Hilton vs Marriott | Check-In | 1

0:12In the streets of West Berlin, spies slip between shadows. Soldiers patrol barricades, and refugees from the city's Soviet-controlled east seek shelter. It's November 1958, and this tiny oasis of capitalism is encircled by communist East Germany. The Soviets want it, and no one knows how far they will go to get it.

0:43But tonight, there's a new capitalist beacon shining bright. The Berlin Hilton, a 13-story upscale hotel with nearly 350 rooms. And in its ballroom, the founder of Hilton Hotels is throwing an opening party for ambassadors, movie stars, and other VIPs. That man is Conrad Hilton, the world's number one hotelier. He's 70, tall and sprightly, and loves the limelight. The Berlin Hilton is his 34th hotel, but this one's about more than profit. For Conrad and the U.S. State Department, it tells Moscow that the West is here to stay, and only a Hilton has the cachet to do that. A smile spreads on Conrad's tanned face as he leads his assistant onto the dance floor.

1:42The guests cheer as they dance the Varsoviana. It's a slow, unhurried dance, part waltz, part square dance. And he does it every time he opens a new hotel. But behind the scenes, every second counts. In the staff-only corridor leading to the ballroom, The party organizer barks orders at the kitchen via a radio headset. I need salads in 15. The organizer turns and scowls as he spots a man using a chain to lead a muzzled brown bear towards him. It's about time you're on any moment. Back in the ballroom, Conrad's dance is done, and he's now addressing his guests. Thank you all for being here for this historic moment.

2:31You know, some said we shouldn't open a hotel in Berlin because of Russia's threats. But Hilton hotels are not built where there's no future for them. Hotels support peace. If you get to know your neighbor, you're less likely to fight with him. Our hotels make getting to know our neighbors easier and more comfortable. And in that spirit of diplomacy, I invited a neighbor from East Germany here tonight. and he's a real communist bear. Guests gasp as the tamer leads the bear into the room. The tamer waves his stick. The bear rears up and starts hopping from paw to paw. But then the bear sniffs the air.

3:17The aroma of frying pheasant is wafting in from the kitchen and it smells good. The bear lunges forward. The tamer loses his grip on the chain. Guests scatter and scream as the bear races for the exit with a tamer in pursuit. In the staff-only corridor, the party organizer is still on his radio headset and unaware of the mayhem in the ballroom. Salads ready? Almost. The organizer frowns as he hears chaos in the kitchen. What is going on? There's a bear. There's a bear in my kitchen. Once the bear's recaptured, the party resumes. Nothing, it seems, can break Hilton's stride, not even a bear in the kitchen.

4:09But back in America, a devoutly religious family is taking its first unsteady steps into the hotel trade. They're called the Marriott's, and they're powered by a combustible father-and-son relationship that will turn them from late starters to the biggest threat Hilton's ever faced.

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6:49From Wondery, I'm David Brown, and this is Business Wars.

7:17In this season, we check in on the rivalry between the world's best-known hoteliers, Hilton and Marriott. They've spent decades vying to dominate the$1.2 trillion hotel industry. They've jostled to shower travelers with rewards, raced to outbuild each other, invaded one another's turf, and snatched away each other's hotels. Hilton's the elder company, founded by Paris Hilton's party-loving great-grandfather. Marriott's the conservative upstart that made millions in catering before diving into hotels. Today, they operate dozens of brands and thousands of properties across the globe. Marriott's family includes Sheraton, Courtyard, and Ritz-Carlton.

8:03Hilton has Doubletree, Garden Inn, Embassy Suites, and more under its flag. But their rise hasn't been restful. Hotels are a high-stakes business built on rickety finance and unpredictable road warriors. To keep pace, they've had to innovate, win the loyalty of millions, and survive close shaves with bankruptcy. This is Episode 1. Check in.

8:38Conrad Hilton steps out of the telegraph office and into the brutal heat of the Texas sun. It's a summer's afternoon in 1919, and he's a 30-year-old war veteran from New Mexico who wants to make his fortune in banking. That quest led him here, to the dusty oil-boom town of Sisko. He hoped to buy the local bank, but its owner upped the price at the last minute. So Conrad's just walked away from the deal. Now, he needs to rest and plan his next move. He scans the deserted street and sees the Mobley Hotel. It's a two-story red brick building and the only hotel in town. Conrad adjusts his battered Stetson hat and heads inside.

