Jay A. Pritzker
Jay A. Pritzker was a prominent American businessman known for his significant contributions to the hotel and real estate industries. Born in 1922 in Chicago, he was the eldest son in a family that would establish a substantial financial dynasty. His family's legacy began with his grandfather, who founded a law firm and invested in real estate, laying the groundwork for future successes. Pritzker's education included degrees from Northwestern University and Harvard Law School, and he served as a naval aviator during World War II.
In the post-war era, he identified lucrative business opportunities, notably in the travel industry, leading to the creation of the Hyatt Hotels Corporation, which became a major player in the hospitality sector. Beyond hotels, Pritzker's ventures spanned various industries, including manufacturing and cruise lines, helping to build a multibillion-dollar family empire. His philanthropic efforts were also notable, supporting numerous causes in the arts, sciences, and civic life. After his death in 1999, the family fortune became the center of public attention due to inheritance disputes, yet the Pritzker legacy endures, particularly through initiatives like the Pritzker Architecture Prize and the continuing expansion of Hyatt Hotels.
Jay A. Pritzker
- Born: August 26, 1922
- Birthplace: Chicago, Illinois
- Died: January 23, 1999
- Place of death: Chicago, Illinois
American hotel magnate and conglomerate owner
Pritzker used his professional training in law and accounting to acquire a diverse group of small companies and build them into an enormous business empire. His most notable success was the creation of the Hyatt Hotels Corporation, which not only made him a personal fortune but also revolutionized the business travel industry.
Sources of wealth: Real estate; tourism
Bequeathal of wealth: Children; educational institution; Pritzker Architecture Prizes
Early Life
Jay Arthur Pritzker was born in Chicago, Illinois, in 1922, the son of Fanny Doppelt and Abram Nicholas Pritzker. Jay was the oldest of three sons, and he and his brothers Robert Alan Pritzker and Donald Nicholas Pritzker would later create a family financial dynasty. His father Abram was the son of a Russian-Jewish immigrant who knew the importance of hard work, education, savings, and secure investments. Jay’s grandfather Nicholas Pritzker laid the foundation for the future financial empire by establishing the law firm of Pritzker & Pritzker and by investing the firm’s profits in real estate. After graduating from Harvard Law School, Abram joined the family law firm.
Clearly, family tradition and mutual support played an important role in the success of the Pritzker family, and these values had a positive effect on Jay Pritzker's developing personality and character. Growing up in Chicago in the 1920s also played a pivotal role in his early development. In this “roaring twenties” era, Chicago was experiencing rapid economic growth, notorious gangland violence, corrupt politics, and an ever-increasing immigrant population from Eastern Europe. The city was ripe for individual fortunes to be made, and Pritzker did not waste any time in pursuing his dreams. He finished high school at age fourteen and then attended Northwestern University in Evanston, Illinois, receiving his undergraduate degree in 1941 and his law degree in 1947. During World War II, Pritzker was a naval aviator. As a young man entering into the business world, he relied upon what he called the “Pritzker work ethic” to achieve success—the belief that everyone should contribute to the family’s wealth and not live off the money earned by others.
First Ventures
Pritzker, whose academic training was in law and accounting, spent the early years of his career gaining valuable experience through his involvement in his family’s businesses. By age twenty-nine, he had taken the first steps toward making his personal mark on the business world. He initially bought up small, relatively inexpensive companies and turned them into highly profitable entities. Never content with success, Pritzker was always looking for ways to increase his holdings through additional acquisitions and new ventures.
Pritzker’s early success was partly due to the business opportunities that arose at the end of World War II, a period that brought many changes in the American lifestyle. During the war, women in the workplace not only filled the void left by the men who were drafted into military service but also represented new business markets. In the postwar era, there was a great demand for manufactured goods, automobiles, housing, luxury items, and vacation travel. The travel industry flourished, creating a great demand for better means of transportation and affordable accommodations. Businessmen who were regularly away from home demanded a higher-quality accommodation that would make their stay more comfortable but still be suitable for conducting business.
This desire became apparent to Pritzker in 1957, while he was waiting for a flight at Los Angeles International Airport. Always looking for a good investment opportunity, Pritzker noticed that the airport coffee shop was doing an unusually good business. He also learned that the airport hotel was usually booked to capacity, and he was impressed by the fact that this was the only first-class hotel he had ever seen at an airport. As luck would have it, both the coffee shop and the Hyatt Von Dehn hotel were for sale. Acting upon his instincts, Pritzker immediately made an offer of $2.2 million to buy both, and the offer was accepted. Pritzker was betting that business executives like himself would be willing to pay a higher price for the convenience of staying at a quality hotel close to the airport.
His gamble paid off, and the purchase of the Hyatt hotel in Los Angeles quickly led to construction of another Hyatt hotel located near the San Francisco International Airport in Burlingame, California. With the success of a second Hyatt hotel, Pritzker and his brothers expanded their operations by acquiring additional hotel properties at several major airports across the United States. These acquisitions would eventually evolve into the multibillion-dollar internationalHyatt Hotels Corporation that serves as the flagship of the Pritzker family’s investments.
