Donald Trump and the Invention of Charismatic Finance – The Atlantic

5 months ago Comments Off on Donald Trump and the Invention of Charismatic Finance – The Atlantic

But Stevens was also an innovator in the game of wooing and managing investors. Before Stevens, hotel design was mostly the product of a conversation between investors and their architects. Stevens inserted himself, the hotel manager, into the process, essentially inventing the occupation of hotel developer and using it to reorder the power relationship among people who designed, financed, and ran hotels. As historian Molly Berger describes in her book Hotel Dreams, Stevens used this new role most fully during construction of the Continental in Philadelphia. Though investors balked at many expenses, especially a pricey elevator model, Stevens kept them in line and ultimately won all the concessions and funding he required.

Paran Stevens was the greatest hotelier of the 19th century, but at the dawn of the 20th, E. M. Statler changed the hotel game completely. His slogan “a bed and a bath for a dollar and a half” identified two radical shifts to the traditional business model. Every room would have an attached bathroom, making travel more amenable to tourists and families, and the price was a bargain reached through efficiency and economies of scale. For example, he invented the “Statler plumbing shaft,” the concept of stacking bathrooms on top of each other in a building so that sets of pipes could run straight up and down, making construction and maintenance cheaper and easier. This innovation was quickly adopted in all sorts of large-scale construction, including, probably, the building you are sitting in as you read this article.

In the past, top hotelkeepers had boosted profits by increasing luxury, raising costs, and targeting wealthy customers, but Statler, by appealing to a broad and growing middle class, found a way to make a lot more money. To do all this, Statler found no need for new forms or strategies of financing; product innovation moved forward swiftly without any financial innovation. The same is true of Conrad Hilton, the greatest hotel developer of the Cold War era. As Charles Harvey and Mairi Maclean show in a forthcoming book, Hilton built on Statler’s innovations (and eventually bought his chain),developed the concept of the airport hotel, and spread American-style hotels around the world as representatives of freedom and democracy and bulwarks against Communism. Product development, perhaps, but not financial development.

Donald Trump and the Invention of Charismatic Finance – The Atlantic}