Ritz Carlton Founder Horst Schulze - A Master Class In Customer Service | PBD #735

Patrick Bet-David sits down with Horst Schulze, the visionary who helped envision The Ritz-Carlton, to break down leadership, purpose, and world-class culture. From wartime Germany to influencing Steve Jobs, he shares powerful lessons on service, discipline, and building excellence. ------ 👔 GENTLEMAN'S COLLECTION: https://bit.ly/45XbiwP Ⓜ️ CONNECT ON MINNECT: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4kSVkso ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4kSVkso Ⓜ️ PBD PODCAST CIRCLES: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4mAWQAP⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4mAWQAP 👔 BET-DAVID CONSULTING: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4lzQph2 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4lzQph2 🥃 BOARDROOM CIGAR LOUNGE: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4pzLEXj⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4pzLEXj 💬 TEXT US: Text “PODCAST” to 310-340-1132 to get the latest updates in real-time! ABOUT US: Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  I came to conclusion, I'm working for barbarians. No fish knives, no fish fork. And they live in a situation where human beings shouldn't live. My father joined the Nazi party because he had always worked. My grandfather was a unique character. Said if our son died, he will die too.

• 0:19Patrick Bet-David?

  So living in that environment impacts your life in a big way as a kid?

• 0:22Speaker 00

  No doubt.

• 0:23Patrick Bet-David?

  I will never go to that Ritz Carlton in Fort Lauderdale ever again.

• 0:28Speaker 00

  You understand, I cannot compromise that. You understand, I'm getting upset.

• 0:34Patrick Bet-David?

  I said, there is no way this is horse's standard.

• 0:38Speaker 00

  And Danny said, and don't come to work tomorrow. Come here to create excellence. Now, I didn't get that.

• 0:45Patrick Bet-David?

  You were number one when you guys left?

• 0:46Speaker 00

  Oh, sure.

• 0:47Patrick Bet-David?

  They dropped from one to 26, and Capella's number one.

• 0:50Speaker 00

  Yeah, I insisted, wherever we are, we're number one. Period. And the general manager said, will you accept that?

• 0:59Patrick Bet-David?

  What's your superpower?

• 1:03Speaker 00

  Relentless.

• 1:15Patrick Bet-David?

  Here's a promise I'll make you. By the time you're done watching this interview with the founder of Ritz Carlton, your life will change. I'm telling you right now, it's a big promise, and I don't normally open up an interview saying this. This was one of my favorite interviews I've ever done in my life with an 87-year-old man that was born in Nazi Germany in 39. His father was in the military. His father was a Nazi, his mother hated the Nazis. And all he talked about was love and respect. And how this boy from this city in Germany grows up, goes into the hospitality business, eventually starts Ritz Carlton. Later on, the only business ever to get two awards from the government for the best service in the world

• 2:00Patrick Bet-David?

  that what came with that honor was the fact that you had to let any company come to your company to learn customer service. And guess one of the guys that showed up? Steve Jobs showed up. And said, how can we make apples customer service better in the early 90s? The meetings he had, the people he served over the years, the philosophies. Yeah, I asked him a question. I said, tell me about the managers you manage. He said 65 managers. I said, of the 65 managers, how many were leaders? How many were managers? Five leaders, five, uh, 60 were managers. I said, give me the best one that you had. What did they do? He gave three principles of what this guy did. Breaking it down. Here's what made this guy better executive. Here's what made him a better leader. How do you deal with confrontation? How do you deal with issues?

• 2:41Patrick Bet-David?

  The answer is going to shock you. And for us, we've had Ritz come here and train us in this exact room. With all of our executives. And then I shared an experience we had. With a local Ritz Carlton in Fort Lauderdale. And I asked him, I said, so. How is Ritz customer service been? Since you left, I think in early 2000, 2002. And his answer, he did not want to give the answer, but he eventually gave the answer. And it was a shocking answer of what happens. After the founder of Ritz left. And what happened to their customer service at the time they were number one. And then what he did later on with the company called Capella. And then. While we're sitting here, he's talking about an email he got from a previous. Friend employee that went to Ritz Carlton. He was in pain. He got emotional.

• 3:24Patrick Bet-David?

  Talking about the fact that those standards are no longer there at Ritz. Again, I can go on and on. Married to his wife for I think almost 50 years, 47 years. Raised four kids, broke down principles, values on personal life, all of that. I, I can't go on with a ton of stories, but I'll wrap it up with this one quote that he said from early. One of his mentors, which you have to see when he tells the story to you. Please. Promise me you won't be a chair.

• 3:54Patrick Bet-David?

  Please promise me you won't be a chair. The amount of money he's made. He's met people from Onassis back in the days. Remember, this man's been around for 87 years. To many of the recent presidents, all the presidents that we've had. And at 17 and a half years old, his first manager told him, promise me you won't be a chair. Meaning one day when he becomes successful, he won't be somebody that just sits out there telling people what to do. And he kept that promise. Your life is about to change by the time you're done watching this interview. With the one and only founder of Ritz. Horst Schulze. Enjoy this interview.

• 4:40Speaker 02

  My handshake is better than anything I ever signed, right here.

• 4:45Patrick Bet-David?

  You are a one of one. I send you right there.

• 4:47Speaker 02

  I don't think I've ever said this before.

• 4:53Speaker 00

  That's a simple decision to make, in my opinion.

• 4:55Patrick Bet-David?

  I agree with you. And by the way, Horst, you need to know this. Like, I've been following your work for many years.

• 5:00Speaker 00

  Thank you.

• 5:00Patrick Bet-David?

  We read the book, we see the work that you've done over the years. We brought, in October of 2024, a Ritz trainer to teach on standards of excellence in this room. We took all our executives, all our managers for a full day. She did a great job on the training, on what you guys stand for, questions to ask. And, you know, I've been a customer of yours for decades, going to Ritz-Carlton all over the world. And to sit with the guy that came up with the ideas, to talk to you, it's a pleasure. It's great having you on the podcast.

• 5:28Speaker 00

  Thank you. Great to be with you.

• 5:29Patrick Bet-David?

  Yes.

• 5:29Speaker 00

  And in turn, I admire what you're doing.

• 5:33Patrick Bet-David?

  Well, thank you.

• 5:33Speaker 00

  Truly do.

• 5:34Patrick Bet-David?

  Thank you. Thank you. So let's get right into it. I'm looking at, as I'm going through the story, I'm like, wait a minute. He was born in 1939 in Stuttgart, Germany?

• 5:44Speaker 00

  Wasn't Stuttgart, but was Germany.

• 5:45Patrick Bet-David?

  Outside of Stuttgart, in the wine area, you know, where wine, and apparently it's right next to the Luxembourg in France, on that area, where it's like a perfect market to create wine. So to go from there to where you are today, I want to first go into the story, how everything got started. When you were born, what was Germany going through?

• 6:04Speaker 00

  Start of the war. Beginning of the war, 39. In fact, my father was drafted late 39, and was, came back in between, but left permanently, if you will, in 41. I got to know him, I got to meet him the next time, and I was seven.

• 6:22Patrick Bet-David?

  So you meet your father first time at seven years old?

• 6:25Speaker 00

  Well, consciously met him. I mean, I was a baby, yeah. Yeah. In fact, in fact, I was playing with another kid in the mud heap somewhere, in a village, I live in a village. Somebody came running, "Go home, your dad came home."

• 6:40Patrick Bet-David?

  Go home, your dad came home.

• 6:41Speaker 00

  So I ran down the street, go home was a couple hundred yards, run there and there was a bunches of people assembled already, every neighbor, everybody in town. That was the news when a guy came back from prison camp. You know, and it was, and he just came back and I went through the miles, I knew it was him. It is, it's a guy with a tattered uniform and everybody else wasn't. So I got in and I looked at him and I said dad, and then he knew who I was, you know.

• 7:09Patrick Bet-David?

  What was that reaction?

• 7:10Speaker 00

  Oh, well, shock and moment and then people crying and so on. That is what you remember, the extremes you remember in the moment.

• 7:18Patrick Bet-David?

  Do you remember that day till today?

• 7:20Speaker 00

  Oh, yeah, sure, yeah, yeah, yeah.

• 7:22Patrick Bet-David?

  It's pretty wild.

• 7:23Speaker 00

  No kidding, yeah.

• 7:24Patrick Bet-David?

  I mean, I was born in Iran in seventy-eight. So when the revolution happened and we left in eighty-nine. So living in that environment impacts your life in a big way as a kid.

• 7:35Speaker 00

  No doubt.

• 7:35Patrick Bet-David?

  What did it do to you?

• 7:36Speaker 00

  Well, it, it, it, I don't exactly understand because I was there and with eleven years old and somehow that must have all have an impact. With eleven years, I went to my parents and said, I want to go to work, I want to work in a hotel.

• 7:53Patrick Bet-David?

  At eleven years old?

• 7:55Speaker 00

  Yeah, and I'd never, there was no hotel in the village, never been in hotel, I'd never been in a restaurant.

• 8:00Patrick Bet-David?

  So how do you know this? Are you watching a movie? Are you reading books?

• 8:03Speaker 00

  Everybody is wondering, I must have read something, exactly. My parent, my mother never forgave me because, never forgave herself because she done inquire, how we gonna do that? When I kept on begging and begging and crying. And so somebody said, well, he should start in a very good hotel. So they look, what's the best hotel? Unfortunately, it was over a hundred kilometers away. So with fourteen, I actually left, lived in a dorm room in that hotel. And all that was an impact of the environment where that came from and then we sat down often with my parents and tried to. Analyze it.

• 8:47Speaker 00

  There was no real answer.

• 8:49Patrick Bet-David?

  No movie, no book, no person, no teacher.

• 8:53Speaker 00

  There was movie, there were none at the time, so are you kidding?

• 8:55Patrick Bet-David?

  I know, what I'm trying to find out about Hattie, because I read somewhere as well that you said, as early as four years old, you know you wanted to be in the hotel business?

• 9:02Speaker 00

  No, no, it was eleven.

• 9:03Patrick Bet-David?

  Eleven years old, okay, yeah, so when I read this, Rob, where was it we read that said as early as four years old? I said, four years old, for him to know at four years old, how does that happen?

• 9:12Speaker 00

  No, no.

• 9:12Patrick Bet-David?

  What was it like? Maybe, you know, because today when we read about it, thirty-nine, Germany goes to war, uh, in September, I think you're born April twenty-fifth, so five months-

• 9:22Speaker 00

  January tenth.

• 9:23Patrick Bet-David?

  January tenth, okay, so you're born January tenth?

• 9:25Speaker 00

  Yeah.

• 9:26Patrick Bet-David?

  Okay, so January, online says April twenty-fifth, by the way. And you're pretty private with your, uh, with your, uh-

• 9:31Speaker 00

  Yeah.

• 9:32Patrick Bet-David?

  So January tenth you're born, few months later the country goes to war. What is the conditions like where you're living? I know, of course, you don't remember that, that age, but-

• 9:40Speaker 00

  Yes, yes, you do, because there was some, such extremes, uh, uh, pretty soon we, we went to sleep in the cellar. Uh, we broke the cellar wall in so, in case the house would collapse, we could go into the next neighbor and so on, so on, they were all connected. Uh, so my, my mother, my, my father joined the Nazi party because he hated, was working, my mother was a major negative. And let, let me give you a story that is hard to believe. My father, we, we didn't hear from him, my, my parents didn't hear from him. But my grandfather, who was hated Nazis, every morning came to my house, he lived in a different house, at seven AM,

• 10:26Speaker 00

  took the axe, that was there from wood chopping plant, and stayed behind the door and looked through the slot in the door, the old wooden door. Because the chief Nazi went to work that morning. When he went to work, he told, stopped in the families where the sun had fallen, and informed them. And my grandfather was a unique character, said if our son died, he will die too. When he comes and hear the report, he's gonna die. So, you think you don't know that as a kid? Opa- Is coming to take the axe, that was a normal daily routine. So you you can't help but remember those things, you know.

• 11:09Speaker 00

  So so or or when when there was the message that Hitler had been killed for a moment in the radio, my mother was in a grocery store, buying grocery when it came, the Fuhrer has been killed for a moment that was out and of course that changed a few minutes later. And my mother said, Gott sei Dank, thank God, it's it's time. She was arrested the next day. Stop it. Just for a day because her uncle was a Nazi, so that's what Oh my God. That's what life was, there was nothing. But what was there at the same time, everything was still continue, still had something to

• 11:50Speaker 00

  eat, there still was kindergarten, even though when you had to ride, walked into kindergarten, you had to greet the Hitler at the at the the painting of Hitler. But it was all functioning somewhat. It's right after the war when nothing was functioning anymore. And there was a total breakdown because there was no control, there was no nothing there. The the interesting thing at the time, the Allies decided nobody who was a Nazi could work in a leadership role. Well, everybody who was in leadership role, if you were running a water, you had to be Nazi, you had to be Nazi, otherwise you you you Killed.

• 12:35Speaker 00

  So who do you put into this roles now? It was Patton, in fact, who said, no, we're not going to do that, we have to put the people back to understand the job. I mean, that that's how, there was a total breakdown, there was no school, there was no transportation, there was nothing after the war, right after the war. So that was, and of course, those created such extreme moments that you do remember, no doubt.

• 13:04Patrick Bet-David?

  Yeah, you see the inflation. There was some reports I saw that the price of bread could double every two hours, every four hours, some weird stories that you would you would read about. Uh, so do you remember the day uh uh it was announced that Hitler died?

• 13:18Speaker 00

  No, I don't remember. No, I I only knew my my mother was in trouble.

• 13:22Patrick Bet-David?

  She got arrested.

• 13:24Speaker 00

  Yeah.

• 13:24Patrick Bet-David?

  And this was even the the right one. This is the day that she thought he died, that he he didn't die.

• 13:29Speaker 00

  For the moment, for the moment was announced, uh Stauffmaier, who tried to kill him, thought he was dead, he announced and it was open. That's how how everybody was exposed because it they got a message he died. Consequently, everybody that was part of the plot, twenty thousand exposed themselves, took over in various towns and were killed afterwards. That's how they knew. They were all all involved, that huge plot, yeah.

• 13:53Patrick Bet-David?

  Twenty thousand?

• 13:54Speaker 00

  Yeah.

• 13:55Patrick Bet-David?

  It it how do you? Because when I'm seeing you speak, or I watch your interviews, or I sit down with you right now, or you're coming up to me, read this book, I'm gonna help you change your life, you're a very positive figure, right? Your intensity, your energy, you've been married for many years, you're a man of faith, you know, you speak in a very eloquent way. Even at that moment, were you staying positive? Was it your mom that helped you be positive?

• 14:18Speaker 00

  My mom.

• 14:19Patrick Bet-David?

  How would your mom make you positive?

• 14:20Speaker 00

  Very positive about life, about everything.

• 14:25Patrick Bet-David?

  In in Germany at that time?

• 14:26Speaker 00

  In Germany at the time.

• 14:27Patrick Bet-David?

  Good for her.

• 14:28Speaker 00

  For for example, also, my dad, whom we didn't hear from for over a year because his group was behind the line and behind the lines in Russia, so you didn't hear anything for over a year. And we didn't know if he was alive or dead. He was alive in our house. My mother said, I'm, oh, that's a good job. I would tell dad. Or don't do that, your dad won't like that. So he was constantly alive there. And and and she kept him in the house. And it was nearly like he was there, you know? So that was and and it's interesting, that's that's how mothers are, that's a mother, I mean, um. I I told you when I finally she talked me to this job, which was far away from home.

• 15:13Speaker 00

  She knew I was very homesick, but I wanted to be there. And but she wrote me a letter every day. If I didn't have one today, I had two tomorrow. Help me through.

• 15:25Patrick Bet-David?

  What an amazing mother. What a great story.

• 15:28Speaker 00

  It speaks about mothers, you know.

• 15:30Patrick Bet-David?

  Unbelievable.

• 15:31Speaker 00

  Yeah.

• 15:32Patrick Bet-David?

  So she was the reason why you became positive. So you, so you leave at fourteen. By the way, how many kids were you guys? How big was the family?

• 15:39Speaker 00

  I had a brother that was eight years older. He had left already.

• 15:42Patrick Bet-David?

  So he was in the military?

• 15:44Speaker 00

  No, no, he was, he was, he was studying and working.

• 15:48Patrick Bet-David?

  He started studying and working?

• 15:49Speaker 00

  Yeah.

• 15:50Patrick Bet-David?

  So you were by yourself, living with mom before you left at fourteen years old?

• 15:53Speaker 00

  That's correct, yeah.

• 15:54Patrick Bet-David?

  Okay.

• 15:55Speaker 00

  But my father was there in the meantime. When I was fourteen, he came back when I was seven.

• 16:00Patrick Bet-David?

  So from seven to fourteen, your father was there?

• 16:02Speaker 00

  Correct.

• 16:03Patrick Bet-David?

  What influence did your father have on you?

• 16:05Speaker 00

  Well, a very, very high demand person. Work hard, do everything right, everything with values. I, I, I read the Bonhoeffer book where Metaxas says, tells about Bonhoeffer's, which was a very rich family. Sitting around a table and the, the attitude was, don't talk unless you have something important to say. This was true in a very rich family. That was also true in a very poor family in our house. Sit down, eat, do everything right.

• 16:38Patrick Bet-David?

  Wow, lots of order.

• 16:39Speaker 00

  Don't do it unless it's unright.

• 16:41Patrick Bet-David?

  Is that a German thing?

• 16:42Speaker 00

  I guess so, but believe me.

• 16:44Patrick Bet-David?

  A Schulze thing?

• 16:45Speaker 00

  Believe me, it was in our house, how German it is, I don't know.

• 16:48Patrick Bet-David?

  Got it. Yeah, Bonhoeffer is an amazing story. My pastor Dudley Rutherford bought me a book.

• 16:53Speaker 00

  Yeah.

• 16:53Patrick Bet-David?

  Uh, twenty years ago, eighteen years ago, to read on Bonhoeffer. Incredible story on what he went through. So, but, but going back to it, so. Dad was order, structure, system. Mom was attitude, positivity, everything's gonna work itself.

• 17:06Speaker 00

  And love.

• 17:06Patrick Bet-David?

  Love?

• 17:07Speaker 00

  Love.

• 17:07Patrick Bet-David?

