Arlington native Chris Nassetta checked his phone as he got off his boat after a 2007 Fourth of July outing with his daughters on the Chesapeake Bay. As he read the email—a private equity firm had purchased a hotel chain—he had a feeling the news was going to affect not just his job, but his life.
Turned out, he was right. Nassetta and his family—six daughters and his wife—would find themselves moving from Northern Virginia to the fabled luxury confines of Bel Air, home of Beyoncé, Jay Z, Elon Musk, Jennifer Aniston and other celebrities.
And then, just two years later, back again. But this time he’d have more than his six daughters in tow. He would be bringing Hilton with him.
In the early part of the 21st century, after nearly 100 years in business, the management of Beverly Hills-based hospitality giant Hilton Hotels Corporation was slumbering on plush mattresses, with the blackout curtains drawn, its corporate structure content to while away the days in ossifying silos.
The company that pioneered the rewards point system, in-room air conditioning and direct-dial telephones was doing little to innovate, and losing business while doing so.
Meanwhile, travelers, particularly the new breed of efficiency-minded millennial wanderers, regarded the brand the way they looked at Granddad’s Cadillac: Aspirational luxury, but, meh, needlessly expensive and oh look, over here’s a designed-to-death boutique hotel with free Wi-Fi.
The hotel chain founded by Conrad Hilton in Cisco, Texas, in 1919, was in a dangerous financial spiral that had an unintended upside: The moribund spreadsheets made it a deliciously ripe target for a private equity takeover, in an industry that didn’t ordinarily draw much attention from private equity investors. The accountants at Wall Street’s Blackstone Group saw undeveloped potential, despite guests flocking to competitors.
On July 3, 2007, Blackstone cut what was then the biggest private equity check ever—$6.5 billion—toward the $26 billion purchase of the Hilton holdings—3,700 hotels, 600,000 rooms and debt, lots and lots of debt.
Nassetta, a trim and tanned 56-year-old, grew up with two brothers sharing a bedroom in a North Arlington center-hall colonial; he’s a graduate of Yorktown High School and University of Virginia, and in 2007, at the time of the Hilton sale, was the chief executive officer of Host Hotels & Resorts. It was he who turned the Bethesda-based real estate investment trust into a Fortune 500 and Standard & Poor’s 500 property, which did not go unnoticed by Blackstone.
Nassetta’s intuition that Fourth of July day proved accurate when Blackstone asked him to take over Hilton as president and CEO. Jonathan Gray, now president and COO of Blackstone, wooed Nassetta by telling him he had “been training your whole life for this position,” Nassetta says.
Which seemed to be true. Fresh out of UVA’s McIntire School of Commerce in 1984, the computer-literate 20-something “made a pitch to [real estate developer] Oliver Carr that I was on the cutting-edge of financial analysis and can do it faster and better because of these new tools called ‘computers’ and you should hire me and I can organize [the business] for you.” Not only did he get the job, but “I accelerated very rapidly,” he says. He wound up as chief development officer and helped right the Carr ship during the savings and loan crisis of the late ’80s.
The Carr firm would be sold to Blackstone for $5.6 billion in 2006, but long before then, Nassetta and partner Terry Golden took the plunge and started their own private equity firm, Bailey Capital Corporation, in 1991. It was the same year, in May, he married his high school prom date, Paige, daughter of former Arkansas congressman Ed Bethune. A few years later, Nassetta, looking for another professional challenge, joined Host in 1995.
“Every experience I’ve had is extraordinary,” he says, seated in his 11th-story corner Park Place II office high above Tysons. “The learning experience I had at Carr, I couldn’t replace. Starting your own successful business at an early age was completely different. Then going to a public company [Host] and rebuilding it, that was extraordinary.”
Training for the Hilton job, it would seem, was complete. Nassetta would be Hilton’s fourth CEO in its history.
There was just one problem, and that was Hilton.
To fix Hilton, to restore the storied company to its glory, would require hands-on management, and Nassetta, it was decided, would have to move to Beverly Hills.
“I wasn’t interested in moving six girls—one of them going into preschool and one of them starting high school—and I had a really good gig going with Host Hotels. I had a lot of pride in what we accomplished,” Nassetta says. “I wasn’t looking to do anything different professionally.”
With the deal on the table, it was his wife Paige, Nassetta says, who made the final decision. “She’s an equal partner,” he says. “If she had said thumbs down, then we weren’t doing it.”
It was Paige who surmised Nassetta would be happier with a larger, newer challenge. “She said, ‘You’re always looking for intellectual stimulation, something else to fix,’” he says. “She was instrumental in helping me realize I love to take things that don’t work and try to make them work.”
But moving six daughters to Hollywood?
“If it was going to be really detrimental to the family, we wouldn’t have done it,” he says. “I was born and raised here, my parents still live in the house I grew up in a mile away, my two sisters are neighbors. We had this super-comfortable cocoon.”
In the end, it was Paige who said to load up the truck and move to Beverly. Hills that is … (It was Paige who joked about them being the “Beverly Hillbillies.”) And it was Bailey, then 14 and the oldest daughter, who eventually rallied the reluctant others.
