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Conrad Hilton

Conrad Hilton

The Hilton name is synonymous with hotels. Conrad Hilton (1887-1979) bought his first hotel at the age of 31 and acquired or built dozens more in his life time. Through shrewd financing and bargaining, Hilton created one of the largest hotel chains in the world.

The son of a hard-working Norwegian immigrant father and a devout Catholic mother, Conrad Nicholson Hilton grew up in the small mining town of San Antonio, in the New Mexico Territory. Hilton, known as Connie, was born December 25, 1887 to August and Mary Laufersweller Hilton. He was the second oldest of eight children and the oldest son. August Hilton was a trader and a prominent citizen of San Antonio. He owned a general store and, at various times, he also owned or operated the town's post office, bank, telegraph office and a small hotel. Hilton grew up among these businesses. Later in life, he said he learned about hard work from his father and about prayer from his mother-two lessons that remained with him throughout his life.

Hilton attended Goss Military Institute, New Mexico Military Institute, and St. Michael's College. At one point, the family moved to Long Beach, California, "because we were rich," Hilton said in his autobiography, Be My Guest. But soon after moving, August Hilton lost a lot of money in an economic downturn and the family returned to San Antonio.

The Hiltons lived in a large house across from the railroad station. As the family grew, August Hilton added rooms onto the house. When the children began leaving home, August got the idea of renting rooms to boarders for $2.50 a day. Conrad Hilton and his brothers walked to the railroad station where they would greet visitors and carry their luggage back to the boardinghouse. This was Hilton's introduction to the hotel business. Before long, the family was back on its feet and the boardinghouse was abandoned.

At the age of 21, Hilton took over management of his father's store and began sharing in the profits. He soon became frustrated with his lack of autonomy and began thinking about another career. In 1912, New Mexico became a state and Hilton was elected to the state legislature as a Republican. He worked in the legislature for two terms before leaving out of frustration with red tape and underhanded deals.

Hilton returned to San Antonio and raised $3,000 to start a bank. When the United States entered World War I, Hilton sold the bank and enlisted in the army, where he served in France in the Quartermaster Corps. In 1919, Hilton was discharged, following his father's death in a car accident. Hilton went back to San Antonio to take charge of his father's businesses.

August Hilton's empire had shrunk. He'd lost the mercantile business during the war, when it became difficult to obtain merchandise. Having seen other parts of the world, Hilton didn't want to stay in San Antonio. He was 31 years old and was anxious to make his own way.

Sought Fortune in Texas

An old friend advised Hilton to seek his fortune in Texas, where an oil boom was making men rich. With $5,000 pinned to the lining of his coat, Hilton traveled to Wichita, where he hoped to buy a bank. He found little opportunity there, so he moved on to Cisco, a smaller town near the oil fields. In Cisco, Hilton found a bank whose absentee owner agreed to sell for $75,000. When Hilton wired that he was interested, the price was raised to $80,000.

The dejected Hilton walked across the street to the Mobley Hotel to rest. He discovered a bustling lobby, with people waiting for their turn to get a room. The hotel turned the rooms over three times every 24 hours. Hilton didn't get a room that night, but within a few days, he had bought the hotel, which he described in his autobiography as a "cross between a flophouse and a gold mine."

Hilton raised $35,000 to purchase the Mobley. Over the years, he came to be known as a master financier and a cautious bargainer. Hilton soon discovered two principles that would guide him throughout his career as a hotelier. He referred to them as "digging for gold" and "esprit de corps." Digging for gold was making efficient use of space. At the Mobley, he cut down the front desk and added a newsstand. Because there were many restaurants in town and the hotel made little money on food, he converted the restaurant into guestrooms. These conversions increased revenue. Hilton liked to describe how, years later, he created a room at the Conrad Hilton Hotel in Chicago, "out of thin air." He added the room by dividing a ballroom in half horizontally and building a new floor halfway between the original floor and the high ceiling. His second principle, "esprit de corps," involved motivating the staff to provide excellent service by making them responsible for whether the guests were pleased with their stay.

Hilton earned back the money he had invested in the Mobley in one year. He went on to buy the Melba Hotel in Ft. Worth and the Waldorf in Dallas. He called these old hotels his "dowagers," which he restored to show their true beauty. Hilton built his first hotel on leased land in Dallas at a cost of $1 million. It opened in 1925.

That year, Hilton married Mary Barron, from Owens-boro, Kentucky. The couple had three sons, Conrad Nicholson II, William Barron and Eric Michael. As his family grew, so did his business. He planned to build a new hotel every year. However, shortly after announcing plans to build a $1.75 million hotel in El Paso, the stock market crashed. Hilton lost nearly everything during the Great Depression. He was $500,000 in debt and was forced to give up many of his properties. Another setback occurred in the early years of the Depression. Hilton's dedication to the hotel business cost him his marriage. Conrad and Mary Hilton divorced in 1934.