  From mom?

• 17:08Speaker 00

  Oh, totally.

• 17:09Patrick Bet-David?

  How did she show it?

• 17:10Speaker 00

  By telling, by hugging, by holding, by, by, by saying, by, by saying, I love you. There was, I don't think I was. There was a day where I wasn't told ten times that she loves me. I mean, that and and that, of course, plays a role too. Then I can see that that's how I am today with my wife or with my children. You know.

• 17:33Patrick Bet-David?

  Same way?

• 17:34Speaker 00

  Oh, yeah, very much so.

• 17:35Patrick Bet-David?

  Are you more like your dad or your mom?

• 17:37Speaker 00

  My mom.

• 17:38Patrick Bet-David?

  More like your mom?

• 17:39Speaker 00

  My mom, yeah. But but in my intensity of doing things, I'm I'm my dad.

• 17:46Patrick Bet-David?

  You're your dad?

• 17:47Speaker 00

  Yeah.

• 17:47Patrick Bet-David?

  At fourteen, when you're left to go to the apprentice apprenticeship, and how long are you away? Are you coming back home? Are you seeing the family? What what does that process look like?

• 17:58Speaker 00

  Every three, four months.

• 17:59Patrick Bet-David?

  Every three or four months, you're seeing them?

• 18:01Speaker 00

  Yeah.

• 18:01Patrick Bet-David?

  And this place you went to, where was it? What did they teach you?

• 18:04Speaker 00

  Oh, well, it was it. My mother took me there. And the first thing I meet is the general manager of the hotel. Now, in Germany, the general manager was a god, understand? And he told me, he spoke to us for two minutes. And the only message was now, you are here to study and learn how to become a servant to very important ladies and gentlemen, our guests. That's what I wanted. That's why I wanted. That was my dream, to live in a beautiful surrounding and and serve wonderful people, non-people. But the next person was the head waiter of the hotel, the maître d', the head waiter, whom I actually would work for.

• 18:47Speaker 00

  And he changed my life with two sentences, totally. Now, mind you, I was fourteen. I didn't know it in the moment, but he lifts those two sentences. And it was overwhelming. And he, you know, when you're fourteen, you're being formed still.

• 19:02Patrick Bet-David?

  Sure.

• 19:03Speaker 00

  And he said at the time, the first thing he said, now, young man, tomorrow show up at seven a.m.

• 19:10Speaker 00

  If I meant one minute after seven, I would tell you so. Now, it translated in, after I could see, when we say something, we do it correctly and we mean it and we do everything right here. And then he said, and don't come to work tomorrow. Come here to create excellence. No, I didn't get that. I went right over my head. I said, wait a minute. Is, do I have to do something else? And I thought, I thought I would have to wash dishes, clean floors and so on. Yes, I did.

• 19:44Patrick Bet-David?

  That comes with it. Got it. So what was the sentence? Come here to work with excellence?

• 19:49Speaker 00

  Come here, don't come to work, come here to create excellence.

• 19:52Patrick Bet-David?

  To create excellence. And how long did he stay as your mentor? How many years?

• 19:56Speaker 00

  Three and a half, yes.

• 19:57Patrick Bet-David?

  Three and a half years you worked under him?

• 19:59Speaker 00

  And he, and he from my life and everyone, when, when, when he said, create excellence, he, he meant, don't come here to fulfill a function. Come here for a high intent. Your function, and, and, and I'm jealous about her today. I wouldn't hire people to fulfill a function. Hire them for purpose, for high intent. He, he, for example, he made it very clear, our function may be to bring and serve food and beverage. Our intent is to instill well-being in people. So, that, from my life, I don't do anything without purpose.

• 20:44Speaker 00

  And, and I, I think you're not, in fact, I, I make it very, very clear and I use the same phrase than he did. The chairs on which you sit are fulfilling a function. You're a human being. You don't fulfill a function without purpose.

• 21:00Speaker 00

  And, and I find it even immoral that we as companies hire people to fulfill a function, rather than to join us in our vision and our purpose.

• 21:10Patrick Bet-David?

  On a vision, a mission, a purpose, something bigger than us?

• 21:12Speaker 00

  Purpose, that's right.

• 21:14Patrick Bet-David?

  So you, you picked that up from him? Did you spend a lot of time with that general manager or not that much? You were more spending time, because general manager was the guy?

• 21:21Speaker 00

  Once in a while he passed by and said, good morning.

• 21:24Patrick Bet-David?

  How serious was he? Was that a very common thing in Germany? Super serious? Super disciplined? Were those the qualities?

• 21:33Speaker 00

  Absolutely.

• 21:34Patrick Bet-David?

  I lived in Germany for a year and a half.

• 21:35Speaker 00

  Absolutely.

• 21:36Patrick Bet-David?

  In Erlangen. I was in Erlangen, uh, uh, uh, right outside of Nuremberg.

• 21:39Speaker 00

  Yeah.

• 21:40Patrick Bet-David?

  And, uh, it was in nineteen eighty-nine to nineteen ninety. And I went to school for two years. You know, it was a very, you know, military-like, ach tung, you know, it was a very, you know, be ready for it.

• 21:51Speaker 00

  Sure.

• 21:51Patrick Bet-David?

  It was a different intensity you got from them.

• 21:54Speaker 00

  Absolutely.

• 21:54Patrick Bet-David?

  Yeah. Even right now, where our son plays soccer and we have an option to sending two different places to Germany or to Spain, all the coaches are sending Germany is more disciplined? Spain, he'll learn the game, but he'll have fun, but Germany is very much, you better get your act together. Yes. So what happens after that? So what happens? You're there for three and a half years. What do you do next?

• 22:14Speaker 00

  And, and next, I, it was pretty common and, and also recommended again from that head waiter to work seasons in various great hotels in Europe. So I went out and worked in, in Bern, in the Bellew Palace, one of the great hotels of the world, in Lusanne, in the Boerwijk Palace. I worked Holland America Line for, for eight months. I worked in Paris. I stayed there two and a half years in the Plaza Atene, which was one of the great hotels in the world. Worked in the Savoy in London. And in the Savoy, as I worked as a waiter, a guest said, "You're a great waiter. Do you want to come to America?" And I said, "Sure." Now, if he would have said Zimbabwe, I would have said sure too.

• 22:59Patrick Bet-David?

  You just wanted a leave? You want an opportunity?

• 23:03Speaker 00

  I was young.

• 23:04Patrick Bet-David?

  Yeah. How old are you at that time?

• 23:06Speaker 00

  Capture the world. At that time, I was twenty, twenty-three.

• 23:08Patrick Bet-David?

  Twenty-three. Okay.

• 23:10Speaker 00

  Capture the world.

• 23:11Patrick Bet-David?

  Sure.

• 23:12Speaker 00

  Be and see the world, capture the world, learn, learn new things. So he said, "All right, give me your name. I will send you papers. We are opening a new hotel in Houston." And once you get the papers, go to the, to the embassy. And that's what I did. And in the embassy, so they, at that time, immigrant at that time, me.

• 23:34Speaker 00

  I went through a physical, careful physical. I went to an oral test. I went to a written test. Yes. And in the evening, they gave me some.

• 23:43Patrick Bet-David?

  Get a job.

• 23:44Speaker 00

  Yes. And the evening, they gave me some papers and asked me, when will you go to America? And I said, when I get my papers. And they said, you have them in your hand.

• 23:56Speaker 00

  And then I, then I took the ship on which I had worked as a passenger.

• 24:02Patrick Bet-David?

  Stop it.

• 24:02Speaker 00

  Yeah.

• 24:03Patrick Bet-David?

  So you go with the ship to the States.

• 24:05Speaker 00

  Yeah. Oh, at the time, there were no, there were no planes at the time.

• 24:08Patrick Bet-David?

  Right, makes sense.

• 24:09Speaker 00

  Basically.

• 24:10Patrick Bet-David?

  Makes sense. I, I, I keep forgetting, you're born in thirty nine.

• 24:13Speaker 00

  Yeah.

• 24:13Patrick Bet-David?

  Times are different when you're born in thirty nine. You know, it's, it's a, it's a very different world. When was the first time, I remember you said, uh, when you first started working at the hotel, you're like, I wanted to work in luxury. I'm gonna meet people. I'm gonna meet these interesting people, powerful people. Who was the first person you met that was a celebrity that you recognize saying, oh, my God?

• 24:30Speaker 00

  A, a very famous Seppan, who was a very famous soccer player before that.

• 24:36Patrick Bet-David?

  Seppan.

• 24:36Speaker 00

  Yeah, that was more important than, oh, I met, I met all the politicians of the, of the time. If that was Aden, our house and so. At the time, everybody was there. That was the hotel where you were, was that one. And, and, and the general manager was right. The guests sitting there, all of them were important. That was the place to be. And it was at the same time a spa hotel and so on. So when I met Seppan, that was, uh, meeting a great, famous soccer player was more important than meeting all the other.

• 25:10Patrick Bet-David?

  Of course, politicians, the leaders, yeah.

• 25:12Speaker 00

  I, later, for example, I worked in the, the late, late fifties, uh, sixty in Paris. And then this, you, you name it, if it was Saraya at the time.

• 25:27Speaker 00

  Or Chris Kelly, or Gary Cooper, I served them all.

• 25:31Patrick Bet-David?

  Grace Kelly?

• 25:32Speaker 00

  Grace Kelly, absolutely.

• 25:33Patrick Bet-David?

  Did you ever serve Onassis?

• 25:35Speaker 00

  Oh, yeah, sure. I served them all, the big um, and so on. That, those were the guests.

• 25:42Patrick Bet-David?

  What did you notice? Was there a pattern? What you noticed with this life of the rich and famous? What, what patterns did you notice?

• 25:49Speaker 00

  Well, the pattern was that, that we who served them didn't really exist.

• 25:53Patrick Bet-David?

  Got it. Was that the mindset, or was that the reality?

• 25:57Speaker 00

  That was the reality, because they were so used to, they were, they were just, we were just there. But it was okay with me, I just, I had no problem with that.

• 26:07Patrick Bet-David?

  Interesting, got it. Because at that time, you're not yet Horace Chelsea, you're just a young man working there.

• 26:13Speaker 00

  I just, and I wanted to, and I knew that when I was dreaming about it. And that I was take care of very important people. And one or the other recognizes you, and I, I had an experience of this one. When I worked, the first day I worked actually in the restaurant where I started. There were a couple sitting there, and they saw, of course, my beginning, that my knees were shaking, and so on. And the chairman told me, come here, you're doing a great job, and gave me what, five mark, which was a huge amount of tip at the time.

• 26:47Patrick Bet-David?

  This is what year?

• 26:49Speaker 00

  That was nineteen fifty-four.

• 26:51Patrick Bet-David?

  Okay.

• 26:52Speaker 00

  That was a huge amount of money and so, but the encouragement of that moment.

• 26:57Patrick Bet-David?

  Is what mattered.

• 26:58Speaker 00

  Was traumatic.

• 27:00Patrick Bet-David?

  Unbelievable, just to see that somebody is encouraging you, even though you think you're nervous. Was he somebody, or was he just a businessman?

• 27:07Speaker 00

  I had no idea.

• 27:07Patrick Bet-David?

  You had no idea who it was, so it wasn't a famous person?

• 27:09Speaker 00

  No, no.

• 27:10Patrick Bet-David?

  Was there any famous person that was super complimentary, that left an impression on you when you were younger? Who was the kindest to you?

• 27:17Speaker 00

  Well, well.

• 27:20Speaker 00

  Probably because we're tall, so I'm not quite sure. There was Konrad Adenauer, who was a guest several times there, always with others and of course security around him. But he looked at you and said, "Good morning." He looked at you.

• 27:36Patrick Bet-David?

  Got it.

• 27:37Speaker 00

  And he didn't just pass you by.

• 27:39Patrick Bet-David?

  You existed.

• 27:40Speaker 00

  You actually felt that you existed.

• 27:42Patrick Bet-David?

  Interesting.

• 27:43Speaker 00

  And I found that very encouraging too. And so we all liked him for this very nothing that he looked at and said, "Recognize us." But a huge change in that moment, that particular job too. Again with that M D.

• 28:03Speaker 00

  I, typical German, you learn this work. Once a week you go to a school of your trade. In this case, hotel school, where all the kids from the area came. And after two years there, the teacher asked us to write an S A, what we now think about our business. Going back to work that night,

• 28:28Speaker 00

  I was cleaning a table and I watched the M D, that M D, approaching a very important table. But they were all important. And in that moment, I realized, I had seen it before, I never realized it. The guests on the table were proud that he came to them. He was a very tall man, he worked in tails and they were fantastic.

• 28:51Speaker 00

  And I thought, "Wait a minute, this is a reversal." Why are they, we're the servants. And I thought about that. I had to write an S A that night for that school. And I thought about it, I wrote the S A. And for the first time in my life, I came to the realization, which kind of formed my life too.

• 29:15Speaker 00

  The reason those guests were proud that he came to them, because he had defined himself as a first-class gentleman. And I realized, wait a second, I can define myself, even if I was a dishwasher all my life. I don't have to be a bum. I still can define myself as a first-class gentleman.

• 29:34Patrick Bet-David?

  How does one do that?

• 29:35Speaker 00

  By respecting others, by being honorable, by not going against authority, if you will, by coming to work five minutes early and say maybe five minutes late, later, and say I respect what I'm doing here, by saying good morning to your boss and not hate him, but be thankful that he exists, because otherwise I wouldn't have a job. So I still can define myself and do everything I do a little better than anybody else.

• 30:10Patrick Bet-David?

  As simple as it is, how powerful is that?

• 30:13Speaker 00

  Don't complain about business. It's ludicrous.

• 30:18Speaker 00

  When I started Red's Carlton, I only took the job. Remember, I had a great job. I had golden handcuff. I had everything. In fact, people may heard that worked with me. I was a young star in that company in Hyatt at the time, in charge of sixty-five hotels in the United States for beverage operations and so on. And I left for a dream, for a purpose, to create the finest hotel company in the world. Because they told me you can do what you want, basically operationally. And I went there for that purpose. But I had to ask myself,

• 30:57Speaker 00

  is that purpose good for all concerned? First of all, is it good for the owners? Because, believe it or not, friends, you won't have a job without some owner. That was clear to me. Number two, is it good for every employee? It wouldn't be good for the employee if it wouldn't be good for the owner, because we wouldn't have a job. Is it good for every customer? Is it good for society as a whole? And I question myself, would Gartner prove? Once I have this, can answer that clearly as yes. I cannot compromise it anymore. And now I have to find myself as the person who can do it.

• 31:39Speaker 00

  It is not a matter of just having a vision. That vision has to be of value to all concerned.

• 31:48Patrick Bet-David?

  That makes sense. When you got that call at 23 to go to Houston, was that Hilton or was that Hyatt?

• 31:55Speaker 00

  It was Hotel Corporation of America, which became Sonesta later.

• 31:59Patrick Bet-David?

  Okay.

• 31:59Speaker 00

  And so I went to Houston. Frankly, I didn't stay long.

• 32:04Speaker 00

  Very short there because I was totally new. And when you have cultural beliefs, they're sometimes very stupid. And the first day there, first of all, I lived in a Y, no air conditioning. And I got there late June. I've never experienced heat like that.

• 32:24Patrick Bet-David?

  In Houston?

• 32:25Speaker 00

  In Houston.

• 32:28Speaker 00

  And next door I worked. And the first day I worked as a waiter, actually, I was there a few days. First day I worked as a waiter, I had an order, a fish order.

• 32:40Speaker 00

  And I looked where are the fish knives and the fish forks? I had worked in the finest hotels in the world, mind you.

• 32:47Speaker 00

  And they said, what is that? And I came to a conclusion, I'm working for barbarians. No fish knives, no fish fork. Cannot be. And I live and they live in a situation where human beings shouldn't live with the heat. I thought, I didn't know there was air conditioning.

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• 33:37Speaker 04

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• 34:04Patrick Bet-David?

  And Houston is pretty hot if you're coming from Europe.

• 34:06Speaker 00

  You better believe it.

• 34:07Patrick Bet-David?

  Yes, my wife's from Houston, it's very hot.

• 34:10Speaker 00

  So I called a friend of mine who worked in San Francisco, and I was waiting in a French restaurant. And I said, I'm going back, this is their barbarians. They serve fish without...

• 34:24Speaker 00

  How ridiculous can you be? That shows you how silly we sometimes have beliefs, our beliefs that we set because the culture is, it is sometimes very silly. We have to look into it. So I left there, took the bus to San Francisco, worked in San Francisco, started in a restaurant, but then I worked back in the hotel because I wanted hotels. And worked for Hilton and afterwards joined Hyatt.

• 34:51Patrick Bet-David?

  How long were you at Hilton?

• 34:53Speaker 00

  With Hilton, I was not long there, but then I went to the club and back to Hilton. I was with Hilton for nearly four years.

• 35:00Patrick Bet-David?

  Four years?

• 35:01Speaker 00

  Yeah.

• 35:01Patrick Bet-David?

  What did you learn at Hilton that you took on with your career?

• 35:04Speaker 00

  Well, process of manage of what you do, or the organization.

• 35:11Speaker 00

  Because I worked for a while in catering, selling, how you organized to sell and so on. So I learned, but not traditional service. Because we have kind of all forgotten what is table etiquette and so on. I learned it when I was a kid, believe me, that made a deal, everything had to be 100% correct.

• 35:40Speaker 00

  But in Hilton, it was working and systems. I realized that every effort has to have a process.

• 35:50Speaker 00

  Started learning that, and then I joined Hyatt.

• 35:53Patrick Bet-David?

  Is Hyatt where you became, where you made a name for yourself?

• 35:56Speaker 00

  Yeah.

• 35:57Patrick Bet-David?

  Because Hyatt, is Hyatt where you wrote your first book? Or was it at Hilton?

• 36:01Speaker 00

  No, I, no, I read that after, basically after I retired. After, and the book was written. I became quite good friend with Stephen Covey. And Stephen was urging me to write a book about what we had accomplished with Ritz-Carlton.

• 36:21Patrick Bet-David?

  So this is post-Hyatt?

• 36:23Speaker 00

  Yes.

• 36:23Patrick Bet-David?

  This is at Ritz when you met Stephen Covey? And he said, write a book?

