The Long View: Chris Nassetta, President and CEO of Hilton

“The Angle” Music

Cold OPEN “AI affords extraordinary opportunities to make the digital experiences much, much better, much more customization choice. I think it will revolutionize the way people interact with us digitally.”

Eric Veiel

Welcome back to “The Angle from T. Rowe Price,” a podcast for curious investors. Just a reminder that outside of the U.S. and Australia, this podcast is for investment professionals only. For this episode of The Long View, I sat down with Chris Nassetta, President and CEO of Hilton. Chris has led Hilton for nearly two decades, navigating the global financial crisis, Covid, and the entrance of new competitors. We discussed his leadership journey, Hilton's evolution as a brand-led global business, the importance of culture, and how one of the world's most recognized travel brands continues to evolve.

So, thanks for, thanks for joining us on The Angle Chris. Really good to have you.

Chris Nassetta

Thanks for having me.

Eric Veiel

So, let's start kind of at the beginning. You grew up here in Northern Virginia. And one of the things that I've always.

Chris Nassetta

I did. I grew up like, nobody can see us, but five miles from where we're sitting is where I grew up. And I live about, believe it or not, I live about a mile from where I grew up.

Eric Veiel

So you haven't made it very far.

Chris Nassetta

Mother's 93 years old, still lives in the house I grew up in, and yeah, so I did, you know, it's an interesting journey for me. I did live in Beverly Hills for a few years. When I took this job almost 20 years ago, I had to move my family out there. And then, of course, we moved the business back. And in the hotel business, you know, it's almost like a military life. Typically, you know, people move around the world like most of our senior people are moving all around the world. You know, every two, three, four years. My existence in the roles I've had is sort of the opposite. I have been, other than my time at Beverly Hills, I have been in and around D.C. as my home base. But I travel 80% of the time, so like a lot of my teams, they move every few years, but then they're relatively static where they are until they move again. Where my life is like weekend warrior, you know, I'm home, you know, I try and make it home on a Friday night to Sunday morning. I'm off to China first thing, you know, first thing Sunday as an example this coming Sunday. And so, I'm gone, you know, 75, 80% of the time. But yes, this is, this is my home base. Born and raised. Born in Georgetown Hospital nearby.

Eric Veiel

Excellent. So one of the things that I love is that I think you are 16. You got your first job on Capitol Hill, but it wasn't like clerking for some powerful senator. You were in the engineering department. Preverbally, the engineering department of a Holiday Inn. I think that, means, like, plunging toilets and changing light bulbs.

Chris Nassetta

Yeah, it was. Yeah, well, and other things, it was fourth and C Street and I, you know, my parents were, were fabulous. My mom's still alive. My dad passed away. Fabulous parents. And like, if you wanted to have spending money and go to the movies and do all that kind of stuff, you had to have jobs and like, you had to, you had to make a living, so to speak, even as a kid. And so as a kid, I was super entrepreneurial, more than anybody wants to know. But I, you know, I had a lot of different businesses, you know, when I was singled upper, single digits, and then into my early teen years of like lawn mowing business, paper route business, painting businesses, snow plowing. You know, I was very, you know, in part because I'm fairly entrepreneurial by nature, but in part out of necessity.

Eric Veiel

So, when you graduated from UVA, you got into real estate development. So not directly into the hotel business, but into real estate development. What drew you to that business?

Chris Nassetta

Well, it's interesting, I went to McIntire School of Commerce at UVA Undergraduate Business School, graduated a long time ago, and when I got out, like everybody, I was like trying to figure out what I wanted to do with my life. And at that time, you know, what was most popular was like investment banking. That was like the, I don't know what, the equivalent of like, AI today, you know, the internet or, you know, sharing economy, pick, private equity. You know, we go through these phases sometimes you have multiple industries that are sort of in favor.

At that time, when I was coming out of business school, it was really investment banking and all the training programs, and I did all the interviewing for that. But my family, you know, back to that, you know, was in the real estate development business and I didn't ever work there directly, but I worked with my father and uncle in summers, other summers, where I was like running numbers and doing things, you know, back when we didn't have computers and literally like graph paper and a pencil and eraser, you know. And as I was interviewing for all the investment banking jobs and those, you know, some of the great investment banks, I had some opportunities and great training programs. I realized I really, you know, while I knew that would be good for me, that, you know, I was more interested in being in and around real estate, real estate finance and the like. And I wanted to, like, get to work. I mean, like, I'm a really sort of pragmatic, you know, hardworking and like, I want to go out and do stuff.