9:29Inside, the lobby's full of oil workers clamoring for a room, with beds going fast. Coming through. Conrad uses his six-foot-two frame to push through the throng. But as he nears the front, the craggy-faced man behind the check-in desk slams his ledger shut. That's it. We're full. No more beds. The disappointed oil workers slink away. Conrad stands in the lobby wondering what to do now. The clerk scuttles out from behind the check-in desk. Hey, you. No loitering. Get out of my lobby. Come back in eight hours. Conrad cocks his head. Eight hours? We turn over rooms every eight hours. Now get. Conrad doesn't move.

10:16His family once ran a hotel. He knows that a hotel that can fill its beds three times every 24 hours is on to a good thing. He looks down at the clerk. You're the owner? Yeah, I'm Mr. Mobley. Lucky me. Chained to this flop house. I ought to be in the oil fields making real money. And I would if my money weren't stuck in this place. Conrad suppresses his rising excitement. So this place is for sale? Hell yeah. Then show me your books, because I want to buy it. The books confirm Conrad's suspicions. The Mobley's 42 rooms earn more than the bank he hoped to buy, but Mr. Mobley's too oil crazed to see it.

11:06Conrad brings in two investors, buys the Mobley for$40 ,000, and becomes a hotel keeper. He improves the place fast. He ensures guests get clean sheets and fresh soap. He fires up employees by telling them the hotel's success depends on them because happy guests mean more customers. And if that happens, he'll pay them more. He also sweats every square foot for maximum profit. He converts the dining area into extra rooms and shrinks the check-in to make way for a newspaper and tobacco kiosk. Encouraged, Conrad spends the early 1920s buying other run-down hotels in Texas oil towns. Each gets the Mobley treatment.

11:52And every time, profits soar. What Conrad really wants is to build his own hotel. One that will bear the Hilton name. And in Dallas, he finds the perfect place to put it. There's just one problem. His hotel will cost a million dollars to build, and he's only got$100 ,000. It seems impossible. But then he gets an idea. An outrageous idea.

12:26Dallas, 1924. Conrad's in the office of George Loudermilk, the owner of the plot Conrad wants to build his hotel on. And for his plan to work, he needs Loudermilk on his side. Conrad smiles and makes his pitch. Mr. Loudermilk, I want to build a hotel on your land. Not any hotel, but a million-dollar hotel. Fourteen stories, 325 rooms, all with ceiling fans. Wonderful. Loudermilk's thrilled. But now that Conrad's got Loudermilk hooked, he's got to reel him in. Of course, this would tie up all of my capital. So instead of buying your land, I want to lease it. Loudermilk blinks. His smile disappears.

13:15A lease? You're crazy. I'm not letting you build on land I own. Conrad presses on. It'd be a 99-year lease. Think of it as a sale and installments. I won't live 99 years. Who do you think I am, Methuselah? You'd still own the land. If I don't pay, you'd get your land back and the hotel. I'd get the land and the hotel? That's right. Hmm. Well, I might consider it. Conrad leans forward. Just one more thing. What? I want permission to use the lease to get a loan so I can bill the hotel. Loudermilk nearly falls off his chair Conrad wants to lease his land and use it as security for the loan he'll need to build his hotel It's a financial conjuring trick But for little more than a signature Loudermilk gets to turn his vacant lot into a million-dollar upscale hotel He gives Conrad the lease Conrad then uses it to borrow from several banks and starts building his hotel.

14:30But he soon discovers that a million dollars isn't enough. Dallas, 1925. In his office, Conrad stares at the$50 ,000 check he just wrote, wondering who should get it. His plumber is threatening to walk unless he's paid. But one of Conrad's banks wants its loan repaid, and Conrad can only afford to pay one of them. If he pays the bank, construction of his hotel will grind to a halt. If he pays the plumber, the bank will foreclose. Either way, he goes bust. He takes a coin, flicks it into the air, and catches it on the back of his hand. Tails for the bank. Conrad checks the coin. Its heads. He addresses the check to the plumber and puts it in an envelope.