• 36:27Speaker 00

  Yeah.

• 36:27Patrick Bet-David?

  Got it, okay.

• 36:28Speaker 00

  And he told me and I didn't do it. And he kept on telling me, and then one day I was driving home. And he called me and I answered, "Fav, it's Steven." That's how he talked. "You, I'm disappointed, so disappointed in you."

• 36:45Patrick Bet-David?

  He's telling you this?

• 36:46Speaker 00

  Yeah. I said, "Why, Steven? You have still not written your own people, your own people to write your book.

• 36:56Speaker 00

  Promise me you will." And I said, "I promise you." A few months later, he died. And that's when he died, I was so... And he always said, "I want to be the one who writes the foreword."

• 37:08Patrick Bet-David?

  Hmm.

• 37:08Speaker 00

  And he died.

• 37:09Patrick Bet-David?

  Unbelievable.

• 37:09Speaker 00

  And I said, "Steven, I write a book for you now."

• 37:11Patrick Bet-David?

  Wow. Well, I mean, he wrote a book that sold, I don't know how many copies.

• 37:15Speaker 00

  Changed me.

• 37:16Patrick Bet-David?

  Oh, yeah.

• 37:17Speaker 00

  Impacted me.

• 37:17Patrick Bet-David?

  Yeah. Life-changing.

• 37:19Speaker 00

  Oh, no question.

• 37:20Patrick Bet-David?

  Seven Habits, and then he wrote Eight Habit, right? He wrote a book called Eight Habit.

• 37:24Speaker 00

  Yeah, The Family Habit.

• 37:25Patrick Bet-David?

  Yeah. One of a kind. He was very unique. My, uh...

• 37:27Speaker 00

  Unique.

• 37:28Patrick Bet-David?

  Very unique. So, okay, so walk me through when you're at Hyatt, you're making a name for yourself.

• 37:36Speaker 00

  Yeah.

• 37:36Patrick Bet-David?

  Ritz comes and recruits you, and you take your opportunities to risk. What happened there?

• 37:41Speaker 00

  First, and I would like to say that because I would like to impact young people in the conversation. When you come to my age, you want to impact.

• 37:49Patrick Bet-David?

  Sure, yeah.

• 37:50Speaker 00

  When I worked for Hyatt, I was food and beverage director. That means I was in charge of the food and beverage operation of the hotel in Chicago. A year and a half later, I got a call from Mr. Freund, who was the president of Hyatt at the time, and said, "Horst, sit down. We have something wonderful for you. You have done a great job with your European flair and all those things. We have what is maybe the best hotel in the company, and you're going to be general manager." This is a moment, a dream moment, the impossible moment, a moment that you will never accomplish, but dream from. And here he said, "You're the general manager of the finest hotel we have." And I said, "I won't take it."

• 38:36Speaker 00

  And he said, you're not leaving the company. I said, no, I'm not leaving the company. Because I want to be rooms manager first. I never was rooms manager.

• 38:43Patrick Bet-David?

  Stop it.

• 38:44Speaker 00

  Yeah. And he said, we're giving you rooms manager. And I said, yes, but I cannot be the best general manager in the company unless I have been rooms manager.

• 38:52Patrick Bet-David?

  Wow, what a message.

• 38:55Speaker 00

  And he said, I, I, I'm coming, he, he was in San Francisco, I'm coming to Chicago and talk to you. You're leaving the company. I said, no. He came and said, no, I want to be rooms manager. He said, we have the finest hotel for you. I said, make me rooms manager, give me the worst hotel. A year later, he called me, he made me rooms manager. A year later, he called me and said, remember what you said. Yeah, I want to be rooms manager. I said, no, no. You said you want to have the worst hotel. We got it.

• 39:26Speaker 00

  And I got Pittsburgh, which was a dump.

• 39:32Speaker 00

  A real dump.

• 39:33Patrick Bet-David?

  What year is this?

• 39:34Speaker 00

  That is nineteen sixty, nineteen, nineteen seventy-four.

• 39:39Patrick Bet-David?

  Okay.

• 39:40Speaker 00

  So I'm, I moved to Pittsburgh. And two and a half years later, I was promoted to a larger hotel in Detroit. And a year later, I was promoted to regional vice president over ten hotels. And two years later, I was promoted to corporate vice president. And to Chicago. And that wasn't good, because when you're corporate vice president, you're one of a bunch of bums. They're all vice presidents. If you're regional, you're the king in your region, you know, but, but still.

• 40:11Patrick Bet-David?

  Leader of bums.

• 40:12Speaker 00

  And still, it was a promotion. And so I moved to Chicago at that time. And then I got that call after I was there for nearly three years.

• 40:22Patrick Bet-David?

  To be.

• 40:24Speaker 00

  To call that there is a job. We, what they said, we, we are building two hotels. A Holiday Inn and, but we cannot come to agreement. We want, somebody recommended that we create our own brand.

• 40:39Patrick Bet-David?

  Mm-hmm.

• 40:40Speaker 00

  And you were recommended to run that brand.

• 40:42Patrick Bet-David?

  Who recommended you?

• 40:44Speaker 00

  Somebody I had that had worked, a vice president who used to be, had worked in, in Hyatt.

• 40:49Patrick Bet-David?

  At Hyatt?

• 40:50Speaker 00

  Yeah.

• 40:50Patrick Bet-David?

  If you would have stayed with Hyatt, who would you have become?

• 40:54Speaker 00

  Probably CEO.

• 40:57Patrick Bet-David?

  You would have become the CEO of the company if you would have stayed with Hyatt. That was the trajectory. Everybody knew. Okay, it was obvious.

• 41:03Speaker 00

  Yeah, oh yeah.

• 41:04Patrick Bet-David?

  Okay, so why take this position, this opportunity that comes along?

• 41:11Speaker 00

  Because at one point, when I asked them, "What would you do with your hotels?" And they said, "Operations that would be up to you." And I started dreaming. And I saw a purpose. And it started to control me. And I said to my wife, "I will make this the best hotel company in the world." If they let me really operation, do what I want to do. I saw... Because the leaders, mind you, there were individual hotels that were different. But the leaders of company leaders in hotel business was hired. Hilton International, Western and so on, Intercontinental.

• 41:55Speaker 00

  And they were basically all doing the same thing. And I thought, "I wouldn't compete with them. I just would go over them and pull the best out of them." And mix a little bit more. Do not get away from the relaxed service element of America. But put a little bit more elegance and customer attention into it.

• 42:18Speaker 00

  And it seemed to me, when I listened to other companies, not hotel companies, there seems to be a lack of understanding that it's all about human beings. There are two groups of human beings when you're in business. The one group is your customer. The other group is your employees. So how do you... And both groups have emotions, thoughts, wishes, dreams.

• 42:44Speaker 00

  Yet they're not taken into account by those that run companies. I have to take into account, I have to know what is my customer's expectation from my product? What would they expect from me? And then I have to know. As a good manager, I have to create processes, system and controls. So I deliver the expectation of the customer, hopefully superior to my competition. But it only can be superior if I'm also a leader, not just a manager. And lead my people to want to do that.

• 43:24Speaker 00

  This can only be done if my people are working for the same purpose. There's purpose. And I, I still believe, I said it again. It's not a job that's the biggest gift a company can give you. The biggest thing a company can give you is purpose. Purpose and belonging.

• 43:45Patrick Bet-David?

  You felt you didn't have that at Hyatt?

• 43:47Speaker 00

  I, I felt that wasn't managed well. We still just hired people. And then some then decided that employee is not good. Wait a minute. If that employee is not good, why did I hire him?

• 44:09Speaker 00

  It's leadership.

• 44:11Speaker 00

  Either I selected the right employee, or I oriented wrong, or I trained wrong, or I have the wrong work environment. That, so it's not the employee, it's me. And that acceptance wasn't, was maybe there in some people, but it wasn't organized. And I knew if I organized my selection, my orientation, my training and my sustaining the knowledge and create the right work environment, I could beat anybody. I believed, I still believe that. I, I, sorry. Sorry, anybody, everybody thinks I'm very arrogant now.

• 44:54Speaker 00

  I don't, I think I could take any company in the world, make it the best company in the world.

• 44:57Patrick Bet-David?

  You still believe that today?

• 44:59Speaker 00

  Yes, absolutely.

• 45:00Patrick Bet-David?

  Based on what premise?

• 45:01Speaker 00

  Based on the premise that I would offer purpose, that I would have, be very careful in selecting employees and not just hire people. Come, come on, people are not selected, they're hired. And I would orient them to the job. I opened every single Ritz-Carlton hotel and every Capella hotel myself. I didn't go there to drink champagne. Well, I did a little bit too, but I went there to orient the employees as to who we are and welcome them and role-playing to them how we deal with customers and train them.

• 45:40Speaker 00

  So I was connected to the end, so I'm mature. But what did I train? I trained what I knew the customer wanted, not what I want. Not what I want. Come on, I have been on a board with, on many boards, and most CEOs, nearly all,

• 45:58Speaker 00

  full of egos, full of emotions, full of unsecurities, like we are as human beings. But has no respect that the employees and the customer has the same thing. What does a customer really want from you? What do they really want? I spoke to classic hotels of America not long ago.

• 46:20Speaker 00

  And before me was a speaker who said, "Everything is new, forget everything. Everything is technology, technology, everything is new, every... Twenty times, forget all you know. If you don't, if you're not in technology today, you are lost." I was the next speaker. And I said, "Nothing is new." Because you see, 5,000 years ago, human beings wanted to be respected. And this was true this morning, and in the morning tomorrow, and in 5,000 years from now. And if my technology helps you, my customer,

• 46:54Speaker 00

  to tell you that I respect you, and at the same time care for you, and do my best for you, that's what it's all about. It's caring, and you guess what? There are studies, and American consumers study, that's not very old, where the consumer, eighty percent of consumers says, "I deal with you if you care for me, even if I could buy the same product next door for less." So on the end, in organizations, the respect for an organization is how I care for people. And that, because that creates trust. People talk about loyal customers. Well, what is a loyal customer? A loyal customer is somebody who trusts you.

• 47:38Speaker 00

  They're not trusting you because of the product. They're trusting you because how you treated them, that you respected them. And, and that is not, seems to be not understood.

• 47:52Speaker 00

  People work on the product and they do their best, they work hard. But I have to work making sure that my customer knows I respect them.

• 48:04Patrick Bet-David?

  So, you know, when you think about three things, product, service, price. In your eyes, in order, what would you put first? Product, service, price?

• 48:15Speaker 00

  Service.

• 48:15Patrick Bet-David?

  Service first, what's second?

• 48:17Speaker 00

  Product.

• 48:17Patrick Bet-David?

  Product, and then price is last, because if you can get the first two, they'll pay anything for it.

• 48:21Speaker 00

  If I get the first, I get more. Listen, good housekeeping was a magazine that developed value of product. They voted us, Ritz-Carlton, in the early years as best value. We were the most expensive, but we were the best value.

• 48:37Patrick Bet-David?

  Wow.

• 48:38Speaker 00

  You know, that's the point, that's what I have, and the best value. Look, in our first hotel, I never forget it because it even shocked me. We put the chandelier up, as we were finishing it up, in the elevator foyer, this chandelier went up. And I realized there's a $28,000 chandelier hanging there. No guest ever commented on this darn chandelier.

• 49:09Speaker 00

  Nor did I do on the $200,000 Oriental rug, nor on all the marble. We both hold mountains in Italy. Nobody commented, but they commented how we respected them, how we treated them, how we were friendly, how we responded, that we cared.

• 49:27Patrick Bet-David?

  So could you have gotten away with a $800 rug and a $600 chandelier? You think you could have gotten away with it?

• 49:33Speaker 00

  Yeah, yeah, look at, look at, that was.

• 49:36Patrick Bet-David?

  Because I see your Capella Hotel, your Capella Hotels that you build, you know, the.

• 49:40Speaker 00

  It's not chandeliers, oh yeah, it's still marble.

• 49:42Patrick Bet-David?

  It's beautiful, yeah.

• 49:43Speaker 00

  Oh, absolutely, oh, absolutely. But, but the key thing that we did, Capella, only 100 rooms, so I can individualize service. I couldn't individually service in a 600-room Ritz-Carlton, because I had 450 check-ins today, 500 check-out. But in a 100-room Capella with only individual and not conventions, I can call you before you come and say, "We are coming to Singapore, what can I do for you?" It's all about you. As long as it's more legal and ethical, I'll do it. There's no check-in time and check-out time. We will have a room for you when you arrive. You see, it works. We figured out how that works.

• 50:27Patrick Bet-David?

  I saw you explain somewhere where you said at Ritz, customer would be unhappy if check-in took more than four minutes, right? At Capella, you brought it down to 20 seconds.

• 50:36Speaker 00

  Yes. In fact, that's the change of the human being. We knew after four minutes they will get angry. Today it's 20 seconds.

• 50:49Speaker 00

  The timeliness, we better know that as businesses, timeliness, expectations have become dramatic.

• 50:55Patrick Bet-David?

  True.

• 50:56Speaker 00

  Including responses to emails or so on. And it is, we better know that. There are two things that are greatly different. And that is timeliness and individualization. The millennials say, "Do it my way." Well, there you are again. What business has ever met a study what the millennials really want? Shouldn't we, if we have a business, shouldn't I know what my new customer's expectation is from me? And one thing expectation of millennials is, "Do it my way." Individualize to me. The difference, but look, if I would go to McDonald's, I would say, "I take a number one."

• 51:41Speaker 00

  The millennials says a number one, but not to make the two slices of pickles. Individualization. And if I run any business, I have to understand that there is individualization is expected.

• 51:53Patrick Bet-David?

  Was that not the case before, or that was always the case?

• 51:55Speaker 00

  Oh, much less so, much less.

• 51:57Patrick Bet-David?

  Much less so 40 years ago?

• 51:58Speaker 00

  Much less.

• 51:59Patrick Bet-David?

  Really? So you just expect that whatever you sold, I accept it as a customer?

• 52:02Speaker 00

  That's it, yeah.

• 52:04Patrick Bet-David?

  So how do you differentiate between the speaker that came before you, where he says, "No, no, no." What principles are evergreen? And what principles are changing? What's changing that you have to adapt to?

• 52:19Speaker 00

  The way it is done changes. The way it is done. And of course, customers' expectations will change. I'll tell you a funny story on the customer expectation. When I opened the first Ritz card, at that time, the first plastic card keys came out, which today is norm. Well, this was nearly unheard of. They called them wing cards at the time. And I said, "Since this is new, we do that."

• 52:44Patrick Bet-David?

  You were the first.

• 52:45Speaker 00

  I was very early. This wing card. And it was, it's a good security piece. But our guest checked in and said, "You're a luxury hotel, they give me a plastic piece?"

• 52:54Patrick Bet-David?

  Wow.

• 52:56Speaker 00

  So six months later, we changed the locks. Because this silly thing was overwhelming to customers that I would give them a plastic...

• 53:05Patrick Bet-David?

  Wow, so they saw it as cheap, not as a...

• 53:09Speaker 00

  But three years later, they said, "You give me a hard key? That is very dangerous. What if I lose and they come into my room?" So we changed locks again. Yes, you have to go with the customer. But on the end, it's how I do it. It's how they feel what I'm doing. In the end, I have to tell them I care for you. And by that action, they don't know that I care. I just responded. But by me saying friendly, instead of saying, "Hi," "Hey," saying, "Good morning, sir, how are you today?" And tell you with my eyes, "I am here for you. I respect you."

• 53:52Patrick Bet-David?

  Amazing. So here's a question I got for you. You go from keys... To card, to what is this? I want a key, back to key, back to card three years later. Question for you is, who do you listen to? How do you know the right move is to go back to keys? And the right move is to go back to cards? Is it the complaining customer? Is it majority? Is it employees? What patterns makes you, help you make that decision?

• 54:19Speaker 00

  You don't listen to your mother-in-law. That's a study of one. A complaint is also a study of one. You make customer surveys thoroughly ongoing. You have to understand what the market wants. It's not the individual. And that's a bad thing companies do, particularly entrepreneur owners, the billionaire owners. His friend tells him and then he comes and change it all. Because my friend told me. That's a study of one that you just don't respond to. You have to understand what the market as a whole wants.

• 54:52Patrick Bet-David?

  How do you do that?

• 54:53Speaker 00

  By making customer studies. We, of course, it was easy in hotel. We had a, I had a customer analysis done for, I knew every month in every hotel in the world, what the customer satisfaction was, what the employee satisfaction is, what my economics are and what my future indicators are. That's the only thing I need to know. The rest I delegate. The rest I delegate. But if the customer satisfaction intent to return was not there, we then could dig in why into the various studies. And we analyzed if there are in every hotel the same trend.

• 55:35Patrick Bet-David?

  Got it.

• 55:35Speaker 00

  So we know what is there. We then tweak constantly. You tweak your, so that you keep on serving the customer the way the customer wants to be served.

• 55:45Patrick Bet-David?

  Like, what is AI doing right now to the hotel and hospitality business? That some people are using that you'll say, I'll never do? And what is AI doing to the hospitality business that you love?

• 55:58Speaker 00

  Well, I...

• 56:00Speaker 00

  I'm not there. I mean, I'm generationally cannot quite accept it AI yet. Oh, but I'm saying I work with a technical group and we are leader in the technology that we that has created for hotels.

• 56:15Patrick Bet-David?

  That's Capella.

• 56:16Speaker 00

  No, that is the hotel company. I'm working with a group KYC that puts technologies into into hotel. So we so we know everything and we are partially AI. For instance, in AI, I have I can do everything, but I.

• 56:36Speaker 00

  What is happening because of the AI is.

• 56:41Speaker 00

  Nearly every brand, larger brand, is becoming a commodity now. Means you check in with your iPhone, that's what you do. You check in, you call the elevator, you go into your room, you will check out and so on. That means it is a commodity that offers shelters, sleep. Hospitality cannot be replaced by AI. I still have to have a human being. I would still have, if I was running a hotel, I would do that. But I would have somebody on the front door that says, welcome, and walk to you to the elevator and say, I'm here for you. You respected here and not just the AI.

• 57:25Speaker 00

  But but it's driven, of course, the company has to make a three month report to Wall Street. So have those people staying in front of, but that's the end of hospitality. But that's why small hotels who do it will be the leader of excellence.

