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Interview with an Industry Icon - Mike Leven, Part Two

Here is part two of one of the most in-depth wide ranging interviews we have ever conducted.

Tuesday, February 26, 2013
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Today we have for you part two of a two-part interview with Mike Leven, President/COO of Las Vegas Sands. In his role at Las Vegas Sands, Leven has transformed the company from being on the brink of collapse to arguably the most powerful gaming company today because of its role in Asia – and possibly soon, Madrid.

But this incredible feat is just the encore to an iconic career. For you young folks out there, today is going to be a major history lesson. Leven’s 50+ year career cast is as a central figure in the development of the modern hotel industry, and his fingerprints are everywhere. From his days running brands such as Holiday Inn and Days Inn to creating his own hotel brands like Microtel, Leven has literally done it all. He even combated racism and discrimination throughout the 1960s, which culminated in his helping hand in creating AAHOA, which is now one of the most powerful industry associations.

I highly encourage you to listen to the audio of this broadcast as it’s an incredible hour worth hearing. Here’s an idea, download it and listen to this interview on your commute home. You won’t regret it.

Today we focus on areas beyond gaming including the creation of AAHOA and what he thinks people are doing right and wrong in the hotel business.

So you know who is speaking today, we have both Editor-In-Chief Glenn Haussman and co-host Mark Viola taking part in this exciting conversation with Mike Leven. For context, we did the interview on February 9, 2013 in a bagel shop for a Saturday morning breakfast about 25 minutes off the Las Vegas Strip. So do not be confused by any conversation regarding omelets.

The Creation of AAHOA

Glenn Haussman: Now for those of you listening who might not know Mike Leven like we do here, he is one of the founders of AAHOA, the Asian-American Hotel Owners Association, and really created that organization with the folks at a time when those individuals were really discriminated again, had a lotta issues even being acknowledged almost as human beings by some people in our society, but now, boy, oh, boy, have they come so far. How does that make you feel and where do you think the Asian-American community is now with hotels in our country?

Mike Leven: Well, I think it’s the most important thing I’ve ever done where I was really one of the two or three leaders who did it and put it together, and because I’ve always thought discrimination all the way back to my college days. I marched around for civil rights in the ’50s. I interracially dated in the ’50s when people didn’t.

Glenn Haussman: Wow, that must have been something.

Mike Leven: I also was in the theatre at Tuffs University, and so I always treated people the same, and I couldn’t stand any kind of discrimination, had some against me myself. There were hotels that I was actually sending business to when I was with Sonesta and we had a relationship with Distinguished Hotels of the World. They wouldn’t take blacks, wouldn’t take Jews in the early ’60s, so I had those kind – I had lots of experience with that personally, and so anytime I can I fight against it, and today I’m giving a lot of speeches writing out at this about our immigration situation.

I find it’s abhorrent that there are 11 million undocumented people in this country who’ve been here many years, most of them, and we – and the politicians are trying to fix it and getting nowhere and they should fix it, and I’m beating my drum on that. So it’s just part of my DNA, and with the AAHOA I would say I get this a lot. “What’s the single most important thing you’ve done?” I think AAHOA is the single most important thing.

Glenn Haussman: You must be so proud to see that the second generation now is really taking over, and the excelling in ways that I’m sure that you guys weren’t thinking back in the – back 25 years ago, right?

Mike Leven: It’s funny ’cause it’s sort of comparable to my own career. I never thought about where people like Jay Shah and Neil Shah at Hersha Hospitality and Mitch – these people who are brilliant business people, highly ethical, very accomplished guys, I never thought about that generation. What I thought about was if a guy comes over like H. P. Rama, and he and his wife are working in a 50-room Howard Johnson and wants to expand his business and can’t get a franchise from Trace Hotels or from others at that time because they wouldn’t give them one, and so there was no indication – there was no strategy to me of making the second generation. The mission statement of the original AAHOA was for these individuals to take their rightful place in the industry.

Glenn Haussman: Right.

Mike Leven: I don’t think that’s still the mission anymore because they already have achieved that, so – but that was the mission then.

Glenn Haussman: Right. Yeah, the mission now is – they actually seem to be changing it a little bit to become more of a social organization in a lot of ways, and I think that’s actually a compliment to what you’ve done and what they’ve managed to achieve because you don’t need to be considered separate anymore because they’re so involved. They’re so equal that they can finally go pursue other things.

Mike Leven: The reality is that AAHOA may not even be necessary other than as a social organization. Lots of times in the old days discriminated groups would form their own social clubs because they’re – they wouldn’t be – they couldn’t do anything.