Mature Wealth
One of Pritzker’s early acquisitions was the Colson Corporation, a financially troubled manufacturer of wheelchairs and bicycles. He and his brother Robert were able to turn the company into a financial success. Similar acquisitions over the years led to the formation of the Marmon Group, a Chicago-based manufacturing conglomerate of more than one hundred companies with a diversity of industrial and service products. In 1967, Pritzker bought a half-finished Atlanta, Georgia, hotel and turned it into the elegant Hyatt Regency with what would become a trademark giant atrium. The success of the Hyatt Regency Atlanta led to similarly designed hotels being built in many other major markets.
However, Pritzker’s investment interests extended far beyond the hotel business. Throughout the years, his family’s holdings combined into a vast multibillion-dollar empire protected by more than one thousand trust funds. A diversity of businesses, land holdings, and interests in natural resources all increased the family’s wealth. In addition to Global Hyatt and the Marmon Group, the group also owned the Royal Caribbean International cruise ship line; the TransUnion credit bureau; Triton Holdings, an operator of marine cargo container ships; and the Conwood Company, a manufacturer of snuff and chewing tobacco. The Pritzker family also purchased Braniff Airlines and was involved in a famous takeover battle for RJR Nabisco. The Pritzkers had an interest in Ticketmaster; Levitz Furniture; McCall’s magazine; casinos in Las Vegas, Lake Tahoe, Atlantic City, and Elgin, Illinois; and AmeriSuites, a chain of more than 140 mid-priced hotels. This structured diversification of business interests and investments enabled the Pritzker family fortune to continue to grow and made many of the family members billionaires.
Legacy
Often cited as the creator of the Pritzker family’s great wealth, Jay Pritzker had a vision of how this money should be used and maintained. It was his wish that the immense family fortune would be protected in perpetuity for the benefit of all family members in a manner respective of their individual ages and status within the family. His vision began to change in 1995, when he designated his son Thomas as his direct successor and placed him in control of the family businesses. Pritzker assumed that under Tom’s leadership, business would continue as usual, but he was wrong. Tom had a different idea of how the family wealth should be distributed. Tom believed that the greatest rewards should go to those family members who made the most significant contributions to the family’s financial success.
Shortly after Jay Pritzker’s death in 1999, his principal heirs decided to divide the Pritzker family fortune into eleven equal shares, each worth close to $1.4 billion. These arrangements would have remained outside of public scrutiny had it not been for a lawsuit filed by Robert Pritzker’s children, Liesel and Matthew. They alleged that their trust funds had been compromised, and they wanted their fair share of the inheritance, as well as punitive damages totaling almost $6 billion. A settlement was eventually reached, but not before turning the Pritzkers’ private family business into a public spectacle, which was not what Jay Pritzker had intended.
Jay A. Pritzker was innovative in business, loyal to his family, and generous to the community at large. He contributed to a variety of charities in support of the arts and sciences and to medical, religious, and civic organizations. There is no way of accurately measuring the effects of his generosity, but his gifts supported many causes and affected millions of lives.
As of 2020, the Hyatt Foundation continued to award the Pritzker Architecture Prize, which was first established by Jay Pritzker and his family in 1979, annually. A pavilion built in Chicago's Millennium Park, which was newly dedicated in 2004, was named after Pritzker to honor his legacy in the city. His family continued to expand the Hyatt Hotels Corporation in the first decades of the twenty-first century, adding further brands and locations. By 2020, eleven of his family members were billionaires, and Hyatt claimed over nine hundred hotel and resort properties worldwide.
Bibliography
Bernstein, Peter W., and Annalyn Swan, eds. All the Money in the World. New York: Alfred A. Knopf, 2007. An interesting insight into Forbes magazine’s wealthiest four hundred people and how they make and spend their vast fortunes. Particular attention is paid to the Pritzker family feud.
Borden, Taylor. "The Hyatt Story: How a Packed LAX Motel and a $2.2 Million Offer Scribbled on a Napkin Spawned One of the World's Biggest Hotel Empires." Business Insider, 13 Feb. 2020, www.businessinsider.com/how-hyatt-hotel-empire-was-created-pritzker-family. Accessed 7 Oct. 2020.
Chandler, Susan, and Kathy Bergen. “Inside the Pritzker Family Feud.” Chicago Tribune, June 12, 2005. A concise yet complete article detailing the lawsuit that threatened the existence of the Pritzker family empire.
Martel, Judy, and James E. Hughes, Jr. The Dilemmas of Family Wealth: Insights on Succession, Cohesion, and Legacy. New York: Bloomberg Press, 2006. A collection of interviews with fabulously rich individuals, examining the various problems encountered by those who have wealth.
Polner, Murray. American Jewish Biographies. New York: Facts On File,1982. A compilation of profiles of more than five hundred prominent Jewish Americans, highlighting their specific achievements in science, medicine, religion, politics, law, education, business, and the arts. A valuable reference source.
Worthy, Ford S. “The Pritzkers: Unveiling a Private Family.” Fortune, April 23, 1988. An in-depth look into the family history and background of one of Chicago’s premier families. Serves as a good foundation for understanding developments in the Pritzker family.