So, I started looking, looking around and found an opportunity with Oliver Carr, which was the biggest regional developer. You know Oliver Carr, who's still alive. By the way, I went last summer, last summer to his 100th birthday. An amazing person; built an amazing business, and I thought they were doing some really interesting things in terms of; he was very focused on city planning. He was very early in the days of the suburban expansion. And I just was swept away by all of that. And so, I got lucky and I got, you know, I got offered an opportunity.

You know, in those days, you know, I was, you know, fairly financially sophisticated, you know, enough. So to be a financial analyst, computers were just. Just a new thing. Like we were just, you know, people were starting to use computers. And the real estate development business, I would say, was not that financially sophisticated as it is today, back then. So, I found a really cool niche. I realized that I had a unique skill set that didn't really exist at that time, but broadly, which was, you know, being a financial analyst and sort of, you know, and what I ended up doing, was creating like a hub of people. And I recruited others. It wasn't a huge group, but a small group of others and a couple of others out of McIntire. And so we became like, you know, we were the first ones that understood computers and like built the computer room and like, we were like a hub of all financial analysis for a group of real estate development people whose background, who are incredibly talented, but whose background was much more construction management, architecture, engineering. And so, it was sort of the merger of those skills, which are obviously very necessary and, frankly, critical to good real estate development. But then taking the financial analysis elements of it and connecting the dots. And so, you think about like the early parts of your career, what is it really about? I tell my kids this. I tell our young people this. I mean, yeah, you got to make enough money to survive and pay rent and feed yourself, but it's really about learning.

Eric Veiel

So, let's, let's, get to Hilton today. So, or to Hilton when you joined, so you know, you come in, it’s 2007. They've just done the biggest LBO at the time. We're right on the verge of the global financial crisis. We know.

Chris Nassetta

We didn't know that at the time.

Eric Veiel

We didn't know it.

Chris Nassetta

We didn’t know that. This is, July 4th, 2007. So, if you were to take yourself in a time capsule back, I think you would have. I mean, I think a lot of people, including me, thought, yeah, maybe we're getting long in the tooth on the business cycle, but nobody in July of 2007 thought the world was going to blow up the way it did. And I saw what was a really extraordinary opportunity. If you think about Hilton at that time it had. Hilton had just bought back Hilton International. They had fairly recently spun out the gaming business. They had bought Promise that had a bunch of the like, Hampton Inn and Homewood and Embassy Suites, and some of the some of the limited service and other brands. But the big thing that was sort of missing, you know, for them, was, you know, getting back the international business.

So they did it. They bought a HI, Hilton International, back. But it was within months that then they decided, you know, they were going to sell the business. But the company, I mean, Hilton is an amazing company. We invented the, the, hotel business as you know it today. Okay. And I won't go through all the things we invented. But most of what is standard today, we, we, invented.

So, it's an amazingly iconic company. But the reality is because of, in part, the bifurcation of the business between U.S. and international, that a lot of other things we had really become, you know, I think complacent and a laggard. So, you know, our culture, which had been extraordinary and led the industry, was sort of not what it needed to be. You know, if you looked at, you know, our brands were good, but we, you know, we had we had eight brands and there were so many segments, you know, that we didn't cover. We had to expand our brand portfolio. We went from eight, we have  28 brands today. You know, and, and, growing. We had to get honors to really work. We just eclipsed 250 million members. Will be 500 million members if all goes well in the next in the next five years.

Eric Veiel

So, let’s level set on the business right now, because I think it's really interesting. It's truly an asset-light business, right. You guys are.

Chris Nassetta

It wasn't always.

Eric Veiel

It wasn't always but.

Chris Nassetta

Now that’s a story we could do a whole podcast on of how we got from A to B.

Eric Veiel

So, the way I think about it, and you tell me if this is wrong, but you really have two sets of customers, right? You have your, what I would say are your actual Hilton Honors members, your people who are coming into the hotels branded as Hilton, and all the other 27 brands. And then you have the owners, the franchisees who are building, operating day-to-day running these things. So how do you, first of all, explain the power of that flywheel that you have with those Hilton Honors members and the value that they bring? And then I want to get into how you serve two distinct sets of customers.

Chris Nassetta

They are inexorably linked to one another. So, the way the flywheel works is, we develop great brands that really resonate with customers. We have a commercial platform meaning sales, marketing, digital, all those things that that really works well. And when they're building us more hotels, we're, we're, building the most important thing we have and that we continue to build, which is network effect. So, the more that we can serve any customer for any need they have anywhere in the world, they want to be with good products, good service, great technology and loyalty that ties it together and resonates with them. The higher share of wallet we get from every individual customer because we can.