Glenn Haussman: Right. Yeah.

Mike Leven: This was a business organization to drive – get their rights and it really worked. They’ve done great and the second generation and third generation people of this people or this – from these Indian mostly people, they’re in the society now. They’re governors of state. Now I see Nikki whatever her name is in South Carolina and Bobby Jindal, who I’ve met, in Louisiana who are American – of Indian origin – not Native American, Indian origin – and they’re there, so that’s great and I tell you one story about that this.

When I started at the Roosevelt when I was in sales they gave me all these accounts. They give you a whole – they were doing cards called DEBO cards at that time and, of course, half the guys in there were dead because a new sales guy get the worse accounts, so – and there were cards in there that said National Legal Association, National Medical Association, and they had three Xs next to the name, and this is not three Xs like a movie. This is three Xs next to the name ’cause it was in the early ’60s those movies went around anyway.

So I went to the sales director, and I said, “What is – what are these three Xs?” And he said, “Oh, that’s a Negro association.” So I said, “Well, so why do you identify it with three Xs?” He said, “You can only book those things in July and August.” This was New York City, only book in July and August. I said, “Why?” “Because we can’t mix them with the regular – with the rest of the clientele.” Nineteen sixty-one.

Glenn Haussman: You have seen so much societal shift in your life. When you think about those early days when you were demonstrating for civil rights compared to what it is now, what do you pull away from it?

Mike Leven: Well, I think from a civil rights standpoint we’re as good as we could possibly be. It disturbs me a little bit that now political correctness has sort of taken over everything, and if that’s the result of walking around and marching for people’s rights really it’s not very good because now you can’t say anything, you can’t do anything, you can’t fire anybody, you can’t hire anybody ’cause you’re afraid to do it, and so we’ve given – all individuals in our society, no matter what their gender, no matter what their sexual preference is, no matter whatever, have rights today that they didn’t have when I started in the 52 years I’ve been around, and watching that is a joyous experience for me because it’s part of my DNA, too, but I worry about the focus of what’s going on in terms of how people now are missing stuff because of it. I wake up in London, I put on the television set, and the big headline is Parliament is voting today on gay marriage. That’s the big headline, and so we still haven’t gotten to a point where gay marriage should not be an issue, and it just shouldn’t be an issue.

Glenn Haussman: But I think we’re finally at that big change. I think five years from now it’s not gonna be an issue. Five years ago it was hardly – it wasn’t even thought about.

Mike Leven: And then I ask myself, “Do those issues ever end?”

Mark Viola: No, I don’t think they ever will.

Mike Leven: They won’t.

Mark Viola: We’re gonna have them till the day I die.

Glenn Haussman: Yeah, I think part of that is because it’s a distraction from everything else that’s going on in our lives, and it’s easy to focus on certain issue and not have to tackle some of the real most significant ones.

Mike Leven: That’s the thing I was talking about with the dead horse before because if you’re always looking for – to try to find a lighter rider the horse is still dead, and I’d say it’s – Roe v. Wade is not gonna be overturned. It’s enough already. Let’s just go on. Let people adopt. Let’s reduce the number of abortions by doing that if you’re anti-abortion, but for God’s sakes, stop focusing on it. It’s not gonna happen.

And so I just think people sometimes – that freedom and opportunity sort of makes the noise level so much higher, and then we’ve got so many economic problems. As I said before or I mentioned about when we were talking about Spain, if you – I was – there were less than 50 press standing there at the press conference yesterday when the President Gonzalez announced that this project was gonna take place, and the looks of the people’s face, these were not 50 people sitting there like normal at the White House trying to gotcha the president. These were 50 people sitting there with a look in their lives like there’s maybe some hope economically. Maybe something’s gonna turn.

Mark Viola: That’s awesome and that’s gotta make you feel good.

Mike Leven: And, oh, and I’m sitting there. I told Sheldon. I sent him a note. He was on a plane when I was on the plane and the Internet worked on both planes, and I sent him a note from my plane. I said, “I wish you could have been there to feel it.” And so that’s so much more important that whether – what – the headline about the Tories are still against gay marriage and this one is for gay marriage. I always say, “Listen, I don’t care if a guy wants to marry his dog. Doesn’t make any difference to me. If they wanna do it, let them do it.”

Glenn Haussman: Right. No, you’re right. You’re right. Exactly.