Expanded Beyond Texas

By 1937, Hilton had purchased eight hotels and paid off his debts, using profits from oil leases. Hilton acquired his first hotel outside Texas in 1938. In the post-Depression economy, he bought the Sir Francis Drake in San Francisco, which cost $4 million to build, for $275,000.

Hilton added to his holdings when he purchased the Breakers in Los Angeles and built the Albuquerque Hilton in 1939. He relocated his corporate headquarters to Los Angeles in 1942 and moved to the Bel Air section of the city. In April 1942, Hilton married the Hungarian actress, Zsa Zsa Gabor. The marriage was doomed from the beginning. A devout Catholic, Hilton married Gabor in a civil ceremony, which was never recognized by the Catholic Church. Hilton regretted that the marriage prohibited him from participating in the Church's sacraments. The couple had a daughter, Francesco, before separating in 1944. When they divorced in 1946, Hilton was restored to the Church.

Hilton's empire expanded east in 1943 when he bought the Roosevelt in New York City. Two years later, he acquired Chicago's Palmer House and the Stevens, the world's largest hotel. With hotels from coast to coast, Hilton was now recognized as a major force in the hospitality industry. His marriage to Gabor had given him celebrity status. He maintained an energetic schedule of working six days a week. He would leave work at 6 p.m. and dance as late as 3 in the morning. He was the subject of many articles and a handful of biographies in the 1940s and 1950s. His autobiography, Be My Guest, published in 1957, was placed in every Hilton hotel room, right next to the Gideon Bible.

Hilton's reputation for eccentricity was reinforced when he bought a 61-room, 35,000-square-foot home in Bel Air, California in 1950. Named Casa Encantada (House of Enchantment), the house was set on nine acres, had a swimming pool, five kitchens and was maintained by 19 servants who catered to Hilton's every need.

Corporate Expansion

The Hilton properties were operated independently until 1946, when Hilton Hotels Corporation was organized. In 1947, the company became the first hotel chain to be listed on the New York Stock Exchange. Hilton was the largest shareholder with $9 million worth of stock.

In 1949, Hilton realized a long-held goal when he leased New York's Waldorf-Astoria, considered to be the greatest hotel in the world. He had carried a picture of the Waldorf in his wallet for years, dreaming of one day owning it. Another dream came to pass when Hilton orchestrated what came to be called the largest real estate deal in history. In 1954, Hilton bought the Statler hotel chain for $111 million. His chain now totaled 28 hotels.

By the late 1940s, Hilton was poised to capitalize on the post-war travel boom. His first overseas hotel was the Castellana Hilton in Madrid. In 1948, he formed Hilton Hotels International. His motto was "World Peace Through International Trade and Travel." He told Nation's Business magazine in 1966 that he wanted to build hotels in every major city in the world. "We believe that we are helping out world peace by having these hotels," Hilton said.

The formation of Hilton International was one of Hilton's greatest achievements. But in years to come, it became a part of one of the company's biggest mistakes. In the 1960s, Hilton's second son Barron convinced him to trade Hilton International for a stake in Trans World Airways. The airline did poorly, while Hilton International thrived.

Conrad Hilton gave up active management of the company in 1966 when his son Barron was named president. The founder remained chairman of the board. Hilton Hotels continued to build and buy hotels around the world through the 1970s, 1980s and 1990s. It made its share of mistakes along the way. Its Statler Hilton Inns franchising subsidiary and Carte Blanche, a credit card company, were never very successful. Hilton continued to work six days a week. At 89, he married Mary Frances Kelly of Santa Monica. Hilton died of pneumonia in Bel Air, California on January 3, 1979, at the age of 91.

At the time of his death, the Hilton chain had 185 hotels in the United States and 75 in foreign countries. Hilton's business success was largely the result of his vision and financial prowess. He had the ability to recognize a profitable investment. When he first began building his empire, he bought hotels that had individual reputations. "I buy tradition and make the most of it," The New York Times quoted him as saying. Although he strived to give his hotels individual personalities, he also recognized the value of standardization, which he thought made travelers comfortable.

Since Hilton's death, his hotel chain has continued to expand. It has owned some of the largest hotels in the world. Its international unit was reestablished in 1982 and many of these properties were renovated in the 1980s. By the end of the twentieth century, the company that Conrad Hilton had founded with $5,000 pinned to the lining of his coat was worth $6.2 billion.

Further Reading

Dictionary of American Biography, Supplement Ten 1976-1980, edited by Kenneth T. Jackson, Charles Scribner's Sons, 1995.

Hilton, Conrad, Be My Guest, Prentice Hall, 1957.

Nation's Business, September 1966, p. 95.

New York Times, January 5, 1979.

Saturday Review, April 22, 1967, p. 54.

"Milestones," Hilton Hotels Corporate Overview, http://www.hilton.com/corporate/press/milestone.html(October 29, 1999. □

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