• 57:43Patrick Bet-David?

  Small hotels?

• 57:44Speaker 00

  That do it, yeah.

• 57:45Patrick Bet-David?

  Because they're able to control more of it?

• 57:47Speaker 00

  They will control more often and they will and they will be successful because of their hospitality and not just because of shelter.

• 57:55Patrick Bet-David?

  So then scale is harder today, the bigger the company is, because you can't maintain customer service.

• 58:00Speaker 00

  You you could if you were if you're willing to spend the money for it.

• 58:03Patrick Bet-David?

  On what?

• 58:04Speaker 00

  But but large companies don't because they're they're pushed by by shareholders to make a little more profit.

• 58:09Patrick Bet-David?

  Who's the bigger company today, like, you know, that you still look at and say, wow, good for them? Big companies still maintaining customer service?

• 58:20Speaker 00

  Oberch is pretty big, becoming big, but there's still attention.

• 58:26Speaker 00

  Rosewood are still paying attention to customers somewhat. And but you know, you see. Most big names that you know, and I will not repeat the names, are becoming commodities very fast.

• 58:38Patrick Bet-David?

  Do you uh uh when you when you sold, when you stepped away from Ritz, what year was that when you stepped away from Ritz?

• 58:45Speaker 00

  And and well, I I have finished my work with Ritz in two thousand two.

• 58:51Patrick Bet-David?

  Two thousand two?

• 58:52Speaker 00

  Yeah.

• 58:52Patrick Bet-David?

  And you went to Ritz what year?

• 58:55Speaker 00

  Uh nineteen seventy four.

• 58:57Patrick Bet-David?

  From seventy four to two thousand two?

• 59:00Speaker 00

  End of seventy three, yeah.

• 59:02Patrick Bet-David?

  The lady that was here, she said something, she said um she said uh uh. Ritz went from in the mid nine in nineteen ninety one having employee turnover at around mid fifty percent. And then by the time it was done, it was around low twenty percent. That's the stats that she's given. Eighteen percent, right. And.

• 59:25Speaker 00

  And the industry was a hundred twenty.

• 59:27Patrick Bet-David?

  Right, I mean, it's it's a it's a three sixty five, twenty four seven. You guys are always open, it's you're never closed. What did you do to, you know, lower retention as many increase retention as much as you did?

• 59:39Speaker 00

  We we touched on it. We we offered purpose.

• 59:44Patrick Bet-David?

  Outside of that, though, outside of that, what else did you do?

• 59:47Speaker 00

  Yeah, in the selection, we were very careful. We were very careful. We had a selection system. We were very careful and we established standards already during the interview. Because, you know, people don't seem to get that. Most most what you want, all of us, from an employee is the right behavior. But but behavioral analysts are working with the University of Colorado and University of Frankfurt on that. Behavioral analysts will tell you behavior cannot be taught after somebody is sixteen years old.

• 1:00:17Patrick Bet-David?

  Wow.

• 1:00:18Speaker 00

  Ah, yeah. How? Unless unless there's a significant emotional event in your life.

• 1:00:24Patrick Bet-David?

  Makes sense.

• 1:00:26Speaker 00

  An interviewing for a job is a significant emotional event. And what we do, we just ask questions, rather than establishing standards right there, behavioral standards. And say, Patrick, you know, we have an attitude in our hotel, in our company, we really, we are petty about it. We are very friendly to every guest. In fact, within ten feet, we look them in the eye and say, friendly, good morning. Can you do that? What will you say? You will say, yes. Sure, yes. And now, well, wait a minute, Patrick, I'm very serious about that. You will say, yes, again. I just established a new behavior in you, for your benefit, to be successful. Timeliness is very important to us.

• 1:01:07Speaker 00

  So I will start trying to, but I do that and then orientation, first day of work, which every company does wrong, period.

• 1:01:19Speaker 00

  We didn't do that. I went to do the orientation. I role-played how to say hello in front of every new, in every new hotel and every takeover. Teach me. I was the one. Teach me. How do I say hello? And said, okay, so you're a guest. Here's a guest coming, within ten feet. Ten feet is the essential moment, but within ten feet, they make a decision about you, us, you make about them. Society lies about those things. You should look, say, baloney. We're human beings. We cannot help it. We make a decision about the other person. So what decision do I want you to make about us, about me?

• 1:01:59Speaker 00

  I want you to make a positive one. That's why we wear the right uniform. That's why we groom right. And that's why we look them in the eye, no matter what we're doing, within feet. It's a non-negotiable. That's what we do. We look them in the eye and said, good morning, sir, or good morning, ma'am. How are you today? Now, watch me. Good morning, sir. Or good morning, ma'am. How are you today? Welcome. And you're role-playing this with them? I role-played that. And I role-played how to talk to each other as employees. How do you do that? Well, if I walk by, if I, we're working together and I walk, I want, I said, first of all, do you want a good work environment? Yes. Oh, yes.

• 1:02:40Speaker 00

  So, okay, now, Patrick, the people in the environment are responsible for the work environment. So I walk, I want a good work environment. I walk by you and I go, say, good morning, Patrick, how are you today? And you make a, sir. But tomorrow morning I do it again. And pretty soon you will say, "Good morning, how are you?"

• 1:03:01Patrick Bet-David?

  Infectious.

• 1:03:01Speaker 00

  I am responsible. I am responsible for my work environment. Have you heard me all? And everybody will say, "Yes," in the room.

• 1:03:09Speaker 00

  The day of orientation is a very significant day. You see, I interview you.

• 1:03:17Speaker 00

  I really want you.

• 1:03:18Patrick Bet-David?

  Okay.

• 1:03:18Speaker 00

  The job is open. But our orientation day is not for ten days. So I'm gonna say, "Patrick, I'm gonna put you on the payroll, but you cannot show up." You cannot... But if you show up, you're paid for the next ten days. But that's the day you start working.

• 1:03:36Speaker 00

  Because I want you to have a significant emotional event when we do orientation.

• 1:03:39Patrick Bet-David?

  Stop it.

• 1:03:40Speaker 00

  Yeah.

• 1:03:41Patrick Bet-David?

  So you hire me.

• 1:03:42Speaker 00

  Yes.

• 1:03:43Patrick Bet-David?

  You pay me those ten days.

• 1:03:44Speaker 00

  Yes.

• 1:03:45Patrick Bet-David?

  And even the orientation's not in ten days.

• 1:03:47Speaker 00

  That's right.

• 1:03:48Patrick Bet-David?

  Why are you doing that?

• 1:03:49Speaker 00

  Because if I let you before without having the proper orientation, I didn't use the significant emotion then to teach you the right behavior.

• 1:03:57Patrick Bet-David?

  And what is the right behavior you're trying to teach me? To pay me ten days that I'm not working for you?

• 1:04:01Speaker 00

  I'm repeating the things I told you during the interviewing process. The orientation is a day when we teach you again, here is how we behave. Here is how the guest is important. Here is how we treat each other. You are part of something. Let me put it this way.

• 1:04:18Speaker 00

  How are people being oriented? I can tell you. If you worked somewhere, I can tell you how you were oriented. Everybody orients like that. If you come to work and the boss tells you the rules of the company. Here's what we do and here's what we don't do. And then you get a handbook with more rules. And then you get insurance papers and all kinds of papers. And you go through all this work. And that's the day of orientation. First day of work. And when you finish with that, the boss makes his pathetic team speech. "We're a team here, yeah." Without giving purpose.

• 1:05:00Speaker 00

  A team is a group of people who work toward a common objective.

• 1:05:05Patrick Bet-David?

  Sure.

• 1:05:05Speaker 00

  Not given, just "we're a team here." And what's next?

• 1:05:11Speaker 00

  Oh, now Bill, the new waiter, work with Fred. He's here nine months and he knows the ropes. Somehow you're in rope business here now. You turn him over to Fred. And underway to the kitchen, Fred tells Bill the new waiter, this company is no good. That is day of orientation. Instead of the day orientation saying, here is who we are. You're now part of us. And here's how we, he's our customers. And we are happy when they're here, we respect them. Here's how we show them respect. By saying welcome, by responding to them, by looking them in the eye, by caring for them. That's our, that's our part.

• 1:05:56Speaker 00

  You, you, Patrick, we have to give human beings purpose. But we have to at the same time, tell them the motive of our purpose. What, what did Adam Smith say? Wait a minute, 300 years ago.

• 1:06:11Patrick Bet-David?

  Wealth of Nations?

• 1:06:13Speaker 00

  Yeah, but he wrote another book about the behavior of the human being and he said, impossible that people can buy into orders and direction.

• 1:06:22Patrick Bet-David?

  Okay.

• 1:06:23Speaker 00

  They can only buy into objective and motive. What, what, on what we do, we give orders and direction.

• 1:06:29Patrick Bet-David?

  Hmm.

• 1:06:30Speaker 00

  Instead of giving purpose and motive. That is, the, the millennials say, what's in it for me?

• 1:06:39Patrick Bet-David?

  Hmm.

• 1:06:40Speaker 00

  Well, tell them, if we accomplish that, here's what, you will make, have more opportunities. You will make more money, you will be respected, you will be honored. That's what's in it for me, for you. And that's why we have this beautiful purpose. And that's why we come to work. We do not come to work for the function. We're not chairs.

• 1:06:58Patrick Bet-David?

  How do you teach, um? How do you teach, and she talked about it here as well that day, how do you teach employees to confront each other? What is the format of confronting? Management to employees, employees to employees? How do you teach me to do it?

• 1:07:14Speaker 00

  Yeah. Well, first of all, turn it around. We had in our pockets first-class cards. And everybody was encouraged to use that card. If they see anybody doing something good, a fellow worker, write down first class and give it to them. Or when I walked on town, people gave me first-class cards. So that's the opposite. That is right away establishing the environment that you're here to deal with your fellow workers in a positive mode.

• 1:07:47Patrick Bet-David?

  And then what happens to more first-class cards I get?

• 1:07:50Speaker 00

  No, you just collected a first card. I have 20 first-class cards.

• 1:07:54Patrick Bet-David?

  How do you recognize the person that got the most first-class cards in a month?

• 1:07:59Speaker 00

  Monthly, every department recommends an employee of the month. That employee, all employees of the month have a dinner. One of them gets employee of the month total. For each department, but one gets for the hotel.

• 1:08:17Patrick Bet-David?

  Got it.

• 1:08:18Speaker 00

  The 12 in a year, that's one in a month. One of those 12 becomes employee of the year. He becomes a vacation, paid vacation with his spouse. And cash.

• 1:08:33Patrick Bet-David?

  Paid vacation for spouse, with spouse. You find them a spouse?

• 1:08:38Speaker 00

  And some cash.

• 1:08:39Patrick Bet-David?

  You don't find them a spouse. I don't think you're in that business. That's a different business, horse. You don't want to say that. You'll attract a lot of different customers.

• 1:08:46Speaker 00

  But they tell me they make a lot of money.

• 1:08:48Patrick Bet-David?

  Make a lot of money. Yeah, you can do like Only Ritz. If you did like something called Only Ritz, not Only Fans, it would be a different business model you'd be in.

• 1:09:16Speaker 05

  The future looks bright.

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• 1:10:19Patrick Bet-David?

  So let's say in this, so you, so I get first-class cards, but still, because when you're talking about this, the reality of running a company is you're not hiring everybody, right? You have direct reports who have direct reports, and you have a chief HR officer that the interviews come through. How are you teaching me to hire rich-type of people to the company? What am I looking for? You're not doing 100% the interviews. How do you teach me?

• 1:10:46Speaker 00

  Oh, well, because I, when you came in, you were taught, and everybody understands the very minimum. Everybody, everybody goes through orientation, and managers go through a special orientation. I gave every manager a leadership session. The way our teaching worked beautifully, because we were, mind you, we started with no hotel. So every hotel we had was either new or take over.

• 1:11:13Patrick Bet-David?

  I got it. So you had an advantage.

• 1:11:16Speaker 00

  I had an advantage. I opened every hotel.

• 1:11:18Patrick Bet-David?

  I got it.

• 1:11:19Speaker 00

  I also knew, all employees knew me. It wasn't them.

• 1:11:23Patrick Bet-David?

  What a point.

• 1:11:24Speaker 00

  It wasn't them in the corporate office. You have to overcome the them. Because if I don't know you up there in my insecurity, I will blame you what is wrong up there. Because if I don't make it, if I can't live up by the rules, it's your fault. They have, you know, but they knew me. That's why. The big thing that happened in Red Carden is the empowerment piece, which was a nuclear explosion in all businesses. When I said I empower every employee to make a decision up to $2,000.

• 1:12:06Speaker 00

  If a guest has it. But I could do that. First of all, we did that very carefully. I didn't just say it. We taught. I thought about it for a very long time. It was an economic decision. I didn't want to lose a customer because a customer that leaves unhappy becomes a terrorist against your company. You cannot afford that, really. I knew from the behavioral analyst that 96% of complaints is people that want to get rid of their frustration. We learned, I thought they complain on the front desk or the concierge. No, they don't. They complain to anybody who listens. Anybody listens. And if you don't accept it.

• 1:12:49Speaker 00

  So I had to make sure that a busboy will accept as his TV, the TV that didn't work. Forgive me. And so I didn't want customers to run out there and be unhappy. My guest is well-connected. He calls his travel agency. It was no good. His travel agency is part of a consortium, 500 travel agencies. So I want to be sure that everybody leaves as an ambassador.

• 1:13:18Speaker 00

  So I had to teach our employees how to handle any complaint. And say at the same time, I trust you. In fact, you can make a decision up to $2,000. To keep that customer.

• 1:13:31Patrick Bet-David?

  How much did that end up happening per month? Like at its peak, how many people use the full $2,000? At its peak?

• 1:13:38Speaker 00

  In the last three years, that was the ones.

• 1:13:41Patrick Bet-David?

  Oh, wow.

• 1:13:42Speaker 00

  The rest was the busboy saying, did you have a nice stay with us? No, my TV didn't work. Please forgive me about my TV. I will buy you breakfast. And I guess the complainer now is embarrassed that he complained. And leaves as an ambassador. Rather than so, but we certified every employee how to do it.

• 1:14:03Patrick Bet-David?

  So were you employee number one?

• 1:14:06Speaker 00

  Pardon me?

• 1:14:07Patrick Bet-David?

  Were you employee number one in Ritz?

• 1:14:08Speaker 00

  Yeah, sure.

• 1:14:09Patrick Bet-David?

  So you're the founder, president and COO of the company, right? The co-founder, member of the Ritz. So from one employee to 47,000 employees, you've been part of that entire process.

• 1:14:19Speaker 00

  When I left, we had 25,000.

• 1:14:21Patrick Bet-David?

  25,000 when you left. I think today they're at, I don't know what the number is, that's higher number. But from one to 25, that's 100% you. Question for you. Did you guys buy other hotels or no?

• 1:14:32Speaker 00

  Yeah, we talk about, yeah, but wait a minute, we didn't own hotels. We managed hotels.

• 1:14:36Patrick Bet-David?

  Right, so, so for instance.

• 1:14:37Speaker 00

  We talk owner, owner, for example, we talk about hotel in New York. Consequently, I inherited a union.

• 1:14:45Patrick Bet-David?

  Got it.

• 1:14:46Speaker 00

  None of our, none of my hotels have opened San Francisco, no. Union was picking us for three years, but it never became union.

• 1:14:55Patrick Bet-David?

  So when you took, when you're, so you're taking opera, like for example, two properties are opening up here in Pompano. One is Ritz, private residence. One is Waldorf Astoria. I want to look at a couple of them and they'll say Waldorf is going to be managing this property for 30 years.

• 1:15:08Speaker 00

  Yeah.

• 1:15:08Patrick Bet-David?

  So you, you were managing those hotels, servicing those hotels, okay.

• 1:15:13Speaker 00

  But, but we insisted, we wouldn't have written a contract anymore unless you sign 50 years.

• 1:15:19Patrick Bet-David?

  50 years to you guys.

• 1:15:22Speaker 00

  Yeah.

• 1:15:22Patrick Bet-David?

  And what is the business model? How do you get paid?

• 1:15:24Speaker 00

  I get, I get a percentage of sales.

• 1:15:27Patrick Bet-David?

  Whatever sale they make, you make, is it profit or is it rev?

• 1:15:31Speaker 00

  I make off sales. If you own the hotel and the sales hundred million, I get three million.

• 1:15:39Patrick Bet-David?

  Got it.

• 1:15:40Speaker 00

  And you may be losing money to operation.

• 1:15:42Patrick Bet-David?

  So no matter what, you're making your three million. So it's more like a consulting firm.

• 1:15:45Speaker 00

  Yes, in a way, yes, but I also have an incentive after you make that service. I am sharing ten percent of whatever in the profit after.

• 1:15:58Patrick Bet-David?

  Got it.

• 1:15:59Speaker 00

  So I have an incentive to make a profit.

• 1:16:01Patrick Bet-David?

  So if I'm doing a hundred million, no matter what I do, I gotta pay three million on my revenue that goes to you. What is my, what is your incentive to make my hundred million, two hundred million?

• 1:16:10Speaker 00

  Well, I get, I get an incentive on anything over a certain profit.

• 1:16:15Patrick Bet-David?

  Is it an accelerator? Like, does it get really bigger?

• 1:16:18Speaker 00

  No, no, it stays.

• 1:16:19Patrick Bet-David?

  Fairly at the three percent number.

• 1:16:21Speaker 00

  Yeah, but, but at the same time, I, I, I drive sales up, which I get my three percent on the, on the sales. I drive the rate up, I drive the income up, and of course, I drive the profit up and the profit. Now, now, there is an exit clause for you, the owner. That means we established in the beginning, who would be my competition? Who are the three best hotels in town? If I don't, if I'm not within five percent at least, what they do, you can exit me. You can throw me out.

• 1:16:53Patrick Bet-David?

  That's in the contract.

• 1:16:54Speaker 00

  Oh, yeah, oh, yeah.

• 1:16:55Patrick Bet-David?

  But they also want the name Ritz Carlton on the, on the property, right? They don't, they don't want to give us the Ritz Carlton.

• 1:17:00Speaker 00

  It's not only, it's not only hotel, there's probably most likely.

• 1:17:02Patrick Bet-David?