So, you know, like if you don't have all these dots on the map, in our case, almost 10,000 dots on the map and 146 countries, even if people like you and they say like, oh, I love him, you know, it's, you know. I got a hotel in New York, but I'm going to, you know, a soccer tournament for my, my daughter in Reading, Pennsylvania. Well, if you only have really nice stuff in an urban market, and you don't have the Hampton Inn or the Homewood or the Home2 or the True in Reading, Pennsylvania. Guess what? They're not staying with you. And so, by definition, you're, you're, sort of, you know, you’re letting them out of the network.

And so, all of that flywheel is about continuing to strengthen the network effect and make it more and more powerful. But the way it coexists, and it coexists quite well, which is we have to do with our ownership community. Because remember, the majority of our system is franchise. So, they're operating the majority of the system around the world. More here in the U.S. is franchising, but it's growing everywhere in the world. They, and we, have to provide a great experience for the customer. And if we do that, we will drive higher rate occupancy, which allows you to drive greater profitability to the bottom line. The more profits they get at the bottom line, the more you know, happy they are with how we're performing together and the more they want to reinvest in the business.

So, there are times, you know, these video owners where like, you know, we have a very you know, some owners have very long views, some of them have intermediate. You know, everybody has different time horizons, you know, as brand, as, as, a consumer branded company our time horizon. I mean, we have to mind all time horizons like because we got to deliver for owners, but our ultimate time horizon is forever. Like, you know, the Hampton brand or whatever, we’re always thinking very long term on everybody's behalf. Not just ours, but there's, we have to protect the sanctity of these brands. And it stands to reason, if they're making more money, they're investing more in our flywheel flies faster.

Eric Veiel

So, it's interesting, I think a couple of stats that really stood out to me, and correct me if I'm wrong on these, but I think I saw that two out of three people in a Hilton hotel, at any point in time, are honors members. So, like that loyalty is.

Chris Nassetta

Yeah, that’s right. A little bit higher than that technically, but close. That's pretty close. And by the way, I think that's great. It leads the industry, but I think it'd be better. So, like everything I wake up every day, I can thank my 93-year-old mother for, who's wonderful, for keeping me on task, thinking about, you know, not what we did yesterday and the success. And I'm proud of everything that we've done. But thinking about tomorrow. I mean, my kids, we were on vacation last week and they were kidding me about like. God, Dad, you're always, just like, tomorrow, the next thing. And I said, I can't help it, but it's sort of I'm wired. So, I'm thinking, like with honors being 67 to 70%, like, what's the efficient frontier, and I think it's higher. I think it's, you know, I think it's closer to 75%. And so, we have a plan and we're, we're, you know, like and when we get to that, I guess I'll have to figure out whether there's a new efficient frontier. But there are limits only in the sense of types of business that, you know, group business, types of business where it's not going to qualify.

Eric Veiel

The other thing I don't think people would fully appreciate is that, you know, your pipeline is, is, large, 500,000 plus rooms and.

Chris Nassetta

540, but who’s counting.

Eric Veiel

And, and, I think that adds up to over $70 billion worth of investment, of which I think Hilton's on, you know, the record of saying something like, we'll do 575 or 580 million of that, the other 70 billion.

Chris Nassetta

We spend a couple hundred million. We spent $150 to $200 million a year, something like that. So, it's a yeah, of that 70 billion it's a teeny tiny percentage. And so, listen, that is that is one of the really wonderful things about this model; is it is capital light. What we bought was a very different business, and in fact what we public with  was a very different business, where we owned a lot of real estate. By number of assets, not a large percentage, but we own some of the old big convention, you know, Urban Hilton. So we owned a very large amount of real estate, and we owned a very large timeshare business. And so what we did, we went public in 13 and 16, against all odds. We were able to do a three-way split and convert the real estate company into a REIT, which was a miracle, by the way, because they changed the laws. You could never do it again. They changed the laws before we did it, but we got grandfathered in, which was a miracle.

So, as we sit here today, we're a consumer brand of business with these great brands. You know we got to deliver for our owners. But, we you know, but we are you know, we are very much a capital-light business and that, you know, we have the ability to keep growing if we do our job. If we drive high premiums in terms of performance, which drives owners the flywheel to invest more, you know, you know. And obviously starting with customers liking everything we're doing, we can continue to grow without the use of much of any capital. Now, not everybody can do it. And in the sense that not all businesses are set up to be able to grow without, without, the capital. At the moment, we are, and if we do our job, it's sustainable, I think, and thus I think we have a really good business model with quite a deep moat around it.

