close, leaving public investors outside the loop. Appearances at investor conferences are infrequent, they say, and the company does not provide guidance on future earnings, leaving investors more vulnerable to unexpected news when results are reported. A first-quarter earnings surprise, for instance, sent share prices downward this spring.
Hyatt shares, which traded at $28 when the company first went public, closed at $36.80 Friday. The stock's high point was February 2011, around $49, and it was in the $43 range prior to its first-quarter earnings report in early May.
Hoplamazian "has done a good job of deploying the company's balance sheet to secure brand presence in strategic markets ... but the company has done a poor job of being transparent for public investors," said David Loeb, a senior analyst at Robert W. Baird & Co., which expects to do business with Hyatt in the next three months.