  Yeah, restaurant, all the other stuff that's benefiting as well. At the peak, what was the revenue of all the hotels you guys were managing? At the peak, under your watch?

• 1:17:11Speaker 00

  Well, world, world, worldwide, we were close to two billion dollars.

• 1:17:17Patrick Bet-David?

  Two billion.

• 1:17:18Speaker 00

  Including clubs and stuff that we had, everything included, yeah.

• 1:17:21Patrick Bet-David?

  Got it. So two billion, sixty million goes to you guys.

• 1:17:24Speaker 00

  Yeah.

• 1:17:25Patrick Bet-David?

  Got it. That's a pretty nice revenue going to you.

• 1:17:27Speaker 00

  Yeah.

• 1:17:27Patrick Bet-David?

  So you made some real good money.

• 1:17:29Speaker 00

  Yeah.

• 1:17:29Patrick Bet-David?

  Yeah.

• 1:17:30Speaker 00

  Yeah.

• 1:17:30Patrick Bet-David?

  That's great. So, but going back to it, so. You would come in and your job was to inject the spirit and your philosophy to the way we managed our hotels.

• 1:17:41Speaker 00

  Sure.

• 1:17:41Patrick Bet-David?

  That's what you did.

• 1:17:42Speaker 00

  Sure.

• 1:17:42Patrick Bet-David?

  Okay, so.

• 1:17:43Speaker 00

  And the processes, make sure the process.

• 1:17:45Patrick Bet-David?

  Sure, and I love that. And by the way, the lady said the following, she says, you guys have this thing, and by the way, correct me if I'm wrong. I'm just giving you what she said. She said that they did, you guys did an engagement study to identify which employees fell where. You guys found that that you call them superstars or invincibles were 32% of employees who were energized and committed to do their work. Then 51% were neutral. You guys call them just there. They're just there, and you can correct me here. They showed up and do what is expected, but little more. And the last one was cave, which was around 17%. This is constantly against virtually everything. This is what the lady.

• 1:18:23Speaker 00

  I never heard about that.

• 1:18:25Patrick Bet-David?

  So this is not you.

• 1:18:26Speaker 00

  That wasn't me.

• 1:18:27Patrick Bet-David?

  What do you think about this analysis?

• 1:18:28Speaker 00

  It's ridiculous.

• 1:18:29Patrick Bet-David?

  Tell me why it's ridiculous.

• 1:18:32Patrick Bet-David?

  This is why I came to the source. I want to know what you think.

• 1:18:35Speaker 00

  Yeah, okay.

• 1:18:38Patrick Bet-David?

  Rob, are you tracking? Rob, were you in that meeting? Am I giving numbers that were numbers that were given to us? So please continue.

• 1:18:45Speaker 00

  It's nearly pathetic. Please forgive me.

• 1:18:52Speaker 00

  I mean,

• 1:18:55Speaker 00

  please forgive me.

• 1:18:55Patrick Bet-David?

  Tell me why, though. Tell me why it's pathetic.

• 1:18:57Speaker 00

  Because that means everything is wrong with the selection process already. If you hired those poor percentages, then you better start selecting, stop, get somebody to help you selecting employees.

• 1:19:12Patrick Bet-David?

  But you said your retention hit 19%.

• 1:19:14Speaker 00

  Between 18 and 20% was the retention.

• 1:19:17Patrick Bet-David?

  You fired or lost 18 or 19% of them.

• 1:19:20Speaker 00

  Yeah.

• 1:19:20Patrick Bet-David?

  Yeah.

• 1:19:22Speaker 00

  You want to have 10%, because you want to renew a little bit.

• 1:19:25Patrick Bet-David?

  So why did you lose 18 or 19%?

• 1:19:28Speaker 00

  Oh, but partially because people moved and/or partially because, or we did make mistakes. But when I make a mistake, I have this, now I have to, ah. This employee really didn't work out. So let's look where we made our mistake and tweak our process. Did we hire them wrong? Did we orient?

• 1:19:48Patrick Bet-David?

  I agree with you.

• 1:19:49Speaker 00

  If something go wrong, I have to go back and tweak my processes, not the employees. And if I have those numbers, that means my processes. That says your processes are really screwed up. Start over. That's what that says to me.

• 1:20:04Patrick Bet-David?

  Okay, how many times in your career did you fire people?

• 1:20:09Patrick Bet-David?

  How many people have you personally fired?

• 1:20:12Speaker 00

  Well, I look at channel managers. I roughly five or six.

• 1:20:18Patrick Bet-David?

  Five or six you fired in thirty years at Ritz? From ninety-one to?

• 1:20:23Speaker 00

  Twenty years, twenty years at Ritz. That's between?

• 1:20:26Patrick Bet-David?

  I think you were at Ritz seventy?

• 1:20:27Speaker 00

  Hold it, that's between Ritz and Capella. So in thirty years, yeah.

• 1:20:30Patrick Bet-David?

  Okay, so in thirty years, you fired five managers, five GMs?

• 1:20:33Speaker 00

  Channel managers, channel managers.

• 1:20:35Patrick Bet-David?

  Who, how often did you fire people at Hyatt? How many people did you fire at Hyatt?

• 1:20:40Speaker 00

  Oh, that was earlier when I was working different.

• 1:20:44Speaker 00

  I didn't fire channel managers, but managers a lot, yeah.

• 1:20:47Patrick Bet-David?

  A lot, what's a lot? Fifty, hundred, two hundred?

• 1:20:49Speaker 00

  Yeah, something.

• 1:20:50Patrick Bet-David?

  Okay, so tell me what got, what did a person do to get you to a point of wanting to fire them?

• 1:20:54Speaker 00

  Okay. For example, I, as a leader, we talk about delegating and so on. We kind of what Tesla, what do you delegate? You delegate, except you don't delegate your vision and your purpose. You don't delegate the standards. You don't delegate the values. You don't delegate those things. You don't delegate all these things. So, but you let people do things and then you measure and make sure they happen. You cannot hope then, hope is not a strategy whatsoever. So you measure and you establish the, you establish the expectation. You expected the expectation.

• 1:21:35Patrick Bet-David?

  Makes sense.

• 1:21:36Speaker 00

  So my expectation, for example, was, and there was a key element here, employee satisfaction X.

• 1:21:44Speaker 00

  Customer satisfaction, ninety-two percent top box, intend to return, intend to recommend, ninety-two percent minimum. And that was made very clear. But how are you, as Shannon mentioned, now I said, Patrick, now understand, that is, understand, I have no right to compromise. I am here for all concerned. Sure. My, my right of compromising is over. So my expectation is, do you think you can handle it? By the, by the way, and by the way, my role is to help you. Okay. I'm here available, call me anytime, I'm here to help you. I will come to your hotel and spend time with you, but I'm here to help you. But here's the expectation, here are the expectation, customer satisfaction, employee satisfaction, and so on, and I delegate you, and here's how our rules, and you go to a rotation,

• 1:22:29Speaker 00

  here's how we do it. They learn that the employee is a part of the company, not just working for the company. They learn that any manager, that every employee works in an environment of belonging and purpose. Do you understand this, Patrick, I would say, belonging and purpose? So we go through all that, and then you have the precise numbers, and every year the precise budgets numbers, everything's clear. But now, I see the customer satisfaction, which was my key, on the end of the month, I see you are eighty-six percent. But ninety-two is the minimum standard. So I call you, Patrick, you know, he said, horse, no problem, I'm working on it.

• 1:23:14Speaker 00

  I got it. You will have careful customer service, you can dig into it, I don't have it, I don't look, I have no time for that. Was it from there, was it food, what was it? Correct it. Next two, next month is ninety-four percent. Now, Patrick, now listen, buddy, you understand, I'm, cannot compromise that, you understand, I'm getting upset. Next month, eighty-five percent. Patrick?

• 1:23:46Speaker 00

  Find a chair, put it in the corner of your office, because your desk will be mine. I'm moving. I will move to the hotel.

• 1:23:54Patrick Bet-David?

  You're gonna tell me this?

• 1:23:56Speaker 00

  Yes.

• 1:23:56Patrick Bet-David?

  And then how much longer after that are you firing me?

• 1:23:59Speaker 00

  Oh, you, I would, I would keep you if you stand, if you stay.

• 1:24:02Patrick Bet-David?

  At eighty?

• 1:24:04Speaker 00

  If you stay in the hotel and work with me and correct it till this ninety-two, and keep it, keep it there, I'm fine. But if it slips again, as Patrick, do me a favor, leave.

• 1:24:18Speaker 00

  You know, when, when you start hoping.

• 1:24:19Patrick Bet-David?

  Your number was ninety-two?

• 1:24:21Speaker 00

  Yeah.

• 1:24:23Speaker 00

  Yeah.

• 1:24:23Patrick Bet-David?

  Month, month by month by month. So at the beginning.

• 1:24:26Speaker 00

  Oh, yeah, you can have a month slip. That's no problem.

• 1:24:29Patrick Bet-David?

  Totally get that. But what I'm asking is, so, so every month, when you would look at reports and data, beginning of the month, when all the numbers are done, it's, you know, January.

• 1:24:39Speaker 00

  Many, many things are there.

• 1:24:40Patrick Bet-David?

  But what I'm saying is like, at the end of the month, month is over, it's a new week. What reports did you want to see at all the hotels? What numbers did you want to see?

• 1:24:47Speaker 00

  Customer satisfaction.

• 1:24:48Patrick Bet-David?

  That's it?

• 1:24:49Speaker 00

  Employee satisfaction, economics, comparison, and the future indicator of business that had to be above a very, very year ago. The indicator a year ago was, we have, we have already hypothetically now. A year ago today, we have, we had for the year, thousand reservation. Today, I want to have more than thousand for the next year. You, you understand?

• 1:25:14Patrick Bet-David?

  I give you prior best. I fully get it. Yeah.

• 1:25:17Speaker 00

  So, so that, that was one of them. Then the measurement, of course, I looked what, I looked at what was done, what the business for last month, did we live up to the budget? How are we doing according to the budget? Certainly, I looked at the economics, of course. I looked at the employee satisfaction. We did only one survey, but it changed slightly by telephone calls from employees coming in. And the, the satisfaction survey in, for employees changed. I looked for one, one question in the employee survey. I thought I insisted to be there, and that said, would you hire your mother? Would you hire, would you recommend your mother to work for our company?

• 1:25:58Speaker 00

  Would you, if your mother look for a job, would you recommend that she works for us?

• 1:26:04Patrick Bet-David?

  Are you asking me?

• 1:26:05Speaker 00

  That's what I did, that's what I, it was the question.

• 1:26:07Patrick Bet-David?

  I don't know if I'm recommending my mother to work at the company. So what would you do?

• 1:26:10Speaker 00

  In my company.

• 1:26:12Patrick Bet-David?

  Are you asking a question to say, do you love the company so much that you would recommend somebody else?

• 1:26:16Speaker 00

  That's right.

• 1:26:17Patrick Bet-David?

  My dad's eighty-three, I don't know if I'm recommending him, although he would be great customer service.

• 1:26:21Speaker 00

  Would, if it was possible, would you recommend it? Everybody understood that, if, if they say no, I have a question.

• 1:26:27Patrick Bet-David?

  That's your most important question.

• 1:26:29Speaker 00

  Yeah, most important question for me.

• 1:26:30Patrick Bet-David?

  It could be worded for, would you recommend your best friend to work?

• 1:26:33Speaker 00

  Thirty-six, when I looked at that one.

• 1:26:35Patrick Bet-David?

  Right, right.

• 1:26:36Speaker 00

  But, but then I look at the overall satisfaction, of course.

• 1:26:39Patrick Bet-David?

  Give me some more questions on the surveys, employee survey, what else did you have?

• 1:26:42Speaker 00

  And, and, and do, do you feel part of the, do you feel part of the company?

• 1:26:45Patrick Bet-David?

  Okay.

• 1:26:46Speaker 00

  Are you, do you know a career, your career path and so on?

• 1:26:50Patrick Bet-David?

  Do you know your career path, what else?

• 1:26:52Speaker 00

  Yeah. Well, it, it, most of it centered around.

• 1:26:56Patrick Bet-David?

  How many questions is it, how many total?

• 1:26:58Speaker 00

  Thirty-six.

• 1:26:58Patrick Bet-David?

  Thirty-six questions, every month?

• 1:27:00Speaker 00

  Yeah, no, no, no, no, that survey was only done once a year thoroughly.

• 1:27:07Patrick Bet-David?

  And what, what month did you typically do it?

• 1:27:10Speaker 00

  Uh, well, it depends on which hotel, it depends when they open, we usually did it, uh, three months after they opened, done that same month every year.

• 1:27:18Patrick Bet-David?

  Oh, I got, so interesting system, it's based on when they open up, it's not calendar.

• 1:27:22Speaker 00

  No, no, no.

• 1:27:22Patrick Bet-David?

  So it's not like December or January.

• 1:27:24Speaker 00

  No, no.

• 1:27:24Patrick Bet-David?

  So three months after they open up, so it, it would make sense to a different kind of a business, so different kind of a business, you do it annually and it's anonymous, you don't know who's answering it, it's just giving you data, so nobody feels uncomfortable not putting it.

• 1:27:36Speaker 00

  That's right.

• 1:27:37Patrick Bet-David?

  And then how are you doing customer satisfaction scores?

• 1:27:39Speaker 00

  In, in outside company, call in, we get the number, they.

• 1:27:43Patrick Bet-David?

  Outside company calls the customer?

• 1:27:45Speaker 00

  Yeah, yeah, and they give you the analysis once a month, I get the analysis for each hotel, intend to return and so. So, so now I'm moving to the hotel and, and, and the gentleman is with me. Now, most, most of them done quit. I consider them to be fired, they quit. They have to sit in the office with me and I'm making all decisions and so on, they're embarrassed and, and, and they, they quit. But what did I do? I looked at the survey, it's, it's so simple, everything, it's so simple, everything. I looked at the customer service, where, where they, where we impacted negatively.

• 1:28:24Speaker 00

  By the doorman, they were not friendly. So what I do, I go sit down with all the doormen and say now, guys, please help me. It seems that we didn't help you or didn't train you right. And I'm here to help you to become a respected, because you're not. But I'm here to help you. And I'm accepting that we made a mistake here somewhere. So help me, guess what? Four weeks later, it was corrected. It was, it was so simple every time. It, it, it is, it is not rocket science. You go and talk to the people connected to the process. But if you're not, you're living in Taylorism.

• 1:29:05Speaker 00

  Taylorism said, here's, Taylorism said, in the Industrial Revolution, said, hire people who fulfill a function. We think and they do. But this is ridiculous. After they do it, they know better how to do than I do my thing in my office, instead of going to them and say, what can we do?

• 1:29:27Speaker 03

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• 1:30:23Patrick Bet-David?

  No, I love that. I love that. So, but how did you teach me? I come to you and I say, hey, and again, I'm talking for specifically this part because when you're talking about Stephen Covey and Seven Habits of Highly Effective People. And then you said if a person after the age of 16, that's how they're going to be unless if they have a life-changing event, which Stephen Covey would call paradigm shift, right? To help somebody have a paradigm shift. What would you do for your management team to have paradigm shift? So for example, beginning of the year, you're doing a kickoff meeting, you bring your leaders in, and if you did, what would you do to create paradigm shift in me, one of your leaders?

• 1:30:59Speaker 00

  Well, with the leaders, it's easy. I mean, I'm the expert.

• 1:31:03Patrick Bet-David?

  Speaking into the mic.

• 1:31:04Speaker 00

  Yeah, with the leaders, it's actually pretty easy because I'm the standard setter. I'm the objective setter. I set objectives. And I asked them, I asked my leaders, my hotel leaders. When I was a manager, I asked my department leaders the same thing, by the way. I said, okay, tell me what they did the last three months to make sure that you have a better hotel. I asked them all, tell me what is the standard, how your hotel will be respected a year from now? I want to see if they have a vision. If they have a vision. Look, I visited a hotel, in fact, I visited Milwaukee. The chairman manager picks me up.

• 1:31:46Speaker 00

  The chairman manager picks me up in the airport, which I always do, and I get the same story, which is of course a lie. We are so happy you're visiting because nobody wants corporate to visit. Because we're so proud, and I'm in a limo. And I ask him all kind of questions. And then I ask him, what will be the position of your hotel? How will it be respected in the city a year from now? And he said, if I had a bigger ballroom, if my restaurant was on the second floor, if this hotel would be closer to the city center. With other words, he made excuses for a vision he didn't have.

• 1:32:24Speaker 00

  I visited a few days later Columbus, Ohio. Similar city, similar hotel, built by the same architect. And I was the chairman manager. And he said, you can check me. In a year from now, we will be respected and be the pride of the city.

• 1:32:41Patrick Bet-David?

  He says that to you?

• 1:32:42Speaker 00

  Yeah. And I realized, he's somebody has... And when you walk through the hotel, you can feel. In his hotel, Columbus, people feel part of it. The other hotel, they work in there.

• 1:32:53Patrick Bet-David?

  Do you remember this guy?

• 1:32:54Speaker 00

  Oh, yeah, oh, sure, sure, sure. Now, and then I said, wait a minute. I'm gonna make a study of all chairman manager, who has a vision, who doesn't? And for next three years, I asked everybody the same questions. And after three years, now, mind you, it's a study that I made, it wasn't scientific. But I'm generous, I mean, I tell you, there were five leaders, the rest were all managers. Now, they managed good results, some of them.

• 1:33:19Patrick Bet-David?

  Out of how many people?

• 1:33:20Speaker 00

  Out of sixty-five.

• 1:33:21Patrick Bet-David?

  Out of sixty-five, five were leaders, the rest were managers. Eight percent.

• 1:33:26Speaker 00

  Yeah. And now, wait a minute, some of those leaders, some of those managers had good results.

• 1:33:30Patrick Bet-David?

  Sure.

• 1:33:31Speaker 00

  And by the way, the worst ones, and this is pretty common, became the recognition as manager of the year. They became a trip around the world and so on.

• 1:33:42Patrick Bet-David?

  In Ritz?

• 1:33:43Speaker 00

  Not in Ritz.

• 1:33:45Patrick Bet-David?

  In Hyatt?

• 1:33:46Speaker 00

  In other companies.

• 1:33:47Patrick Bet-David?