15:25But instead of putting it in his outbox, he leaves it on his desk and goes for a walk. Conrad wanders downtown Dallas for an hour, chewing over his dilemma, and decides he should pay the bank instead. But then an awful thought grips him. He runs to the nearest payphone. Operator, connect me to the office of Conrad Hilton. Conrad's secretary answers. Hi, Mr. Hilton. What do you need? The letter on my desk. Oh, don't you worry. I saw it and I put it in the mail. Conrad's heart sinks. He's too late. The check's gone. The bank won't get paid. He's finished and Loudermilk will get his hotel. Well, Conrad runs towards the only man he thinks can save him now.

16:19Ten minutes later, Conrad bursts into the office of Harry Siegel. Siegel's a friend and an investor in Conrad's hotels. Harry, I need help. I made a terrible mistake. I put a$50 ,000 check in the mail to my plumber, but the bank wants that money. And I haven't got a dime left. I need that letter. You know the postmaster, right? Can you speak with him? Siegel looks perturbed. Conrad, that's highly illegal. But without that money, I'm ruined. Come on, you must try. There's no other way. Siegel sees the fear in Conrad's eyes. It's the fear of a man who's about to lose everything. But there is another way.

17:02Siegel reaches for his checkbook, writes a check for$50 ,000, and hands it to Conrad. You'll pay them both. But Harry, I haven't got any security to offer you. I didn't ask for any, did I? I trust you. It's all that matters. In August 1925, the 14-story Dallas Hilton opens. It's a horseshoe-shaped building clad in brick with neoclassical flourishes and the first hotel to bear the Hilton name. It also offers modern amenities and good service at moderate prices. And for Conrad, it's only the beginning. He now wants Hilton hotels throughout Texas. And thanks to his lease and borrow approach to hotel building, he knows how to make that happen.

17:54But as new Hiltons rise toward the Texas skies, a double threat is coming from the East. America's stock market is on the verge of cratering the economy. and an ambitious Mormon is about to launch the business that's destined to give Conrad Hilton a wake-up call.

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20:26It's May 1927, and in a small storefront on 14th Street in Washington, D.C., J.W. Marriott's about to open the first A &W east of the Mississippi. J.W. is the devout 26-year-old son of a Utah sheepherder. He's got prominent ears and short, side-parted hair. His journey to this moment started six years ago, when he first visited the Capitol as a Latter-day Saints missionary. On that visit, he saw a pushcart vendor struggling to meet the demand for ice-cold lemonade from sweltering tourists. Then, back in Utah, he paid his first visit to A &W, a new fast-growing chain of root beer stands. He connected the dots between the two experiences and realized that A &W's refreshing mugs of root beer would be a surefire hit in D.C.

21:17So he teamed up with his old missionary pal Hugh Colton to buy an A &W franchise and head east. And now he's about to put his plan to the test. Shortly after 10 a.m., the first customer enters. J.W. greets him. Welcome to A &W. Can I get you a nice cold mug of root beer? Yes, please. As J.W. fills a frosty mug with root beer, the customer hops onto a stool. Say, you heard any news about Charles Lindbergh? Is he still in the air? Lindbergh took off from Long Island this morning in a daring attempt to become the first person to fly across the Atlantic nonstop. Uh, sorry, no. The customer looks disappointed.

22:03But then another customer enters. The first customer turns around. Hey, you heard anything about Lindbergh? No, I hoped you might have. J.W. suddenly gets an idea. He turns to Colton. Hold the fort. Before Colton can object, J.W. races out the door. Fifteen minutes later, J.W. returns. The customers are still there, discussing Lindbergh. You know, even if the airplane holds together, he'll fall asleep and crash into the ocean. But they stop yakking the moment they see what J.W. is carrying under his arm. a countertop radio. JW sets it up and tunes into the news.

22:49Soon, the A &W is full of people listening to the news. That day, they serve 2 ,000 mugs of root beer. Within weeks, they've opened another A &W. But when summer fades, demand for root beer dies. So they start selling chili, cancel their A &W franchise, and rebrand their stores as Hot Shops. But the profits can't support two families, so J.W. buys Colton out and puts his all into Hot Shops. He broadens the menu and writes step-by-step how-to guides for employees on everything from greeting customers to cleaning windows. His attention to detail is rewarded with rising sales. By the time the Great Depression begins in October 1929, J.W.'s got three hot shops doing brisk business.