Eric Veiel

So, I want to hit on two more topics here before we run out of time. And then we're.

Chris Nassetta

We’re out of time already.

Eric Veiel

Well, we're getting there.

Chris Nassetta

I am loquacious.

Eric Veiel

You are loquacious Chris.

Chris Nassetta

As I have been accused.

Eric Veiel

We're going to end, we, we, end all these sessions with a rapid fire. So, I'm going to hold you to that.

Chris Nassetta

I'm good, I'm good. You be surprised.

Eric Veiel

But we're going to test you.

Chris Nassetta

You bet me like a buck. You know I'm very competitive and I'll be.

Eric Veiel

So, I'm going to bet you a buck on two topics that we're going to try to do in five minutes. And then we're going to get to the. Perfect. It's down there. I love you still have cash. Then we're going to try to get to the rapid-fire questions. But one is just the proliferation of brands in this business fascinates me. Right. So you have 28 brands as you mentioned.

Chris Nassetta

And we’re light.

Eric Veiel

I can't keep track of them all. Why do you need so many brands?

Chris Nassetta

Well, the reality is, I'm not going to, I'm not going to accuse you of not being sophisticated, Eric. But the reality is are the reason we have, by the way, we have fewer than our core competitors. Our core competitors have like 38, 42, 45. We have that many brands because our customers, I guess not you, but many of our other customers have told us that's what they want. So we do. Listen, when I got here we had, we had eight. I said we had 28. All but two of those, and those were very recent where we bought two brands, I mean, relatively small because they were super unique opportunities.

All the rest of them, we did organically and we did it the old fashioned way, meaning it was driven, you know, sort of out of the earth by the needs and desires of our customers and our owners. And it's always that combination, as you pointed out, it's a symbiotic relationship. Like we're, they're, both equally important stakeholders. Our owners, many of them, are operating these hotels. They're very close to the customers. What the customers needs and wants are. And they were constantly doing research. I mean, I'm doing focus groups galore. I've got a bunch coming up in a few weeks and listening to customers, our customers, other customers, you know, other brands, customers at different segments, different, different age groups, everything under the sun and, and all of these brands that we've developed have come out of that, out of those discussions.

I know some people think like, oh my god. And, you know, the hotel, they just keep putting it out there so they can like keep driving unit growth. Nothing's further from the truth. I mean, it does help unit growth. But you know, you know, name a brand. We just, we just, the most recent launch is Undergraduate. I'll give you a good example. So you'd say like, oh my god, that's 28. Did you really need to do it Chris? And I'd say, yeah, let me tell you why. I bought Undergraduate’s. One of the two we bought. Love the brand, by the way. My guess is anybody listening has stayed it, would say love it. College towns, full-service hotel. Fabulous in big college towns. Okay, we have 36 or something. We probably have about, you know, that many more in the pipeline. You know I think it could be 2 or 3 or whatever, 2 or 300 hotels over a long period of time, good growth.

But what we found like here's an example I gave. I had one daughter that went to Bucknell. Right. It's in a, Lewisburg, Pennsylvania. Great little town. The biggest thing going on in Lewisburg, besides Bucknell, is the state penitentiary. You know, they're not a lot of, you know, not a lot of hotels. There are no full-service hotels. There's a great Hampton I stay at, and it's fabulous. The team there, if they’re listening, you guys were great. But the reality I realized, like when we were doing graduate, like, why doesn't Lewisburg have one of these? And then you think, well, okay, there's like, there's a need for something a little bit more interesting in those towns. I think it would perform well. I think customers will want it. I mean, we did the work to make sure I was right, we didn’t like just wing it. But the reality is, if you took graduate to those towns, you would screw up that brand, meaning you would have to build a limited-service hotel. So, somebody would go to a graduate at Michigan and get this wow, or UVA or, you know, Penn State. And then they go to Lewisburg and say, like what you like.

So, we created Undergraduate because it needed to be in its own swim lane, like, and when we went and did the research. And by the way, there's 500 or 700 of these little college towns, you know, scattered about the U.S., plus, you know, lots more overseas. And that meant that we could keep the integrity of the core graduate brand and do another brand that would be unique and different and serve a customer purpose and give our owners another opportunity to build something that we think would really perform well. So, we then go do all the research and focus groups, you know, quantitative, qualitative data. I mean, we do all the work. And, by the way, there are plenty of times where owners have come to me, or I've had an idea, where somebody in the team has had an idea, and we do all the work and say, nah, you know, like a good, you know, reasonable to do the work, but, but it doesn't, it doesn't.