Mike Leven: But here when you can have the opportunity like AAHOA to do something that is – and I know many of the Indian people – Indian Americans who I see is a second or third generation, I went into them and they walk over to me and they talk to me as if like I did something legal, and that’s a great feeling.

Glenn Haussman: It is, and, Mike, that’s because you did something real. You really – you’ve been one of the most impactful people, I think, on the entire hospitality industry. If you and the other guys didn’t come around and create AAHOA I can’t imagine where that community would be and how they would not have achieved the level of prominence that they have.

Mike Leven: I think they would have gotten there, but the painfulness – and, by the way, you know what else would have happened? If that continued, if you continue to drive and see a billboard up that said American-owned, which we’ve got now, they would have left the business, and who would have lost? Not them. We would have lost. They’ve accomplished.

Glenn Haussman: I would say our society.

Mark Viola: Yeah, absolutely.

Mike Leven: So, anyway, I – for me the – you can say how – where did – I always ask myself, “Where did that come from? How did it happen?” whatever. It’s just a challenge to me to do something. I’ve worked very, very hard on this Spanish thing and, as I said, I was talking to a major media guy day before yesterday on Thursday, a wonderful guy, and – ’cause he wants to do a film, and he wants to do a film of a human – the human impact of the story, not the physical, not the money, not this, and I was right with him, and I said, “That is a story.”

When you talk to the unemployed construction worker, when you talk to the college graduate who wants to go into accounting and has no jobs and we can give them jobs, or you talk to the IT person or you talk to the vacationer for getting a different experience and viewing the culture and whatever, and I said, “That’s really the impact.” And that’s the great – Sheldon Adelson is a multibillionaire today, and he really enjoys his money – there’s no question about that – but when he even thinks about – he said to me the other day, he said, “I have 50,000 employees.”

Glenn Haussman: That’s spectacular.

Mike Leven: I said, “And, Sheldon, you created 50,000 jobs from zero.”

Shedlon Adelson Is a Major Donor

Glenn Haussman: Right. And, might I had, gives away millions and millions and millions of dollars.

Mike Leven: Nobody wants to talk about that. They wanna talk about he’s a casino mogul; he’s this and that. I’ve watched – listen, I’m up close and personal to every single thing he does, and if you ask me what about this experience, I’d say, “Look, he is very hard to work for because he’s so material, but he’s a good man with a big heart and watching him do things, I listen to things he does, people he takes care of and whatever and generous, and it’s just not a story for the media. They don’t pick it up.

Glenn Haussman: No, but let me tell you as someone in the media I believe last week he gave away $50 million for education. He’s built –

Mike Leven: Two schools.

Glenn Haussman: Right. He’s built cancer hospitals out there in Las Vegas.

Mike Leven: And he built a senior life center for older people, a research center in Boston. He’s a ferocious Zionist and he’d say to you, “I’m an American first, a Republican second, and a Zionist first, too.”

Glenn Haussman: Yes. I’ve seen some of his political givings in the last year or so, so, yes, we know he’s definitely Republican.

Mike Leven: Listen, when somebody asks him, “How you feel after you’ve spent all that money and went zero for eight?” and he said, “I’m disappointed but not discouraged.” And I’ll continue to do what he thinks is right, and if there’s any negative you can have about Sheldon that really people focus on is that when he believes he’s right he’s gonna fight till the death, and sometimes he may not be, but he’s gonna fight for his belief.

What Impresses You in Today’s Hotel Business?

Glenn Haussman: Is there anything going on in the hospitality business at large that you think is really impressive, that you could take lessons from or just show us really good examples of what’s happening in the world of hospitality?

Mike Leven: Well, I think I’ve always been somewhat a critic of the hospitality business. I don’t know if I get known for that because people are somewhat general with me, but I’ve never thought we’ve satisfied enough of our customers. Surveys that I used to do showed a 65 percent satisfaction rate. I think we moved that in the major change up to about 80, but I still think that 1 out of every 5 isn’t satisfied and it’s not enough.

We need to get into the 90s and we need – somehow we need to fix front desks. We need to get the front desk arrival and departure system better. We’re trying but we’re still not there yet. We’re not Hertz. We don’t run it like Hertz with your rental car. There’s gotta be a way, and I keep asking for it and I haven’t seen it, the technology to do it.

Glenn Haussman: I’m starting to see it, Mike, because when we were at the Hyatt Grand in Union Square in San Francisco a couple of weeks, and you guys should listen to the NEWH show, all about design and female hoteliers –

Mike Leven: I was at the Hyatt Grand in Union Square a couple – about two months ago.

