5 Things to Know About HSMAI Lifetime Marketing Honoree Lee Pillsbury

When Leland Pillsbury was a little kid, his family drove to Florida for a vacation, leaving from their home in Upstate New York. They stopped at a motor inn along the way, and his parents ended up leaving him with the two young women working the front desk while they checked into their room. “My parents had been driving for 10 hours with me in the car as a five-year-old boy,” Pillsbury said in a recent interview with HSMAI. “You can imagine how stressful that had been. How many license plates and how many cows can you count?”

The front-desk workers entertained Pillsbury for about 20 minutes, then took him to the dining room, where a hostess and a waitress took over. Another 20 minutes, and they handed him off to a member of the kitchen staff, “who must’ve been about a 28-year-old young man,” Pillsbury said. “Of course, he didn’t know anything about five-year-old boys, but he did know something about ice cream, so he handed me a spoon.” Soon Pillsbury was headfirst in an ice-cream freezer, helping himself to five-gallon tubs of vanilla and chocolate.

“Years later, when I’m sitting at the dining room table with my parents and said, ‘All right, I’m going to apply to hotel school,’ my mother looked at my father and said, ‘Where in the world did he get that idea?’” Pillsbury said. “Of course, it was perfectly obvious. You want to spend your time with people who are fun and are nice to you, and there’s ice cream. I knew from the time that I was in high school that I wanted to be a manager of a hotel. That was a no-brainer.”

It’s hard to argue with the results. After graduating from The Hotel School at Cornell University, where he served as president of the student HSMAI chapter, Pillsbury went on to about as distinguished and diverse a career as you can have in hospitality — starting with Marriott, which he joined to do sales for a property in downtown Houston and ended up as an executive vice president in charge of product development and strategy, including launching the Fairfield Inn brand, acquiring Residence Inn, and leading the company’s entry into time-sharing. He also launched the industry’s first revenue management system and pioneered now-standard practices such as slipping the folio under a guest’s door before checkout.

Pillsbury left Marriott in 1991 to found Thayer Lodging Group, where he served as CEO until 2014, when the company was sold to Brookfield Properties. Today, Pillsbury is a managing director of Thayer Ventures, which invests in hospitality and travel technology companies, and as founding chairman of TenX Healthcare, a startup that is focused on transforming the patient journey through surgery. With his wife, he endowed the Pillsbury Institute for Hospitality Entrepreneurship at Cornell, where he also serves on the board of trustees.

On Jan. 21, he received HSMAI’s Albert E. Koehl Award for Lifetime Achievement in Hospitality Marketing, which was presented at the Adrian Awards Dinner Reception and Gala in New York City. “When you say lifetime, it means I’m old,” Pillsbury said with a laugh. “It means I’ve been at this a long time.”

Indeed — a long enough time that he had these five interesting things to share with us:

1. He had formative experiences with the two Mr. Marriotts. “When I first joined Marriott, I was training at the Hot Shoppe on Wisconsin Avenue in Washington, D.C. Bill Marriott’s dad, the chairman, one day after the lunch hour, walked me around the parking lot. He was picking up cigarette butts in the parking lot, and he said, ‘If I pick up the cigarette butts, everybody will pick up the cigarette butts, but if I don’t pick them up, nobody picks them up.’ That always stuck with me. Then years later, Bill used to come visit my hotels when I was a general manager. I was always delighted when he would come. Some of my peers said, ‘Boy, when Mr. Marriott comes to visit, it’s a hell of a lot of work,’ but I said, ‘You know what? I’m thrilled when Mr. Marriott wants to come visit my hotel, because he walks in the hotel and he shakes everybody’s hand and he thanks them. For the next month, my job is easy because everybody is on cloud nine because Mr. Marriott came through and recognized them, called them by name, and shook their hand.’ He taught me the importance of recognizing people and calling them by name and taking care of the people that take care of the guests.’

2. He saw an opportunity in a crisis. “In the last several years that I was at Marriott as executive vice president, I had a strategy. We were building hotels at a fantastic pace — Fairfield Inns, Courtyards, Residence Inns — and then packaging them and selling them. Then the savings and loan crisis happened. A lot of the hotels that we had built in the 1980s were trading for 50 cents on the dollar; in some cases, less than that. There was an opportunity to arbitrage, if you will, between the institutional investors and the hotel companies. This is before the advent of real estate investment trusts. I convinced Fred Malek, who had been president of Marriott Hotels, to join me [in starting Thayer Lodging Group]. Over the course of the next 25 years, we launched a series of six large institutional private equity funds that invested in hotels. Over those 25 years, our investors averaged a 26.2-percent internal rate of return.”

3. He was an early adopter. “Along the way, we started a number of companies. We started a company called TIG Global and built the first website for a hotel in 1994, two years before Expedia was created. It was for a DoubleTree in Fort Lauderdale, Florida. We built this website, and two days later we got an inquiry. We didn’t have a booking engine or anything like that, but we got this inquiry from Norway. We looked at each other and said, ‘This is pretty interesting. We could put some pictures up. This is pretty fun.’ We then subsequently built websites for, I think at the time we had 12 or 15 hotels in our portfolio. Then Expedia came along. We sat down with a couple of our executives and said, ‘How would you like to take this and make it a business?’ So they did. They were ultimately doing search engine optimization and website creations for about 1,500 hotels. The company was ultimately sold to MICROS. We also built a commercial insurance business that specialized in underwriting insurance exclusively for hotels.”

4. He’s always sought inspiration outside hospitality. “I try to look at markets and businesses and then develop insights from those businesses that can generate insights about our business. For example, I took Bill Marriott to a grocery store early on, and we stood at the head of the soda aisle. And there was Coke, Diet Coke, Tab — all of the various Coke products. Down at the other end was Pepsi, Diet Pepsi — all of the Pepsi products. As I looked at the soda business, I said to myself, ‘Think of this as the Atlanta hotel aisle.’ With Marriott, we’ve got one hotel in the Atlanta hotel aisle. If we’re going to be a big hotel company, we’ve got to have a lot of hotels on the hotel aisle in Atlanta, so over the next two years we built 43 hotels in Atlanta. The idea is that, as you study an industry, as you study a market, what insights can you develop that you can say, aha, and take that to another industry? And that leads to the inspiration to say, ‘Let’s build 43 hotels in Atlanta.’”

5. He has simple advice for hospitality students. “The key to success in this business is curiosity. The kindergarten teacher holds up a piece of paper and says, ‘What color is this?’ And everybody shouts out, ‘It’s white!’ Then you get to second grade and you learn to hold up your hand and be called on and say, ‘It’s white.’ Then you get to fourth grade and you learn to spell white, and maybe in sixth grade you even learn to write it in cursive. And all the way through school, even into college, it’s ‘What’s the answer?’ But the really smart person says, ‘Well, why? Why is that white? Why do you ask that?’ And the reality is, it isn’t white. It’s white only because there’s a white light shining on it. If you shine a red light on it, it’s red. So, what I tell people is, be curious: Why do you ask that question? Why do you want to know that? What do you really mean? What’s behind that question? What’s the parallel here? What’s the relevance of the soda aisle to the hotel industry in Atlanta?”

Categories: Marketing
Insight Type: Articles