  Okay, right.

• 1:33:49Speaker 00

  Now, why? Because it didn't paint anymore, and it didn't take, took the flowers away. And no, and they were applauded for making more profit and became manager of the year. Us that destroying the brand.

• 1:34:01Patrick Bet-David?

  Why?

• 1:34:03Speaker 00

  Because that's only thing corporate measures. Because they don't measure. That's why I measured, number one, customer satisfaction.

• 1:34:13Patrick Bet-David?

  Tell me your number one manager you had. Give me the profile of this individual. Three, four, five, six things you can think of. What made him so special? Number one, the best one.

• 1:34:22Speaker 00

  Number one, absolute relentless communication with his employees. They knew what was going on, they felt part. A relationship in which the employees felt part. What was number one.

• 1:34:35Patrick Bet-David?

  Okay.

• 1:34:35Speaker 00

  Process management with employees involved in building the process.

• 1:34:40Patrick Bet-David?

  Tell me what that means. Unpack that for me.

• 1:34:42Speaker 00

  That means, in the book, complaining room service, slow room service. He goes to room service and says, order taker, busboy. Weder, cook, work, find out the root cause, find the root cause of, find the root cause why we have slow room service complaints. And the people connected to the process when the employees worked on it. I tell you his result, I tell you a result he had. That is unbelievable. We, when we, when we, you, you start, you learn, you, you learn a second day the non-negotiables, which everybody gets in, in their pocket.

• 1:35:25Speaker 00

  If I catch somebody not carrying it in their pocket, I have a problem. General manager or dishwasher, I want you to carry it. Because that's who we are. And these are the non-negotiables. So.

• 1:35:36Patrick Bet-David?

  May I?

• 1:35:37Speaker 00

  Yeah, I, I give it yours a gift. It's in my book, by the way.

• 1:35:40Patrick Bet-David?

  I love it. This is the Capella.

• 1:35:43Speaker 00

  Capella one.

• 1:35:43Patrick Bet-David?

  Has it changed anything with Ritz?

• 1:35:45Speaker 00

  Oh, sure.

• 1:35:46Patrick Bet-David?

  So it's different than Ritz?

• 1:35:47Speaker 00

  Yeah, a little bit, a little bit, a little bit. And, and, and Ritz changed after I left.

• 1:35:53Patrick Bet-David?

  Well, I agree with you that it changed. So this goes to every employee?

• 1:35:56Speaker 00

  Every single employee.

• 1:35:57Patrick Bet-David?

  At Capella?

• 1:35:58Speaker 00

  At, at Capella, when you start working, you get it in your hand, you get it, learn, you learn it.

• 1:36:02Patrick Bet-David?

  I want to go back to this number one manager of yours. So number one.

• 1:36:05Speaker 00

  Wait, that's what I wanted to say.

• 1:36:06Patrick Bet-David?

  Okay, go for it.

• 1:36:06Speaker 00

  So, so, eh, this, when we talk over that hotel, it was so strong a union, it was the worst employee survey and the worst guest customer survey ever had, New York. This manager got into New York. And the employees slowly adopted that. I tell you how well he changed, changed it. Two years later, the, the union contract was, was due. The ma, the employees insisted that the union adopt us. That's the general manager who was leading his people, who were part of the people.

• 1:36:38Patrick Bet-David?

  For the union to adopt this?

• 1:36:40Speaker 00

  That's right. The employees insisted on it. One of the, so, so what, what did he do? What did he really do? And that's what I'm appealing to every, every work, every boss. He offered them to be part of something. Even Aristotle said, "You cannot be fulfilled in life unless you have purpose and belonging." Why wouldn't we offer that to our employees? That is really my number one point. Offer them purpose, offer them belonging. Don't make them chairs. My mentor did the first one. Remember the one? When I left there after three and a half years, he said, "Come here.

• 1:37:24Speaker 00

  Look me in the eyes. Promise me you never go to work. Promise you me not to become a chair."

• 1:37:32Patrick Bet-David?

  This is when you're leaving?

• 1:37:33Speaker 00

  When I'm leaving, three and a half years later. Now I was seventeen.

• 1:37:35Patrick Bet-David?

  This is the guy that impacted you heavily? Not the GM, but the other guy?

• 1:37:38Speaker 00

  Yes, yes. Promise me you'd become a chair. Because if you just go to work for the function that you fulfill, you're a chair, you're fulfilling a function, you have to have a high intent. The high intent is excellence in what you're doing.

• 1:37:55Patrick Bet-David?

  Promise me you don't become a chair?

• 1:37:57Speaker 00

  Yeah.

• 1:37:58Patrick Bet-David?

  Okay, so relentless communication with employees, process management, root cause. What else made that number one?

• 1:38:04Speaker 00

  Environment of belonging and purpose, and purpose.

• 1:38:09Patrick Bet-David?

  Got it. Got it. So those three things.

• 1:38:12Speaker 00

  Yes.

• 1:38:12Patrick Bet-David?

  Promise me you won't be a chair. Okay, so question for you.

• 1:38:15Speaker 00

  And again, he was relentlessly working on all process and continuing on. He was constantly seeking if, if, it's very important, very important here. If a problem repeated itself, he was right away and said, "Okay, let's look at the process.

• 1:38:33Speaker 00

  Let's find the root cause. Why this process going?" A root cause analysis was his strength. And you know, here's the thing. If you find root cause of your mistakes, you become efficient. Because by eliminating the mistake, you improve the product and lower your cost. Instead of cost cutting, which means you take something away from the customer.

• 1:38:58Patrick Bet-David?

  Question, this guy, who did he end up becoming?

• 1:39:01Speaker 00

  He ended up becoming a region, a vice president in the Beverly Hills Hilton for those hotels. And he ran for many years, he just a year ago and so retired from there.

• 1:39:14Patrick Bet-David?

  He retired, you still keep in contact?

• 1:39:15Speaker 00

  Oh, yes.

• 1:39:16Patrick Bet-David?

  So there's a friendship?

• 1:39:17Speaker 00

  Oh, sure.

• 1:39:18Patrick Bet-David?

  Incredible.

• 1:39:19Speaker 00

  Well, friendship, behind my back, some of those guys got together, created a reunion for me a few months ago, and people came from Europe and Asia and all over. They're all running major companies. I know what happened. The truth is, I know what happened. They got together and said, "Hos is getting old.

• 1:39:41Speaker 00

  Let's get together before he dies."

• 1:39:44Speaker 00

  You know that is true.

• 1:39:45Patrick Bet-David?

  Let me tell you though, let me tell you one thing, that this is very important for the audience to know this. You're nineteen, so you're how old? You're January ten? So you just turned eighty-seven, three weeks ago, right? Okay. So Mateo, my year, he brings you in, and I said, "How does he look and feel?" He says, "Oh, he's so strong." I said, "Tell me why." He says, "I tried to take the bag from him." He said, "No, no, no, you can't take this bag. There's a lot of money, I can carry it myself." Even at this age with the level of intensity that you have, it's so impressive. So I got a question for you. There's a book that was written five years ago called After Steve. And a book is about after Steve Jobs. What happened to Apple? Okay? When Tim Cook took over.

• 1:40:30Patrick Bet-David?

  What happened to, you know, when you left Ritz in the early 2000s? What happened to the standards after Horst? Were they able to maintain it?

• 1:40:41Speaker 00

  Well, let me tell you, one, sorry, I have to be careful here because I signed that I would not make disparaging remarks. However...

• 1:40:47Patrick Bet-David?

  Twenty years you got, that's a long...

• 1:40:49Speaker 00

  Long time. However, our most complimented, non-negotiable in Ritz card was number sixteen. It's number twelve, number twelve on this one here. And Cabala. Escort guest until they are comfortable with the direction and make visual contact with the destination, do not point. Okay, that was number sixteen.

• 1:41:15Speaker 00

  When that was the most complimented from the guest non-negotiable. People are always said, I asked her from this, I came from outside and they walked me all the way there. I cannot believe it.

• 1:41:26Patrick Bet-David?

  Mm-hmm, mm-hmm.

• 1:41:27Speaker 00

  When I left, they eliminated that one. Because it costs money to take somebody away from this.

• 1:41:33Patrick Bet-David?

  Stop it.

• 1:41:34Speaker 00

  The most complimented point by customers was eliminated. And I understand where I come from because nobody quite understood how deep those feelings were. You know, it was just, wow, that's what we do. Nobody looked up for the analysis that was the most complimented one.

• 1:41:55Patrick Bet-David?

  Sure.

• 1:41:55Speaker 00

  So, but altogether, who is rated number one today in the world? Capella, it's a company created afterwards. Where's Ritz in that analysis, twenty-six? And those are facts, I can say facts here.

• 1:42:11Patrick Bet-David?

  You were number one when you guys left.

• 1:42:13Speaker 00

  Oh, sure.

• 1:42:13Patrick Bet-David?

  They dropped from one to twenty-six and Capella's number one.

• 1:42:16Speaker 00

  Yeah.

• 1:42:17Patrick Bet-David?

  How important was it for you to prove that even afterwards, you're gonna continue not stop?

• 1:42:22Speaker 00

  I could do it anytime. I could do it, forgive me, because I would concentrate on the human being and on the processes that I do. I would, in the meantime, I would have to learn to even better select employees, be more respectful for them. And particularly, it's easier today because everybody complains about the millennials. But come on, learn how to handle them and do it.

• 1:42:49Patrick Bet-David?

  I agree.

• 1:42:49Speaker 00

  That's all.

• 1:42:50Patrick Bet-David?

  I agree, it's a lot of time, well, they've changed, they're lazy, they're this.

• 1:42:52Speaker 00

  Yeah, come on.

• 1:42:53Patrick Bet-David?

  You've become a softer leader.

• 1:42:56Speaker 00

  You're the leader, you're the leader, you have to figure it out.

• 1:42:59Patrick Bet-David?

  Yeah, I agree. You know what's crazy? When you read body language books, you know what they say about the lines in between the eyes?

• 1:43:05Speaker 00

  Yeah.

• 1:43:06Patrick Bet-David?

  Do you know what they say about it?

• 1:43:07Speaker 00

  No.

• 1:43:07Patrick Bet-David?

  Highly, highly intense, competitive individuals.

• 1:43:12Speaker 00

  Okay, okay.

• 1:43:13Patrick Bet-David?

  You have those two lines. You have those two lines, right here is what you have. So, you're a very rare combination of extremely charming, and you know it. You're very charming, very. And you have a fun side to you, that it's, it also feels like it's fun working with you. But my God, I feel the intensity and the seriousness that you're not going to compromise the standards for nothing. Is that a fair assessment of you?

• 1:43:38Speaker 00

  But let's face it, I have no moral right to compromise.

• 1:43:42Patrick Bet-David?

  You have no moral right to compromise?

• 1:43:44Speaker 00

  Of course not.

• 1:43:45Patrick Bet-David?

  Tell me why.

• 1:43:46Speaker 00

  I know my objective is good for all concerned. In that moment, I would be going against the owners, against the employees, against society, even against God, because I question myself, would God approve? I question myself very carefully. Is my objective, would God approve? In that moment, I painted myself in a corner. I can't just compromise anymore. You know, that's one of the big problems with management. They want to be, want to be known as a nice guy. That's not my business. And when I make a speech, I don't go into the speech so that people think I'm a nice guy. I go into the speech so that I give something.

• 1:44:26Speaker 00

  What I think, what you think of me, particularly at my age, what are you going to do, fire me?

• 1:44:30Patrick Bet-David?

  But when did you believe in yourself to know your philosophies worked? At what age were you bulletproof confidence that you know what you were doing?

• 1:44:39Speaker 00

  When I went halfway through my time in Hyatt, I was, I talked the worst hotel I made it, a major success. And I was, I knew the philosophy works. I wasn't, it wasn't so much, I am, I'm the right thing. No, but the philosophy of respecting the employee and loving the employee and make sure they're aligned, but not compromising and understanding the market and pushing those things together. That, that in a board meeting is fluffy conversations. But the same people have egos and feelings and totally ignore the feeling of those two entities that make a company.

• 1:45:23Speaker 00

  If you have a business, here, you have a business here, Patrick. Walk in here at three o'clock in the morning, is it a business? No, it's not. But now it is a business because you have people in here. So it's the people who make it a business.

• 1:45:36Patrick Bet-David?

  Great point.

• 1:45:36Speaker 00

  I have to accept that.

• 1:45:37Patrick Bet-David?

  Of course, great point. Very good point. But so you were in your 40s when you realized you were bulletproof. Like you were confident in your philosophy.

• 1:45:46Speaker 00

  I was totally confident then because it worked. There were successes. And I know, I know in that moment, I'm giving. I'm giving to people. I'm giving successes to people. You know, that is one of the honors. And we have to be conscious of that too. And, and, and, and, and I am having to be a believer. So what, and, and, and one of the key elements that I, and, and, and Jesus, forgive me, that I touch on this for a moment is love your neighbor as yourself. Wait a minute. Are your employees not your neighbors? Are your guests not your neighbors? They are my neighbors. Do I love them as myself?

• 1:46:31Patrick Bet-David?

  Hmm.

• 1:46:32Speaker 00

  But I cannot single out one or the other. I have to love them as a whole. Because otherwise, I'm going against one and the other if I just single out.

• 1:46:40Patrick Bet-David?

  When did Psalm 94 get a hold of you? That I'm going to take you under my wings? How old were you? You talked about Psalms 94 somewhere.

• 1:46:48Speaker 00

  Oh, yeah. Oh, well, growing up in Lutheran church, which is very Bible beating oriented. We had, for three years before you get confirmed with 14, you go to Bible class. The teacher, the pastor gets to know you well. And when you get confirmed, gives you word for your life. And he gave me Psalms 91-4. He will take you under his wing.

• 1:47:13Patrick Bet-David?

  91-4, got it.

• 1:47:15Speaker 00

  Yeah. And it is hanging in my kitchen.

• 1:47:17Patrick Bet-David?

  How old were you?

• 1:47:18Speaker 00

  14.

• 1:47:19Patrick Bet-David?

  At 14, he told, he gave you that?

• 1:47:21Speaker 00

  Yeah. Yeah. And it was with me ever since. It is with me and it's hanging in my kitchen.

• 1:47:25Patrick Bet-David?

  Interesting. To know that he's with you. He has your back.

• 1:47:28Speaker 00

  Yeah. And, and, and you know, sometimes as a young man, I forgot it. But when something went wrong, I went to look at it. Wait a minute. Where are your wings?

• 1:47:39Patrick Bet-David?

  Where have you been? I thought it was a promise. Yeah. That's funny. So now building the business. You know, and by the way, it's funny when you say Ritz Carlton. It's it's clear because I go to Ritz a lot, but I had a bad experience with Ritz two months ago. And I said, I wonder if horse would even allow something like this to happen. This doesn't make any sense to me. I was I went to an event. Ritz Carlton, every three to six months, we would do an event at the Fort Lauderdale Ritz. No problem. This last one, we go there. My EA says, you know, they put us in a different room. I said, why is that? We booked this thirty days ago, sixty days ago. He said, I don't know. They put us in a big room. Well, I'm not looking for a big room. I want a smaller room because I put sticky pads on the wall because we're doing a strategy session with our executive. I want that room.

• 1:48:24Patrick Bet-David?

  They changed it last night. They can't do that. Well, I talked to the director. He said, yes. I said, bring the director up. We get on the phone with the director right before the meeting. This is seven fifty seven and meeting starts at eight o'clock. And the director's not coming upstairs. And finally, I'm like, it's been thirteen minutes. Where is the director? I'm talking to the other employees. Wow, wow. Horse, I said, I'm gonna go see the director myself. I go downstairs. I'm at the front lobby at the Fort Lauderdale Ritz. He's behind the desk and I see him. I finally I say his name. And I said, I don't know what his name is. I can get it right. And I said, hey, Jose, are you gonna make me stand here all the time? Are you gonna come and talk to me? I've been asking you, why did you change my room? Thirty seconds later, he comes out and he's looking at me. I said, why did you change the room? I always get that room.

• 1:49:09Patrick Bet-David?

  Look, we just had to make the decision last night. I said, I'm gonna go to the room right now to see if somebody else is there. You can't do that. So me and my security, Dan, who is somewhere around here. I met him. You met him. He's got the tattoos on. There you go. Looks like a very friendly guy. So we walk up to, we walk up to the room and they're running after us. And I go in the room. Nobody's there. I said, why don't you give me the room? So then afterwards, I'm trying to find out what's going on here. One of the guys that works at Fort Lauderdale. Ritzy comes up to me, he says, Patrick, I told them, don't change the room on Patrick, he's not gonna like it, cuz he follows the content. I said, I still wanna know what happened here. Anyways, the room was given to a soccer team, whatever, because they were doing massages

• 1:49:54Patrick Bet-David?

  there, and nobody was there. Remember, I booked this room. Yeah. It's the room I like, and I'm a B-back customer, right? No explanation, nothing. The next day, Rob, can you text Mateo? I wanna make sure I give the right first names. I don't wanna mess this up. Uh, so then, the next day, Mateo calls me, he says, look at the email we just got. I said, what's the email? He says, they send us an email, saying they're apologize, uh, for what happened the day before, and they wanna give us 50% of the cost for the room back. And I said, Mateo, I don't care about the money. I will never- And it's all or nothing. I will never go to that Ritz Carlton in Fort Lauderdale, ever, again.

• 1:50:39Patrick Bet-David?

  I said, there is no way, this is horse, the horse's standards. So I'm telling him this, and they're going back and forth, back and forth, back and forth, and it was done. I was so disappointed, and you know what it made me think about? Here's what it made me think about. Here's a challenge, horse, and you gotta coach me through it, and I need your help with this. Hear me out, and you, you don't know where I'm going with this, but I think you'll, you'll see it here in a minute. I'm a founder of an insurance company, we build it, we grew it from zero to 60,000 agents, we sold it, we changed a lot of people's lives, and we did something nobody thought was ever possible. Our mission statement, in July of 2009, when I came up with it, two and a half months before I started the company, was saving America by bringing back the free enterprise system in hope to American families, and we took this concept, I was dressed as George

• 1:51:23Patrick Bet-David?

