Not much has changed since last week. I'm still in a hotel. I still hear the housekeeping and maintenance staff hard at work.

I'm still writing on the hotel room couch while my daughter's taking a nap. (I admit, I'm not very good at vacations).  

But one big thing has changed since last week: the CEO of Hilton Worldwide has apparently had a change of heart, after his comments about how much he tips in hotels got a lot more attention than I think he ever expected.

Background: I wrote yesterday about the surprising admission that Hilton's CEO, Christopher Nassetta, made at the tail end of a conference at the 41st annual NYU International Hospitality Industry Investment Conference.

"I typically do not leave a tip," Nassetta said, as reported by The Points Guy's Melanie Lieberman, after host Andrew Ross Sorkin asked how much he normally leaves in hotels as a gratuity. 

Should we tip?

His comment was controversial, probably for two reasons:

  • Reason #1, the reaction among travelers (and travel writers and bloggers) pointing out the irony of a $19.8 million-a-year hotel CEO publicly announcing any hesitancy to offer tips to employees who make -- to put it lightly -- a lot less.
  • Reason #2, the economic fairness point of view, which is that in general, tipping is a horrible compensation structure, since it absolves employers of the need to pay what would otherwise be market-rate salaries, and relies on customers' voluntary, non-standardized contributions.

In other words, if you wanted to design a fair and workable compensation system, one of the last things you'd want to do is to base it on tips. 

But since we don't as individuals get to design the whole system, the least we can do seems to be to participate -- and provide the tips that a lot of service workers rely on.

'About as low as you can go'

I wasn't at the conference; as mentioned, I'm on a sort of Bill Murphy Jr.-style, workaholic vacation. But, reading closely, it seems the question was asked toward the end of Nassetta's appearance, in which Lieberman says he'd: 

"just spent half an hour telling a ballroom packed with more than 2,000 hospitality industry professionals how he had worked his way from "about as low as you can go"-- specifically, a junior-level engineering position at a Holiday Inn where he used his plumbing skills to deal with "code browns" -- and how the key to Hilton's runaway success has been the company's focus on people."

So without having seen it firsthand, it strikes me that Nassetta's comment was what we often call a "gaffe" in the political world (the definition of "gaffe" being something like, "accidentally telling the truth.")

As Hilton had originally said in providing context to Lieberman: "It's Chris's view that every Hilton Team Member works hard. Rather than selectively reward some Team Members, he is focused on providing meaningful economic opportunities for all 400,000 Team Members."

So, I think I get it. If I can paraphrase: Why are you so focused on whether he tips a few dollars in an envelope?

Why not focus instead on the fact that, as the rest of their statement put it: "Hilton is the No. 1 place to work in the US and No. 2 in the world, as voted by our own employees."

'Going forward'

Still, for many outsiders, myself included, it's the symbolism.

It's the way the whole thing sounds like an attempt to thread the needle between Reason #1 and Reason #2 above -- which is a very difficult needle to thread, even if you're not the head of one of the most valuable hotel chains in the world.

On Saturday morning, after my original story published and while I was still on vacation, I heard from Hilton, wanting to share with me a new statement Nassetta had released, in which he says he's changing his personal policy.

"When it comes to tipping in hotels, I have always had a different approach to work and personal travel. I also never meant for my approach to work stays at Hilton properties to discourage others from tipping when they are traveling," Nassetta's statement began. "Going forward, I will tip when traveling for both work and personal travel."

(The rest of his statement is at the bottom of my original article.) 

So, bottom line: If you're traveling, and if you're relying on the services of people who expect you to tip, tip. And if you think we should work toward a better economic structure in which people don't rely on tips, by all means speak out.

Just don't think your objection to the system overall absolves you of the obligation to participate, as long as it still exists.
 

Published on: Jun 9, 2019
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