23:43And since D.C.'s a government city, the economic downturn barely dents their sales. But in Texas, Conrad Hilton's exposed.

23:58El Paso, Texas, November 1930. In the banquet hall at the El Paso Hilton, the Toastmaster raises his glass. To the great Mr. Hilton! To Mr. Hilton! Conrad smiles as the 350 men in the hall toast him. The El Paso Hilton opened today, and to celebrate, he's putting on a grand dinner. The 19-floor El Paso Hilton is his most expensive and lavish hotel yet. Every room has radio speakers hidden in the chandeliers, and there's two miles of carpet covering its floors. Like every Hilton, it promises modern facilities and upscale service at moderate prices. But a cloud hangs over tonight's celebrations.

24:46As waiters arrive with 600 pounds of baby beef, a guest leans over to Conrad. Conrad, what do you make of the recession? Will Texas be affected? Well, it's not here yet, but if it comes, I reckon it'll be short-lived. Texas is built on oil and cattle, not stocks and bonds. But the bad times are coming. In the weeks that follow, reservations at Conrad's eight hotels run dry. The tourists vanish first, then the business travelers that form the bulk of hotel guests. Conrad borrows from American national insurance to ride out the storm. But the Depression just grinds on, crushing more people and businesses under its wheels.

25:32Until finally, it takes Conrad down, too. In December 1931, Conrad goes bust, and American National Insurance seizes his hotels. He seems finished. But then the insurance company offers him a job managing the hotels he used to own, since it has no idea how to run them. Conrad swallows his pride and takes the job, on the condition that if they fall out over how to run the hotels, he can walk away with three of those hotels. The disagreements pile up quickly. The insurer wants savings. Conrad wants to maintain standards. Then, in the summer of 1933, Conrad gets a chance to break free when American National Insurance hands the El Paso Hilton back to its landowner.

26:29The landowner doesn't want the hotel, so he offers Conrad a deal. If Conrad can pay$30 ,000 within six weeks, the hotel's his. But no bank will lend Conrad the money, so he invites friends, family, and associates to invest in a buyer's group that will purchase the hotel. Just in time, he scrapes together the cash and regains the El Paso Hilton. Soon after, Conrad reaches a settlement with American National Insurance that gives him back his hotels in Dallas, Lubbock, and Plainview. From there, Conrad bounces back fast. He uses buyers' groups to acquire hotels laid low by the Depression and nurses them back to profit.

27:18Then, he busts out of Texas and buys upscale hotels in San Francisco and L.A. In 1942, he relocates the Hilton Hotels Corporation to Beverly Hills. The year after, he buys the Plaza Hotel in New York, taking his business coast to coast. In May 1946, with nine prestigious hotels under its flag, Hilton Hotels joins the stock market. By then, Conrad's the most famous hotelier in America. But he's not done yet. Since the Depression, Conrad's kept a picture of the Waldorf Astoria Hotel in Manhattan on his desk. To him, it's the greatest hotel in the world, a 47-story Art Deco marvel that overlooks Central Park, a place where world leaders and movie stars stay, and Conrad's hopelessly in love with it.

28:17Not that Hilton's board approves. To them, it's a loss-making folly that only offers bragging rights. So when Conrad strikes a deal to buy the Waldorf for$3 million, Hilton's board only offers half a million towards the purchase. But Conrad won't give up. He forms a buyer's group and raises the rest of the money. But then, a key investor starts playing games.

28:47The Plaza Hotel, Manhattan, October 1949. In the bar, Conrad checks his watch and frowns. It's 6.30 p.m., and he usually never works past 6. But tonight, there's too much at stake. An investor who promised half a million towards the purchase of the Waldorf is missing in action, and the payment's due tomorrow. Conrad turns to Hilton Hotel's executive, Joe Binns. First he cancels our morning meeting. Now he's 30 minutes late. What's his game? I don't know, but something's not right. Just then, the investor arrives with two other men. Sorry I'm late, Mr. Hilton. These men are my lawyers. Now let's get straight to it, shall we?