  Washington, my wife was dressed as Lady Liberty, we had a 40-foot Mount Rushmore on the stage, and we told everybody, we're gonna save America, and we're gonna help people through free enterprise, getting people to become insurance agents, building their business. We did something nobody thought was gonna happen. One office, Northridge, 50 states, we grew it. I sold the company three years ago. I haven't been the CEO for one year. I'm gone, okay? The standards are the standards that you create. Sure. How do you deal with looking and seeing if those standards are being maintained or not, by the leaders that come after you? How do you manage that yourself? Cuz I, I know, just listening to you right now-

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• 1:52:34Speaker 04

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• 1:53:00Speaker 00

  I got an email from a friend in Asia. It's about an experience in Ritz-Carlton. And it gave me so much pain. It still gives me pain. You cannot help it. Because if you have borne an organization like you have, you give birth to that. You put pride and fulfillment into it. It is not a place. It's not a work. It's a fulfillment there. And done it if it is totally mishandled. And here, 20 some years later,

• 1:53:45Speaker 00

  I'm still hurt and in pain about it. I can't. I have a hard time. I try. And I don't. I try not to stay in Ritz-Carlton's because when you walk into it, I'm, I feel I'm a stranger. Some of my walk into, I feel I'm home still. I'm home. Very few. Very few. Forgive me when I say those things. Ritz-Carlton, don't sue me. But it is. If you have value in what you did, if it had a meaning, if it was a purpose, you cannot help but get hurt. Because that which you created,

• 1:54:28Speaker 00

  it is not different than if Picasso would sit there and you would scratch on his painting. He would be very hurt. It's his painting, it's his creation would be hurt. You cannot get away from that. And unless we just created a business, the heck with it. But if that business was created with a heart and with a soul, which hopefully we do as human beings,

• 1:54:58Speaker 00

  particularly as creator, you get hurt. You cannot get away from that. I was so hurt a few days ago. A few days ago, I got an email. I was so hurt, I still have it on my phone. I was really hurt.

• 1:55:12Patrick Bet-David?

  Twenty years later, you're still hurt?

• 1:55:13Speaker 00

  Yeah, yeah. And I walk sometimes, often in the one that you mentioned.

• 1:55:21Speaker 00

  Could it be any other brand? Yeah.

• 1:55:26Speaker 00

  It shouldn't be, it should be Intenser. I had a call one day from Shanghai, from a friend who walked into the Ritz-Carlton, when I was running the Ritz-Carlton. I said, "I walked just in the Ritz-Carlton." And darn it, I could have complied, not seen the sign. I would have known it's a Ritz-Carlton. I could feel it. How people looked at me, how people say, "Sir," or people helped me. I would have known it's a Ritz-Carlton unquestionably. That's what you want to create. That's it. But you can create that with a hardware store. You can create it with anything. That's what I mean. It's hospitality that makes the difference and that makes the decision. It's not the product. You know, by the way, hospitality, let's see what it is really.

• 1:56:11Speaker 00

  It's service, everything we talk about is hospitality here. The first person who taught hospitality was Saint Benedict, the creator of the Benedict monasteries throughout Europe. He sent a letter to the head of his monasteries in the year 500 and said, "If a guest arrives, treat him as if it was Jesus himself. Otherwise, treat everyone as if they were the most important people in the world." And he recommended, in fact, even if you're on a fast, break your fast if the guest by himself and have dinner with them after you wash their feet. Now, how close do we come for that? Why wouldn't we try and come close to that?

• 1:56:56Speaker 00

  In businesses. Isn't that much more fulfilling for us rather than just fulfilling a function?

• 1:57:03Patrick Bet-David?

  Yeah, no, listen, the guy that you went into your room, who runs our cigar lounge now, his name is Mikel, I have to give him a shout out. Mikel was the general manager of an Italian restaurant here that I would go to three times a week.

• 1:57:16Speaker 00

  I know.

• 1:57:17Patrick Bet-David?

  He told you the story?

• 1:57:17Speaker 00

  Yeah, but I don't know, no, you used to three days, but you ended up going five days.

• 1:57:22Patrick Bet-David?

  Yes, but let me tell you what happened with him. Finally, one day, he wants to start his own thing. I said, why don't you come here and run this whole place? The feeling he gives you, horse.

• 1:57:35Patrick Bet-David?

  He's able to make the customer feel like you're the only thing that exists in the world. It is such a valuable skill for a human being to have. It's such a valuable skill for a human being to have, and I'm willing to pay premium for that. It's a very, very valuable thing for somebody you work hard, you want to go to a place, to be left alone. So where do you go to right now? Restaurant, where do you go to right now where you feel like the service here is impeccable? What are some places you go to that you like the service you get?

• 1:58:05Speaker 00

  We have some small places not known in Atlanta. You see, I travel still 100 days a year. I used to drive over 200 days a year. What happens when I arrive somewhere, they pick you up at a limousine, they take you to gourmet restaurant. I don't want to go to gourmet restaurant when I come home with my wife. We stay home, or we go to some similar spot, people know us there, and so you have the attention because they know you, and people say, we're glad you're here, and that's what you want. If that gentleman in the, in the, Ritz here would have said to you, my gosh, please forgive me, I messed up, and...

• 1:58:46Patrick Bet-David?

  I would have moved on.

• 1:58:47Speaker 00

  There you are.

• 1:58:48Patrick Bet-David?

  I would have moved, by the way, I would have moved on the moment. If he would have just came up

• 1:58:52Speaker 00

  Yeah, sure.

• 1:58:52Patrick Bet-David?

  And give me the attention and say, we messed up, he told me the truth, and if there was a valid reason why they moved the room, I would have had no problem with going back.

• 1:58:59Speaker 00

  That's what we, what we certified earlier, we talked about that. Every employee on Problem Resolution, we certified every employee, 24,000 employees around the world.

• 1:59:10Patrick Bet-David?

  Yep.

• 1:59:11Speaker 00

  And so the first thing is, you listen to the complaint, you listen. Then you show empathy and then you apologize as if it was your own, but you own it. And then you make amends and 50% is not an amend. A situation like that was, we will not, of course, we will not charge you. Of course, not we will give you 50%, no, of course, we will not charge you because we mess up.

• 1:59:35Patrick Bet-David?

  Yeah.

• 1:59:35Speaker 00

  Forgive me.

• 1:59:36Patrick Bet-David?

  Yeah, and that's what it was. By the way, the guy that helped us out, his name was Juan, very nice guy. He said, Patrick, I told him, don't do it. The director of events was a guy named Chris, I won't say his last name. And then the other guy that called us the next day, the director of operations was a guy named Sam. And Jose was the GM. And I think Jose is the one that sent the email for 50%. I was very turned off. I was very turned off by that.

• 2:00:01Speaker 00

  I mean, 50%, it's.

• 2:00:03Patrick Bet-David?

  I could care less about the money.

• 2:00:05Speaker 00

  But it doesn't matter.

• 2:00:06Patrick Bet-David?

  Who cares about the money like, you know, all you have, so again, that's the challenge, right? A brand, if the, if the existing founder, driver, CEO doesn't run customer service properly. Starbucks hires a guy that comes to them. It's a previous guy from Pepsi who used to be a consultant for some big consulting firm. They bring him in, 18 months, revenue drops, it's a messy of a culture. Then they bring a guy in Brian Nichol.

• 2:00:35Speaker 00

  Yeah.

• 2:00:36Patrick Bet-David?

  Brian Nichol comes from Chipotle, he gets in, he changes the culture, Starbucks is back on the rise again.

• 2:00:42Speaker 00

  Yeah.

• 2:00:42Patrick Bet-David?

  One great leader can change a company.

• 2:00:44Speaker 00

  Oh, of course, of course, because you, you, you, as a leader, you establish the philosophy comes from you. Because people immediately below you copy you and it goes all the way down. And if you do something negative, they think you want that. And that, that's it, all, all standards are gone. That's why I say that you, you don't compromise standards. You own the standards as a leader, you own the standards. But it, it, it, coming down all, all to, to a simple thing. I, I cannot expect my thousands of Starbucks to all, each one be singly trained by me.

• 2:01:24Speaker 00

  But they all know, they all should know, here's, here's the standard, we are here to care for people. They have to know that. And they have to be a reminder of that. We remind, those twenty things. You cannot go to work. You will be a reminder of one of them today. Today is number twelve. Tomorrow thirteen. And twenty days, number twelve again.

• 2:01:46Patrick Bet-David?

  I love that, pointing finger. There's a bathroom, horse. Can we use a restroom? Right there, walk down here.

• 2:01:51Speaker 00

  And then at four cars and you get lost.

• 2:01:56Patrick Bet-David?

  Yeah, versus somebody takes you there.

• 2:01:58Speaker 00

  And then we taught them, of course. You would take them there and you create a relationship. You say, have you tried our restaurant? Are you a hotel guest? Yes. Have you tried the restaurant? Hope you had a chance. If you're outsider, but you, oh, you didn't, don't say no, but you should try the restaurant. Everybody likes it. So you have conversation and you're selling something at the same time.

• 2:02:18Patrick Bet-David?

  Selling something, yeah. What would you say is your biggest gift? Like, what's your superpower?

• 2:02:23Speaker 00

  Mine?

• 2:02:23Patrick Bet-David?

  What's your superpower?

• 2:02:24Speaker 00

  Oh, relentless.

• 2:02:26Patrick Bet-David?

  Relentless. Would your wife say the same thing? About you?

• 2:02:29Speaker 00

  Yeah.

• 2:02:30Patrick Bet-David?

  She would say you're relentless.

• 2:02:31Speaker 00

  Probably. But, but in a positive way. Take about wife, take about marriage. I, it's the same thing. What's, what is your high intent? What is your, when I got married, before I got married, I picked, I saw my wife. And I was so much in love. I mean, come on. I mean, young man, you look, wow. This beautiful, wonderful human being. And we're going to get married. And then I thought, wait a minute. I know friends are getting divorced because they don't feel like it anymore. And then I established my high intent. I will be in love for the rest of my life. In that moment, and that is the model of leadership.

• 2:03:15Speaker 00

  Have intent, purpose. But then you have to commit yourself to it. Not to have a pipe dream. And then you have to initiate the things that make it happen. And keep focus on it. And that's where people break down. They focus all of a sudden on an excuse.

• 2:03:32Patrick Bet-David?

  What was your philosophy in raising kids?

• 2:03:35Speaker 00

  Raising kids, two things we want to accomplish. My wife and I. And please forgive me, everybody. We want them to be believers.

• 2:03:43Patrick Bet-David?

  Okay.

• 2:03:45Speaker 00

  And we want them to have, understand the difference between wrong and right integrity. People with integrity.

• 2:03:52Patrick Bet-David?

  That's it?

• 2:03:53Speaker 00

  That's it. That's it. Those are the key things that we worked on, prayed for.

• 2:04:00Speaker 00

  And were successful.

• 2:04:02Patrick Bet-David?

  Are they in the business you're in, or no?

• 2:04:03Speaker 00

  No, not at all.

• 2:04:05Patrick Bet-David?

  Is it two girls or four girls?

• 2:04:07Speaker 00

  Four girls.

• 2:04:07Patrick Bet-David?

  Okay, I'm gonna make sure I get that fact right, because two places said two different things.

• 2:04:11Speaker 00

  Yeah.

• 2:04:12Patrick Bet-David?

  That's great, so you got the family.

• 2:04:13Speaker 00

  So even, even, even family, you have to have objectives. My, my objective was to be in love with my wife, and I am in love with my wife. But I work on my mind even, for when I drive into the drive-in, the gate opens, I say, "Thank you, God, for my wonderful wife. I can't wait to take an arm now."

• 2:04:31Patrick Bet-David?

  Affirmations.

• 2:04:32Speaker 00

  You have to, you have to work on it. I mean, if, if you let, if, and, and, and I'm multi-minded on that. First of all, I want that for me. Secondly, I, I see the end of family happens, and that it will be the end of our civilization unquestionably, unquestionably, if a family goes. So I am jealous about what is marriage. Work on it. I, I, I ask, in every, in every speech, I ask the whole guy, guys in this room, when have you asked your wife last time how you can be a better husband?

• 2:05:09Patrick Bet-David?

  She'll tell you. I saw that in her as well.

• 2:05:11Speaker 00

  And after she cries, she will tell you.

• 2:05:12Patrick Bet-David?

  She will tell you. Did you, did you guys ever have a moment where it didn't work out?

• 2:05:16Speaker 00

  Oh, sure, many.

• 2:05:17Patrick Bet-David?

  Really?

• 2:05:17Speaker 00

  In between not, well, no, where it didn't work out, but.

• 2:05:20Patrick Bet-David?

  Where it was like close, falling out, big fights?

• 2:05:22Speaker 00

  No, not quite there, but there, there was.

• 2:05:24Patrick Bet-David?

  Fights, like, got it.

• 2:05:25Speaker 00

  Sure.

• 2:05:26Patrick Bet-David?

  Yeah. How do you overcome that?

• 2:05:27Speaker 00

  Sure, sure. Well, by, by sitting down and talking, and, and admitting that you were wrong.

• 2:05:35Speaker 00

  It was, it was my, my wife, who is fourteen years younger, so I married her at fourteen, she's twenty-six, and we have, have an argument, and I start screaming. And she said, "Why do you scream? Why don't we talk about it? Maybe you're right."

• 2:05:51Patrick Bet-David?

  Oh, my. She said that to you?

• 2:05:55Speaker 00

  And I said, "Here, this kid is teaching me how to communicate."

• 2:05:59Patrick Bet-David?

  Good for her. Wow.

• 2:06:01Speaker 00

  And, and I, and I realized I didn't want to talk about, what if I'm wrong?

• 2:06:07Patrick Bet-David?

  Wow.

• 2:06:08Speaker 00

  Yeah.

• 2:06:09Patrick Bet-David?

  Let's talk about it. Maybe you're right.

• 2:06:11Speaker 00

  Maybe you're right.

• 2:06:11Patrick Bet-David?

  And you guys have been married now, what, forty-seven years?

• 2:06:14Speaker 00

  Forty-seven years, yeah.

• 2:06:15Patrick Bet-David?

  Unbelievable. Good for you.

• 2:06:16Speaker 00

  Oh, it's great.

• 2:06:17Patrick Bet-David?

  Good for you. Respect for doing that.

• 2:06:19Speaker 00

  What a great thing.

• 2:06:20Patrick Bet-David?

  Unbelievable.

• 2:06:21Speaker 00

  What, I mean, look, what is this marriage? The only God-ordained union, the greatest union there is. Why wouldn't you work like crazy on it?

• 2:06:30Patrick Bet-David?

  Mm-hmm. And she was a partner with you while you're building, traveling, moving, all this stuff?

• 2:06:34Speaker 00

  Yeah, yeah. Yeah, wow. Let me tell you. I admire her for her. She raised children, and I was on the road. And there, too, I come back and I said, here's what we're gonna do. And I said, and she said, whoa, whoa, whoa, whoa, here's what we have planned.

• 2:06:53Speaker 00

  And I had to learn, in the beginning, so wait a minute, here's, this is how. And she said, well, you weren't here. We had to make decisions. I had to learn to communicate and respect decisions that are being made with much more input and points that I wasn't even aware of.

• 2:07:11Patrick Bet-David?

  You were not there. You were not there, and that's... So, a couple of other questions before we wrap up. You won the Malcolm Baldrige, um, Baldrige National Quality Award twice.

• 2:07:22Speaker 00

  That's correct.

• 2:07:23Patrick Bet-David?

  Ninety-two and ninety-nine. No other company has ever done this before. So, what is the significance of that? Because that's straight up from the White House, right? That's straight from the DC. What is the significance of that?

• 2:07:33Speaker 00

  Well, it's a fantastic thing that the government did more intensely. It happened during the, during the eighties, when the Japanese became major competitors to us. They were taking over. They're buying everything and controlling and product and cars and everything. No, we didn't make no more TVs. When the Commerce Department said we have to study how to be more competitive with the, with the Japanese. Study the number-one companies in the world. Study the companies that were sustained leaders in their product for many years, why and so on. Found commonalities and created a criteria.

• 2:08:17Speaker 00

  And afterwards said, we have to find out who...

• 2:08:21Speaker 00

  In America has comes close to that. So we can make it an example for other companies.

• 2:08:27Patrick Bet-David?

  Got it.

• 2:08:27Speaker 00

  So when you studied and done apply, if you win the Polish, you are obligated to open your company up for other companies come in and learn. For a year free.

• 2:08:39Patrick Bet-David?

  What a concept.

• 2:08:40Speaker 00

  Yeah.

• 2:08:41Patrick Bet-David?

  For a year for free?

• 2:08:42Speaker 00

  Yeah, we had every month twenty thirty companies there to learn. We created a learning center. Now I figured out how to make money on it. So we we we started at seven o'clock Monday mornings. So they had to check out on Sunday, check in on Sunday.

• 2:08:59Patrick Bet-David?

  So they still gotta book the room. That's great. So the companies would come and learn.

• 2:09:04Speaker 00

  Come and learn from us. If I'm not mistaken. Including Job, Steve Job, before they went into, before they went into retail.

• 2:09:12Patrick Bet-David?

  I was about to just say Apple. So Steve Jobs came to you?

• 2:09:15Speaker 00

  Yeah, yeah. Including for retail, including Disney was there many times and and and so on. People come in and and learning what are, how do we work the processes, the measurements, the process, the improvements and so on. And and and we were pretty good at, as I said, our channel manager was kind of best at the improvement, the elimination of process permanently. I tell one story in the book, if you read it.

• 2:09:45Speaker 00

  Excellent, Winston, excellence in room service, room service, where we had for six years a complaint. I was the channel manager of the first one, obviously. There was no other hotel. During my time, the complaint room service, I managed it like a normal manager. I said, read my lips, fix it.

• 2:10:06Speaker 00

  Doesn't work that way. You have to find out their process. I learned very carefully from the Polish office how to do that. I had my first Polish meeting. Somebody set it up. We were the best hotel company in the world and and had a lot of complaints. When somebody said, well, was I understand? They asked me.

• 2:10:28Speaker 00

  Best hotel company, I said, maybe we're the best of a lousy lot, but we're not very good. And he said, you should look into the Polish criteria. Went to, went to Washington, had a meeting with the head. He explained me the criteria for half an hour. I didn't understand a word he said, literally. And he said, you have time for lunch. At lunch with him. Years later, he asked me, when I was, became an expert in the issue. Do you know why I invited you for lunch? I said, why? He said, you didn't understand a word I said. He knew it.