Glenn Haussman: Really? Maybe since then they’ve implemented a system where I got an e mail ping saying, “Hey, would you like to preregister?” I registered on the plane, and I got hit back another e mail, “This is your room number and just go to the kiosk and get your key.”

Mike Leven: I haven’t seen that. That’s a good start. By the way, I think they check you in at kiosk. They do that there.

Glenn Haussman: They do as well.

Mark Viola: That is correct.

Mike Leven: I noticed that when I got there, but that’s a step forward. That’s a very big area of opportunity for the business. I think on a macro basis there are other things that my mind predicts that I think are gonna happen in the business. The big companies like Starwood, Marriott, Intercontinental –

Glenn Haussman: Hilton.

Mike Leven: – Hilton, those companies I think there’s gonna be some real strategic change in those companies going forward. I think all this new brand stuff is – to me is – I don’t wanna give you the word. I’m on the _____. I think it’s ridiculous. I mean in order to have a brand work you need enormous scale, and but the brands are looking for opportunity to new revenue. The franchisees and the owners are looking for profitability, and unless they can have profitability in the properties they manage and in the franchises they give, there are gonna be changes in those situations, but in order for those big companies to make more money, to get better earnings, I think they’re gonna have to change or modify from a management franchise strategy back to an asset owner.

Glenn Haussman: Really?

Mike Leven: I really believe that you’re gonna see some people – maybe Hilton will start that at some point in time. Somebody will start it where they’ll start to pick up assets in major urban markets, improve their position in major urban markets where the risks are less, the investments are more, and start to improve and then eventually maybe even financially split those companies up so that you have an asset company, like Marriott did with –

Glenn Haussman: Right. I remember when this happened in the mid-’90s.

Mike Leven: Yeah. You go back into those kinda situations or even split up the franchise and management fees into a different area, something that smarter financial people than I will find a way to do because they’re so big, these companies, today, and I don’t believe they can drive their numbers very – I mean it takes hundreds of hotels to drive the numbers, and so I think you’re gonna see some of that over the next four or five years.

But I think – I hear rumblings with franchisees that I meet that companies are stepping on and asking for more stuff, more and more design, more technology orders, and the profits keep going down.

Glenn Haussman: Yeah. All these poor owners they seem to be getting pinched. The amount of amenity creep that’s been going on in the last number of years is –

Mike Leven: Oh, it’s been going on for 20 years.

Glenn Haussman: Yeah, and I feel like it’s accelerating.

Mike Leven: One of the things that I beat my gums about and I’m – I just changed it in the Venetian, and I don’t know what you’re saying, but in the Venezia Tower we just did the 1,000 rooms over, and I took out duvets. I think the duvets are probably the worst invention of all time.

Glenn Haussman: Really. That is the most terrible design touch of the last few years.

Mike Leven: The duvet, first of all, creates more heat.

Glenn Haussman: Yes, it does. In Marriott that is the hottest bed on the planet.

Mike Leven: The hottest bed, yeah, and not for the same reason it should be.

Glenn Haussman: I know. I can’t tell you how many nights I cried myself to sleep because of that.

Mike Leven: Oh, yeah. But the other night I’m sleeping in London in the Intercontinental. I wake up. I’m sweating and I’m under the damn duvet. The next night – no, no, this was in Madrid. I am under – it wasn’t a Westin. I am under the duvet and I’m sweating. The next night I threw the damn thing on the floor and slept under the sheet, and so it uses more energy.

It’s a pain then, so I developed in the Venezia Tower a non-duvet bed, and we did a lotta research, whatever it is. I haven’t had one single complaint. I’m sure my energy cost is down. By the way, there’s also a laundry cost associated with it that’s higher as well, so I mean it’s time. It’s time guys in the business to really start to look at that ridiculous thing.

Glenn Haussman: It’s funny. You’re the first guy that I’ve talked to that actually talked about energy costs because it’s true. You’re so hot under that bed you lower the temperature so much to kinda compensate for it.

Mike Leven: Exactly. That’s exactly right, exactly right. Think about this. There are how many million hotel rooms with duvets, and think about the temperature being lowered in every one of the rooms when they’re occupied.

Glenn Haussman: Just in the rooms of the Venezia Tower. I can’t even imagine, and then 7,000 in the whole complex. I can’t imagine how much money you’d save.

Mike Leven: So I think you’re gonna see some more design changes and all the gimmicks. The hotel business it’s not about the gimmicks. Well, you need to know I do like the fact that now you can put an iPad, stick it in the phone, and it connects to your bed, an iPhone like that.