So, there's a swim lane. The end point there, there is actually I know, it looks like 28. And how do you keep track? There is a swim lane and it isn't. You know, it's the ethos of the brand. It's the serving a state occasion and or product type or, and or price point. And so if you name a brand, I can, you know, we don't have to. It's like children, you know I love them all. There's a, there's a, reason for all of them. And here's the best testament I can give you to the fact that it works. Any of our brands and that are mature enough. Meaning you've got, call it 100 units or more, is way outperforming the market. Meaning. And they have not cannibalized their brethren.

Eric Veiel

Have you ever had to shut a brand down?

Chris Nassetta

No, no, not yet. I hope to never get there. But that's a bad day. But no. So, we, I think, the truth is we do enough work where I don't think that'll ever happen.

Eric Veiel

All right. So last one before we jump into the rapid fire. The one way that AI is going to meaningfully change the business in five years.

Chris Nassetta

Customer experience. Lots of other ways. Customer experience. You think about the customer journey, it starts when you start thinking about taking a trip, either dreaming about a vacation and doing exploration, or you getting, you know, figuring out a business trip. It transitions to like planning it, booking it, pre-arrival. Then you're with us. I'll come back to that. And then when you're gone again, it's like post-day feedback and like, what do we get, right? What do we get wrong?

So you think about that journey. The most important part of it is when people are with us. But there's a whole bunch of opportunities where people are engaging with us digitally when they're not with us. AI affords extraordinary opportunities to make the digital experiences much, much better, much more customization choice. We have so much information we can serve you up, micro servings, based on everything we know about you. Everything else you've done with us, everything else you've looked at and booked. So, I think it it already is. But early days, I think it will revolutionize the way people interact with us digitally and then on, on stay as well.

Because think about with the use of AI, with all the data that we have and now the ability to actually use it in, really productive ways, we can customize the experience infinite, I mean, in an unlimited way, because you're communicating with us, we're scraping social. In the moment, we can customize the offer or the experience in any way you want, fully integrated into our systems.

And the last thing, because we could go on forever on AI. Problem resolution. In the old days of problem resolution, it's like people will go down  and scream, or, or, they or they just wouldn't come back where they'd go at the end of the day and say, it was terrible. And somebody say, I'll give you a bazillion honors points or whatever. Now we have the means through messaging, through scraping social, and fully integrated into our systems to deal with whatever your issues are in the moment, while you're with us, and fix it. And so, I think the broader customer journey will be revolutionized.

Eric Veiel

All right, Chris, here comes the biggest challenge of your podcast interview session ever. Rapid fire. Legitimately rapid fire. I'm going to give you a question and you have 1 to 10 words.

Chris Nassetta

I'm going to do one word.

Eric Veiel

Okay. Perfect. All right. Describe Hilton today?

Chris Nassetta

Opportunity.

Eric Veiel

Best thing about being the CEO of Hilton?

Chris Nassetta

Our people.

Eric Veiel

What's one thing you always notice when you walk into a hotel?

Chris Nassetta

The smiles on people's faces.

Eric Veiel

What's your most used travel hack?

Chris Nassetta

My charger. A very special charger.

Eric Veiel

I’ll have to find out about that later. Okay. What's a city you visited many times but never get tired of?

Chris Nassetta

Oh my, I love every city. I love the world. Everywhere I go.

Eric Veiel

Then this, is, how you're going to answer this one too. What's the most memorable hotel you've ever stayed in?

Chris Nassetta

I don't have a favorite hotel. I love all my children. The last one I was in, what was the last hotel I was in? Resorts World Las Vegas was the last one. But I find something to love in every hotel we have, mostly related to the people.

Eric Veiel

If you weren't in hospitality, what career would you have pursued?

Chris Nassetta

Oh, probably. Probably the one I was pursuing. Real estate and finance.

Eric Veiel

What's the most underrated trait of a great leader?

Chris Nassetta

Humility.

Eric Veiel

One word to describe the environment you're operating in right now.

Chris Nassetta

Dynamic.

Eric Veiel

Excellent. You did it. I owe you a buck. Thank you so much. I want to see your charger.

Again, I'm Eric Veiel. Thank you for listening to The Angle. We look forward to your company on future episodes. You can find more information about this and other topics on our website. Please rate and subscribe wherever you get your podcasts. The Angle. Better questions, better insights. Only from T. Rowe Price.

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This podcast episode was recorded in July of 2026 and is for general information and educational purposes only. Outside of the United States and Australia it is for investment professional use only. It is not intended to be used by persons in jurisdictions which prohibit or restrict distribution of the material herein.

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