• 2:11:03Patrick Bet-David?

  Why didn't you understand what he said?

• 2:11:06Speaker 00

  Fishbone analysis, parrot charts and things like that.

• 2:11:09Patrick Bet-David?

  I see, I got you. So he knew.

• 2:11:13Speaker 00

  Yeah. You have to understand, I left, left the school when I was 14 years old.

• 2:11:17Patrick Bet-David?

  That's right.

• 2:11:18Speaker 00

  I didn't go to business school.

• 2:11:20Patrick Bet-David?

  No college, no business school, nothing?

• 2:11:22Speaker 00

  Well, later, when I was here, I talked to courses in Cornell and so on.

• 2:11:26Patrick Bet-David?

  Didn't you later on get a PhD or doctorate from some school? What did, honorary doctorate? What school was it that gave it to you?

• 2:11:32Speaker 00

  I'm sorry, I said, it was not, when you ask me names, I'm always, I always put me in the word, Johnson and Bales.

• 2:11:41Patrick Bet-David?

  Okay, got it. Very cool. Very cool. So, so Steve Jobs, what did he ask you? When he was, what kind of questions was he asking?

• 2:11:48Speaker 00

  I wasn't involved in teaching him at the time. I was out in, in, in Asia at the time. But he came in to ask, how do we treat customer? What, what, what do you think make us successful? How do we make them successful? By saying hello, by, and he, he picked up, I know what he picked up. First contact. We teach, and that's what he, he got it. Most people don't get it even, what we teach. The behavioral analysts tell you, you make, you make a decision about somebody when, when you come within 10 feet.

• 2:12:22Speaker 00

  So how do I make sure you make a good decision? But wait a minute, they make a decision about you. So how make sure that decision is a good one? That's why when you go into, they have somebody staying there right away, well dressed. So say, welcome, can I help, what is it? And they take you. And we had learned that from the behavioral analyst. I work with behavioral analyst, University of Colorado and Frankfurt. They said, the decision is made about you the moment when we make contact. That's why we taught you have, when somebody comes within 10 feet, no matter what you do, you look them in the eye and say, welcome. Don't say hi. When you say hi, we are equal.

• 2:13:01Speaker 00

  But if I say, welcome, and so, sir, and so, and look you in the eye, I'm saying I respect you, but at the same time, Sam, you can trust me. I'm professional. So we make sure that I hired kids from Center City. I've never seen anything elegant in their life. So now we put them in a great outfit. We teach them not to use some words. Don't say ever hi, don't say okay, say my pleasure and so on. And three weeks later, this kid meets potentially the chairman of the Bank of England, and it works. And it works. That's what he saw.

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• 2:14:15Speaker 04

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• 2:14:40Speaker 00

  And that's what he, how he created the retail. And be impressed by the look of it. Have this positive in mind. We, we looked, by the way, it's very important for people to know, business to know. We looked at 400,000 comment cards. Beginning, we had comment cards. Chetty Power analyzed them for us. Whenever the first-

• 2:15:00Patrick Bet-David?

  400,000 comment cards?

• 2:15:01Speaker 00

  Yeah.

• 2:15:02Patrick Bet-David?

  What does that mean?

• 2:15:03Speaker 00

  Guest had commented in the room-

• 2:15:04Patrick Bet-David?

  Oh, comment cards, got it. 400,000 comment cards, got it.

• 2:15:07Speaker 00

  They're not scientifically that important. The, the, the call-in are much more scientific, by the way. But anyway, when I had them, I worked with Chetty Power, Dev Power was a friend. They talked them and analyzed them. And they came back and said, 100%, without exception, 100%, when the first contact was excellent, never did a complaint follow.

• 2:15:32Speaker 00

  Positive subconscious. Whenever there was one negative in either reservation domain or from desk, always did complaints follow. Wow. I mean, wow. So I have to make sure that my first contact. That's why when you work in Ritz-Carlton, first contact, that's why you saw huge flowers. First thing you saw, everything positive in your subconscious. So you feel positive about the rest.

• 2:15:55Patrick Bet-David?

  What presidents did you serve? Or which world leaders came to you guys at Ritz that you had a relationship with? Was it, was it an ongoing, hey, we're gonna come in, we'd like to be taken care of?

• 2:16:07Speaker 00

  Yeah, well, I knew, I knew Bush, the second one, very well.

• 2:16:11Patrick Bet-David?

  Okay.

• 2:16:12Speaker 00

  I knew him very well. And I knew Carter very well. Carter, in fact, after he was president, he had, later he had an apartment in, when the library was built, but before they were staying in the Ritz, and every morning he went shopping, I went shopping, we went shopping every morning.

• 2:16:31Patrick Bet-David?

  Oh, Buckhead, in Atlanta, I got it, makes sense.

• 2:16:34Speaker 00

  And we went shopping every morning, we come around the corner, people go to work, and we say good morning, take a look, oh, good morning. Of course, security was running with us.

• 2:16:44Patrick Bet-David?

  Yeah, you felt safe.

• 2:16:45Speaker 00

  I knew them very well, of course, I had, Clinton gave me the award, and Bush one gave me the award, and Ford, Ford was an owner of one of our hotels.

• 2:16:57Patrick Bet-David?

  Really?

• 2:16:58Speaker 00

  So I would, I knew several of them.

• 2:17:00Patrick Bet-David?

  Interesting, got it, very interesting, because I can only imagine that everybody comes in. By the way, two questions before we wrap up. Patel Motel Group, what do you know about the Patel Motel cartel that you don't know anything about? You know how they say they own seventy, eighty percent of hotels and their business model and the way they do it from India when they come in? You know nothing about those guys?

• 2:17:18Speaker 00

  No, no, I don't know much about them.

• 2:17:19Patrick Bet-David?

  It's a very interesting story.

• 2:17:20Speaker 00

  Heard about it, but I don't know much.

• 2:17:22Patrick Bet-David?

  Yeah, apparently they bring their families, and so the families would live in five rooms, and the families living in five rooms would allow them to charge the rooms at the lowest twenty-nine, thirty-nine bucks a night, so others would stay over other hotels, and the next thing, that's how they build their empire, apparently now they own seventy percent of hotels in America. Very interesting.

• 2:17:43Speaker 00

  I don't think seventy percent, but they own quite a few.

• 2:17:46Patrick Bet-David?

  That's the numbers that you'll read about, yeah, right, they're roughly seventy percent of all Indian motel owners.

• 2:17:50Speaker 00

  Oh, India, Indian motel.

• 2:17:51Patrick Bet-David?

  A third of all motels owners in America are named Patel.

• 2:17:54Speaker 00

  Yeah, well, there are a lot of Indian hotel motel owners, a lot of them, they come in, that wasn't easy business going, having some cash, they bought a motel and run it, and then added, added, added, so a lot of Indian hotel owners here, yeah. And of course, a couple of very good Taj hotels, is a very good hotel company.

• 2:18:11Patrick Bet-David?

  Capella Group, your most recent one that you sold, I think you said twenty seventeen and then finalized in twenty nineteen. You built a lot of the hotels in Asia, and I think one or two is in Saudi that you built, you can correct me if I'm wrong on these, but none in Europe, why not Europe?

• 2:18:30Speaker 00

  We had one in Europe.

• 2:18:31Patrick Bet-David?

  You did build one in Europe?

• 2:18:32Speaker 00

  Yeah, well, one second, we're not owning, yes, they own some.

• 2:18:36Patrick Bet-David?

  Operating, I totally get it, right.

• 2:18:38Speaker 00

  One was in Europe, and this is, but when I left, they... Disassociate themselves, they were able, there was a clause to get out when I left.

• 2:18:45Patrick Bet-David?

  Oh, I got it.

• 2:18:45Speaker 00

  So they left, they're independent now.

• 2:18:47Patrick Bet-David?

  Interesting.

• 2:18:48Speaker 00

  Great hotel, by the way.

• 2:18:49Patrick Bet-David?

  Interesting.

• 2:18:49Speaker 00

  Great hotel.

• 2:18:50Patrick Bet-David?

  What markets do you look at to say, these markets are good to build a hotel? Is there anything you look at? What demos do you look at?

• 2:18:56Speaker 00

  Well, you know, what I wanted to be, I looked at this at the time and still the same thing. If you start a hotel company, or you work a hotel company, you want to be in New York, you want to be in London, you want to be in Tokyo, you want to be... At the time, Hong Kong was the number one thing. Today, Singapore is equally important. Still, Hong Kong is okay, but it used to be the financial place where you had to be. Singapore today, much so, so in the key places. No, but my first hotel was Atlanta and then Debon Michigan and so on. And I had to still make it number one in the world. We became number one in the world, you know. And I dealt, later my competition was Four Seasons. They were in London and in Tokyo and in New York and everywhere.

• 2:19:38Speaker 00

  And I was, no, we ended up to be in Tokyo and so on also. And when we opened Osaka, we were immediately voted best hotel in Japan. You know, I insisted, wherever we are, we're number one. Period. And I dealt with the general managers, I said, will you accept that?

• 2:19:59Patrick Bet-David?

  Did you play sports as a kid? Where does your competitive fire come from? Why are you so competitive?

• 2:20:04Speaker 00

  I don't know, I don't know.

• 2:20:06Patrick Bet-David?

  You're very competitive.

• 2:20:07Speaker 00

  Yeah.

• 2:20:08Patrick Bet-David?

  Mom or dad, who's more competitive? Because you're very competitive.

• 2:20:10Speaker 00

  I think mom.

• 2:20:11Patrick Bet-David?

  Mom?

• 2:20:12Speaker 00

  Yeah.

• 2:20:12Patrick Bet-David?

  Mom was competitive.

• 2:20:13Speaker 00

  Yeah, yeah.

• 2:20:13Patrick Bet-David?

  Did mom and dad ever come to the States or no?

• 2:20:15Speaker 00

  Oh, yeah, oh, yeah, yeah, yeah. But you have to say, when I started off, they were, particularly my grandfather, they all were embarrassed that I want to work in the hotel business. That's not what they did in Germany. You want to have a technical job. If I would have said rufe, that's honorable.

• 2:20:32Patrick Bet-David?

  Over hotel.

• 2:20:34Speaker 00

  That's honorable, but in a hotel. So my father thought I would work as a waiter for the rest of my life. And I was disappointed. But then, of course, I had my successors, they were very proud.

• 2:20:50Patrick Bet-David?

  Did you ever take your girls back to the city where you grew up in? Do you ever go and show the family there?

• 2:20:55Speaker 00

  We spent every summer there.

• 2:20:56Patrick Bet-David?

  Every summer there?

• 2:20:57Speaker 00

  Yeah.

• 2:20:58Patrick Bet-David?

  Why?

• 2:20:59Speaker 00

  That's who I am. And I'm lucky, my wife loves it as much as I do. Otherwise, I wouldn't have the house anymore.

• 2:21:07Patrick Bet-David?

  What's great about the city there now?

• 2:21:09Speaker 00

  It's a village, it's a small village. Where you, like, she just was there for a couple of days with my daughter. And she called me and said, "I feel this peace again. I walked through the little village. It's dark and quiet, but I hear some people singing. The Klee Club is rehearsing." And I heard some, and I said, "And the peace, when I come walk in the house, it's a peace that I cannot find anywhere else." And we have, we feel that, we feel that. It's a, it's a different life. But it's also, I grew up there. And I, I don't want to become somebody else.

• 2:21:51Speaker 00

  I want to be the boy from the village. You know, there's something about that, the home. I'm, in the meantime, I'm American. I'm, and I love the country. I have the same fears and hopes that most of us have. The fears have developed dramatically over the last twenty years in America.

• 2:22:16Patrick Bet-David?

  What ways?

• 2:22:17Speaker 00

  Well, the values, we, we had, we had a country. Give you no pain about it, and I hope the world is not going to. We had a country that had clear values, Judeo-Christian values. We didn't have to be believers, but we had Judeo-Christian values. Now, we have three hundred fifty million different values. Each one runs around because we said, we didn't insist. We gave up teaching those values. We gave up showing consequentless if you don't, including eternity, teaching in school.

• 2:22:59Speaker 00

  We have given up who we are, but we still want to be who we were. That's kind of silly, but that's what we have done. And so we are on the edge of one way or another. We talk about socialism and the people that talk about socialism don't even know what it is. I haven't heard anybody explain socialism to me or even those leaders that are for and against it. The key element that America should know about socialism and doesn't. If you look at the countries that were socialist, including Cuba, but take Europe,

• 2:23:39Speaker 00

  take all of the Eastern European countries for 70 years in socialism, communism, 70, take Russia out of the equation for a moment, all the other countries. In 70 years, we talk about freedom, there's something much deeper. Show me one thought that came out of those countries in the 70 years, what other was? You eliminate thinking and that's what we want and that's what we look at. Well, we learned before that and if we would still have should there Christian values, we wouldn't accept it in the first place, that socialism, but we talk about it.

• 2:24:20Speaker 00

  Oh, all I can say to you, America, where the hell are you going? We still, oh, are we a critic of, God shed its grace on thee, yes. But my goodness, we have to, we should really worry right now. We should really be concerned. We should really do something. What should we do? We should go, demand and insist on thinking. Now, if I am going to say...

• 2:24:56Speaker 00

  Men can have children. Or if I cannot answer that question, that means I am not thinking anymore, or I refuse to think. If I am in a city like Detroit, which is a disaster to a great extent, please Detroit, don't call me. But it is, I lived there for a while. For eighty years, yet I vote every year for the same, every time for the same party. I am not thinking. We have to encourage that people think in our schools again, that at least they know a bit, that what do you think about, yeah, the... Again, high intent.

• 2:25:34Speaker 00

  Why do they march against moving illegals? Because they have no intent, they have no purpose themselves. They have no purpose, so you look for a momentary purpose, which is gone. And then you're really helpless. Purpose, we have to teach people again to have purpose, high purpose. Purpose of value, purpose for a great country, where we respect each other. Purpose of having a life that is fulfilled, where you can think, where you can express. Go and look at them, could they express? No, that's why no thought came from Eastern Europe.

• 2:26:18Speaker 00

  Those of us who lived it, actually, I lived it. I went every year to visit my cousins in East Germany. Stories I can tell you, it's unbelievable. And that's what we want. Because we have no higher purpose.

• 2:26:33Patrick Bet-David?

  Can you share one story? One story, when you go visit East Germany, from your family, what they experienced?

• 2:26:38Speaker 00

  Okay, my cousin, chief anesthesiologist in the number one hospital. I walk the sidewalks with outlight and with holes in East Berlin. I walk to her apartment. This old stair with one bulb hanging down. Going into her apartment, she is a chief anesthesiologist. Her husband has this little technical magazine that he owns, that he does, that was lost ownership. In the apartment, in the kitchen, they have a plastic square with plastic curtains that's their shower.

• 2:27:18Speaker 00

  Okay? That's how you live. And they have, but they have applied for another apartment. The average wait for another apartment is ten years.

• 2:27:26Patrick Bet-David?

  Wow.

• 2:27:29Speaker 00

  They also had applied for a car six years ago, but it's not there yet. Now you tell me this works. And speaking up against it, they were not allowed. After all, you're not allowed to think. So how can you get creative? Now, the wall comes down. Four years later, I visit them. They have a new house by a river with two Mercedes staying there. They live in a free country where they can work, make a, make a win. What do you, what do you want? But it did work for that now. You cannot live in a free country and hope that somebody buys it for you. That is that you sentence yourself into that position. Oh, but you sentence yourself. It's not others. You define yourself.

• 2:28:16Speaker 00

  Not the government, not the president, not the other race. You define yourself. That is the thing. And they, they were defined by the government.

• 2:28:28Speaker 00

  And suddenly come out and decide to define themselves as winners. And they're winning.

• 2:28:35Patrick Bet-David?

  Yeah, good for them. I mean,

• 2:28:36Speaker 00

  Yeah.

• 2:28:37Patrick Bet-David?

  I, I, I went there in eighty-nine. I lived there in eighty-nine.

• 2:28:40Speaker 00

  Oh, yeah.

• 2:28:40Patrick Bet-David?

  And Germany was, you guys, in nineteen ninety, you won the World Cup.

• 2:28:44Speaker 00

  Yeah.

• 2:28:45Patrick Bet-David?

  Right? That's when the famous singer was Matthias Rhein. "Ich liebe dich, ich liebe dich nicht."

• 2:28:49Speaker 00

  Yeah.

• 2:28:50Patrick Bet-David?

  Was the song. "Ich brauch dich, ich brauch dich nicht." Something like that was another song, yeah.

• 2:28:54Speaker 00

  Yeah, yeah, yeah, yeah, yeah.

• 2:28:55Patrick Bet-David?

  That's when David Hasselhoff was God, when Sat-Eins was the channel. And you guys had a Wheel of Fortune called Rudy, Tooty, Fruity, something like that. I don't know what it was called, the show with the girl, you know, half naked girl doing Wheel of... Very weird. From Iran, you go there, you're like, wait a minute, what's going on with Germany?

• 2:29:11Speaker 00

  What's going on, yeah?

• 2:29:12Patrick Bet-David?

  I had a great time in Germany, though. Had a very good time. Good memories in Germany. Horst, I can talk to you for hours. The amount of wisdom you have is unbelievable. And in my mind... I was hoping for this conversation and it was even a better conversation than what I thought it was gonna be.

• 2:29:27Speaker 00

  Thank you very much.

• 2:29:28Patrick Bet-David?

  So I appreciate you for coming down and sitting down. For the folks watching this, we're gonna put the link below to the book Excellence Wins. We'll put the link below for folks to go support this. The rest of the ideology will be in the book as well. Horst, thank you so much for this.

• 2:29:42Speaker 00

  My pleasure.

• 2:29:43Patrick Bet-David?

  It's a pleasure having you on.

• 2:29:44Speaker 00

  I have gone through many sessions. It's how the discussion runs is always up to the interviewer.

• 2:29:50Patrick Bet-David?

  Well, it was very easy talking to you and I learned a lot. Thank you, sir. Appreciate you.

• 2:29:55Speaker 00

  Thank you. Delighted.

• 2:30:28Speaker 06

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