“And you know what?” Nassetta says, brightening at the thought. “It ended up being the most spectacular experience for our family you can imagine. Getting out of the cocoon, all the support we’d built for a lifetime—poof, it was gone. The entire ecosystem, gone.”
For the first time, the Nassetta clan had to depend solely on each other for support. “The kids got stronger,” he says. “We, as a family unit, became incredibly tight because we needed each other.”
While Paige and the kids settled into their new lives, Nassetta was intensely focused on saving Blackstone’s massive and controversial acquisition of Hilton.
“They invented the business as you know it,” Nassetta says. “And they had been king of the hill. But you become complacent … The company was not performing the way it could in part because what had once been a very dynamic, entrepreneurial culture had lost its way. It was not my intention to move the company, but to rebuild it.”
To his horror, Nassetta discovered Hilton operating like “eight or nine companies all over the world running themselves. What we found was that the culture was a wreck … The culture had lost its way.”
Part of the problem, it was determined, was the location of the headquarters. Relocating and consolidating redundancies might wake up the slumbering giant. But Hilton couldn’t do a headline-generating search for a new home the way Amazon tantalized municipalities in its search for HQ2, half of which ended up in Arlington.
“You have to understand the sensitivity,” he says. “We had to run the company.” A six-month national search by management consultants settled on metropolitan locations that scored high on a complex matrix of pluses and minuses. The last ones standing were Chicago, Dallas, Atlanta and Northern Virginia.
The joke was the CEO and president of the company was homesick and saw a chance to get back to his hometown. “No, no, that’s not the case,” Nassetta says. “I didn’t put my thumb on the scale.”
It had been two years since the Nassettas had moved. And now they were moving back. Or were they?
When he broke the news to Paige before the Los Angeles press announced the relocation of a flagship corporation, Nassetta was taken aback.
“She had this solemn look,” he recalls. “She said, ‘I don’t know how to tell you this, but we can’t do this.’ I’m thinking, I’m the hero, we’re going home to friends and family, and my wife says we have to stay. I didn’t see that coming.”
Bailey was now going on 17 and learning to drive (on Sunset Boulevard, a “harrowing experience,” her dad says), going to high school with celebrity offspring and swimming competitively. She did not take the news well. Bailey rallying the troops this time would be off the table.
Bicoastal commuting was a non-starter for Nassetta (“No way. We’re a family. We work as a family.”). It didn’t look good as Nassetta left for a weeklong business trip as the news hit the papers and the airwaves that Hilton was moving to Tysons.
But by the time he returned, Paige had had a change of heart. “We came here together, we’re going home together,” Nassetta recalls her saying.
Moving back was harder than moving out, he says. “You have an expectation you are going to pop right back into the ecosystem”—the cocoon—“but you find out the whole system is different. In two years of a kids’ life, everything had changed.”
That was 10 years ago. Bailey is now 26, Mason is 24, Kirby is 22, Sydney is 20, Peyton is 18 and Avery is 15. (Is it any wonder the name of his boat is Another Girl?)
In Northern Virginia, the Nassettas are active in a number of local nonprofits, including the Arlington Free Clinic, which provides health services to some 1,600 low-income, uninsured residents.
“His mother may have been here the first night it opened,” says Nancy White, president of the 25-year-old clinic. “She still comes each week and gives us the gift of her time … His family has always been here for us.”
One of Nassetta’s sisters provides the clinic with photography services, according to White. And Nassetta, White says, has Hilton donate a five-day vacation to anywhere in the world they have a hotel as a raffle prize, “which is an important way for us to generate funds.” He also hosts benefit parties at his home, and is generous with his time and expertise.
“I can pick up the phone and ask for advice and he’ll connect me to someone who can help in support of our mission,” White says.
Nassetta also works with Wolf Trap National Park for the Performing Arts and the John F. Kennedy Center for the Performing Arts, among other organizations.
As for Hilton Worldwide Holdings, the move to Tysons seems to have been a masterstroke.
“We’re outperforming everybody in the industry,” he says. “We’re opening more than a hotel a day somewhere in the world. We have the largest share of the business, we’re growing faster, innovating more and the fun thing about it is, we’re celebrating 100 years of history, and most companies don’t get to celebrate that. We get to celebrate it, literally, at the top of our game.”
A private company that just a dozen years ago was suffering from a declining culture is now a public company at No. 345 in the Fortune 500 list. Last year, it opened 459 new properties, bringing the total to more than 5,700.
Hilton is No. 1 on the Fortune “Best Companies to Work For” list for 2019, from 33rd a year ago. It’s the first hospitality company in history to reach No. 1. As for Blackstone, which exited Hilton after 11 years, the investment is regarded as “the most profitable private equity deal” ever, according to Bloomberg, with a cumulative profit of $14 billion.
Nassetta puts the credit on the people who work for the company, not the suits in the C-suites. “It’s not just about making money. The purpose is to make the world a better place, creating opportunities for our team members to have a better life, creating opportunities for our communities to be stronger because of our involvement.
“The thing I will be most proud of is this,” Nassetta says of the No. 1 ranking. “Nothing will eclipse it. It’s representative of what I stand for.”