The idea that a multi-billion-dollar empire was launched from a chance encounter in Fat Eddie’s coffee shop with a cheque written on a napkin seems like something that could only be found in a Hollywood pitch meeting. So it is fitting that this very true story took place in the very first Hyatt hotel across from the Los Angeles airport.
As legend has it, in 1957, Chicago-based businessman Jay Pritzker was killing time in Fat Eddie’s when he noticed that the hotel was filled to capacity. After a quick inquiry, he discovered there would not be a vacancy for a few days. And that’s when Jay Pritzker had his epiphany. Why only place high-end hotels downtown so far from the airport? Business travellers would surely flock to luxurious accommodations that had the added convenience of being airport adjacent.
Pritzker was so certain of this, he summoned the hotel owner, a man named Hyatt von Dehn, and they agreed on a sale price of $2.2 million on the spot. As Pritzker did not have the forethought to carry his checkbook with him, he wrote a makeshift but legally binding check on a napkin.
Blazing a Trail in the Industry
Jay partnered with his younger brother Donald to turn this vision into a realty. The boys were the grandsons of Russian Jewish immigrants who came to America from a shtetl near Kiev in 1881, and by the time they were born, the family had achieved some success in the new world in various business ventures.
The key to Pritzker’s vision was combining convenience with luxury. Today the airport hotel is as ubiquitous in any developed city as traffic lights and park benches. But in the late 1950’s this concept didn’t exist. So by the end of the first four years working together, the Pritzker brothers expanded Hyatt into a chain of six hotels, mostly in the western United States.
The Birth of a Landmark
Of course, Jay Pritzker’s vision was more than just airport hotels. He wanted the Hyatt name to be synonymous with luxury and elite accommodations. So in 1967, when an Atlanta property became available, he saw another opportunity to put Hyatt on the world map. The Atlanta property didn’t have many takers because it was originally designed with an indoor atrium which some feared would cause condensation on the skylight glass panels, and in turn, an indoor rainfall when the water droplets would grow. Pritzker saw the opportunity to create a signature architectural wonder and in 1967, the now world famous Atlanta Regency Hotel opened its doors. By the end of the 1960’s the Hyatt chain had grown to 13 hotels.
The 1980’s – A time of Growth and Change
After an initial period of being a publicly traded company, Jay Pritzker bought back the majority stake of shares and took his family business private once again in 1979. As the new decade rolled around, it marked a changing of the guard at the head of the company. Jay’s son Thomas Pritzker took over as President of the company while Jay remained Chairman & CEO.
The year 1980 also saw the debut of three new skews of luxury accommodations with the opening of the first Park Hyatt, the first Grand Hyatt, and the first Hyatt resort. Each was designed with a specific clientele in mind. The Park Hyatt was for those looking for a smaller European hotel experience, the Gran Hyatt for higher end luxury, while the Hyatt Resorts were tailored to reflect the culture of where they were situated.
The Breakup of the Hyatt Empire
Upon Jay’s death in 1999, the family decided it would break up and parcel out the family empire. Perhaps not surpassingly, this led to much family infighting over who would get what and how much. In an interview with the financial times, Thomas recounts this difficult time for him and the family business.
“Presiding over the dissolution was painful,” Pritzker said. “There were many different views about the family situation. In most things, it is possible to make a course correction but this was a decision that was irreversible. If you make an acquisition, for example, and you are wrong, you can mitigate what you’ve done. You don’t agonise. You just calculate whether this math is better than that math.”
The Hyatt Legacy Today
That spur of the moment deal that was struck in Fat Eddie’s coffee shop 50 years ago has turned Hyatt into a hospitality Goliath that, as of September 2016, saw 279 properties in 54 countries generating $4.4 billion in revenue.
The brand now has plans to take make itself public again, with Thomas Pritzker claiming it as an important step to ensuring their future success. “We are more focused. And it is my job to make sure we maintain our core values,” he said.
