Joseph Lutz closed out the semester on Wednesday during the "In the Executive's Chair" course at California State University, San Marcos.
As a college student looking for extra cash, Lutz worked as a dish washer and moved his way up a franchise to director of operations. After 35 years in the food and beverage industry, Lutz is now senior vice president of operations for HMSHost Corp.
HMSHost, formerly known as Host Marriott Services, contracts and operates food and beverage brands in 90 airports across the country. The company has made $2.8 billion in annual sales with 30,000 employees.
During the trip up the executive ladder, Lutz said his leadership style has changed from tactical to more strategic.
Lutz currently oversees 28 airports the western region, along with five in western Canada, one in Anchorage and three in Hawaii. Due to the seasonal nature of the business, Lutz manages anywhere from 11,000 to 14,000 associates, 475 managers and 26 direct reports.
With the number of employees Lutz manages, he found lack of motivation is either a training or a culture problem. Lutz said it is different to push someone who does not have the tools to do the job than someone who just does not want to do it.
Lutz told students they must apply everything they have learned in college to the reality of the work world.
“I think there is no substitute for hard work,” he added.
Lutz knows the effort of going the extra mile first-hand in his current role.
HMSHost has a unique business model due to the infrastructure, requirements and standards of airports. Lutz said the building procedures are “much higher than building on the street.” As a result, construction in an airport costs three times more and also takes longer due to security measures.
Airport security has affected travelers as well as HMSHost. After being down 20 percent to 25 percent in sales weeks after the Sept. 11, 2001 terrorist attacks, things started to look up in the following months due to a number of changes.
While travelers began arriving earlier for their flights, Lutz said, “now people that were drinking one drink -- are drinking two drinks. So we doubled our sales.”
There was also a shift from quick-service to full-service restaurants, which averages higher checks.
Also, the way people walked through the airport changed so the company studied the travel path of passengers. These zones helped the company relocate their operating brands to support traffic and offered more “grab-and-go” purchases since meals were no longer served onboard.
As for the future of the business, according to Lutz, HMSHost is in the middle of an acquisition. The company is also “looking for several more to acquire over the next seven years,” he said.
HMSHost has its eye on the Pacific Rim and India as the company recently opened an office in Singapore.
Along with moving more toward casual dining, HMSHost is developing new brands and concepts. Lutz said they want to “come up with new, sexy things” such as creating “a fun, happening place” to go to in the airport.
Lutz also said there is a trend to bring local brands, concepts and people so that “when you come into San Diego airport, you’re seeing San Diego.”
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