Glenn Haussman: Yep, iPhone or iPad.

Mike Leven: That’s good. You don’t have to look at it, but so many of these things, lighting and all this kinda stuff, there’s still a long way for the industry to go to get it right, and it’s not as about as design as it is about the pragmatic use of most hotel ones. When you’re in the five- and six-star category design becomes far more important, but when you’re in the four- and three-star category it’s practicality that – and that’s where Marriott won for a lotta years in their practical design.

Glenn Haussman: Yeah, very true, but what I like about let’s just say Venezia and Palazzo since we have a good common ground with that, I love that Palazzo opened up the master light switch, so I feel as a guest I can have a well-lit room and then not have to spend 20 minutes shutting lamps off all the place, right? And then the worst part is just even trying to find out where the switch is on each lamp. I wish they would – that would just be industry standard. I don’t know if it’s here. I don’t know if it’s up there.

Mike Leven: I’ve been lying in bed and trying to find it and the thing is behind the lamp, so I’m reaching over there, and they could film that stuff.

Glenn Haussman: I love that, and I think Venezia was the first hotel I saw with the shades that opened up automatically. I really loved that little –

Mark Viola: Yeah, that’s highly cool.

Glenn Haussman: I love – and this is gonna sound so silly – I love that when I’m sitting at the desk that the chair is the right height for the desk. I mean I don’t get that in a lot of places either and I really just love the space.

Mike Leven: We walk through it and see some things that we still have to do better, but if you have a customer focus rather than a designer focus then you’re gonna figure it out. The Venetian puts TVs in the bathroom and many things in the bathroom. In the Venezia Tower I didn’t put them in.

Glenn Haussman: Really.

Mike Leven: The reason I didn’t put them in was that I found that through all my travel if you put the TV on in the room and you have a speaker in the bathroom it’s fine, but I mean have you ever tried to shave and watch TV at the same time if the TV’s right there?

Glenn Haussman: Well, you can tell I don’t really do much shaving, but I get your point anyway.

Mike Leven: You don’t have to do tricks. You have to be basic. You have to serve the basic needs, and I think that’s what happens when you get so far away from the customer that you begin satisfying your internal constituency and not the customer.

Glenn Haussman: So how would you then make sure that doesn’t happen when you’re running an organization?

Mike Leven: What we do now is we do a walkthrough. It costs money and it costs time, but we do a sample. When we build the room according to the design, then we walk through it, lie in it, do it all the way from the Kleenex all the way to the bed and to the light switches and everything like that, and until that’s right – so we’re gonna do it in Singapore. We’re gonna do it in Spain. Any new product we build sample rooms with everything. It costs a lot more money and it also holds it up, but we want – in May I’m looking at a new room in Macao and a new room in Singapore say from now to May they’re building so we won’t make those mistakes.

Glenn Haussman: Well, I can’t believe they’re doing a new room in Singapore already.

Mike Leven: You mean already. Yeah, three years they’re wearing out.

Glenn Haussman: Wow. That’s unbelievable, and I think that’s a real testament to what’s been going on at the resort. We’ve been going here almost an hour, if you can believe that. Is there anything that you’d like to add before we wrap up?

Mike Leven: Glenn, I’d just like to say, look – I’ve said this in a couple of speeches mostly already. My hope is that if anybody coming into this business can have anywhere near the kind of experience I have, it will be a wonderful thing, and the more people that can, the more people that should. I will say this, though, and I’m a big believer in a liberal arts education, and I do think that the key to success is the way you manage people, handle people, understand people, whether it’s a customer or fellow employee or a boss, and if you can’t do that then you won’t get there.

You just won’t get there, and one sales – when I was selling in ’63, I sat with a guy from the paper and pulp industry. I was working for Sonesta at the time, and after the lunch, the very kinda guy who smoked a pipe, very highly in on the technology guys. I don’t know anything about it. This is engineering. And after the lunch he said to me, “Mike,” he said, “You’re the first salesperson that didn’t talk about Mickey Mantle’s batting average.” And I said, “Herb” – I never forgot it. I said, “Herb, it’s 314.”

Mark Viola: Yeah, that’s awesome. I love that.

Glenn Haussman: It’s great.

Mike Leven: So learn, educate yourself, be available to be able to discuss things like business and politics and economics and theater and literature and all these kinds of things because it’s just gonna help you everywhere you go talking to people and relating to people and understanding where they’re coming from, so the world is your oyster in this business, and I hope people stay in it and get what I get.

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