Marriott International, with more than 30 brands, is the undisputed leader in the world’s hotel orbit.
Still, Hilton leaders on Wednesday morning outlined a growth strategy that signals why its cross-town rival in the Washington, D.C., metropolitan area shouldn’t get too complacent in its position. his nobility.
The hotel giant behind brands like Waldorf Astoria, Conrad and Home2 Suites has a series of new brands and partnerships that will add thousands of new hotels and the Hilton Honors loyalty program in the coming years. next year. Hilton’s roadmap for 472,000 hotel rooms worldwide is still far behind Marriott’s 573,000 room roadmap reported late last year, but Hilton’s leaders still have bragging rights.
Christopher Nassetta, CEO of Hilton, said: “About half of our pipeline is under construction and we continue to have more rooms under construction than any other hotel company, accounting for more than 20% market share in the industry and nearly 4 times the market share of our existing supply.” during the company’s earnings call on Wednesday.
Where does Hilton’s growth come from?
In just the past few months, Hilton has acquired two brands and formed two new partnerships to provide Hilton Honors members with new ways to earn and redeem points.
Acquisition of Graduation Hotels by Hilton, a brand focused on university and college environments, brings to the portfolio a distinctive lifestyle option that Nassetta said Wednesday could eventually have as many as 500 hotels worldwide. gender. Currently, this brand has a little more than 30.
“Graduation provides a unique opportunity to serve more guests, especially in markets where we are not present today,” Nassetta said.
The company also acquired a controlling stake in Sydell Group, the parent company of NoMad Hotels, earlier this month to enhance its presence in the luxury lifestyle hotel space — occupied by brands like Marriott’s Edition and Hyatt’s Thompson Hotels — by 100 hotels. This acquisition is a departure from Hilton’s “build it, don’t buy it” ethos of launching new brands organically rather than acquiring them.
Both deals were cases of Hilton getting involved relatively early before significant global expansion. NoMad only has hotels in London and Las Vegas, but the Sin City property is not part of the deal and will eventually change brand affiliation.
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“What is the morality of? [Sydell Group founder and CEO] Andrew Zobler and his team have created an image that epitomizes what we think is today’s modern luxury lifestyle and speaks to what customers are looking for,” Nassetta said of NoMad. “It touches to every button for us in making sense, but yeah, it’s very small. The good news is it’s very small, we don’t have to pay a lot for it and that means organic growth will be huge going forward.”
It’s not just the luxury segment that’s driving Hilton’s growth. Of the company Spark the new premium economy a brand that Nassetta predicts will eventually become Hilton’s largest by assets. The brand grew out of converting existing hotels into the Spark brand, and Hilton leaders previously told TPG that there are “tens of thousands” of conversion candidates for Spark worldwide.
Hilton accounted for 40% of all conversions in the US last year, Nassetta claimed, specifically highlighting the Spark, DoubleTree and Tapestry and Curio collections as drivers there.
In terms of new construction, Hilton’s Home2 Suites has the most projects in various stages of development in the US, according to a report last year from Housing econometrics. Marriott’s TownePlace Suites came in second place.
Partnership drives Hilton Honors engagement
Hilton also pulled one out Small luxury hotels of the co-op world left Hyatt earlier this year and announced a in partnership with outdoor lodging brand AutoCamp. Both agreements provide significant opportunities for Hilton Honors members to explore more unique travel opportunities within the Hilton ecosystem. It’s hard to stop there.
“What we’re doing with SLH, what we’re doing with Autocamp, you’ll see more of… not Graduation [Hotels]-kind of everything but more partnerships, especially in the experiential space,” Nassetta says. “Think areas like safaris and river cruises[s] because we know these are complementary travel experiences that connect to our business, give our customers something incremental to engage with us, and don’t conflict with our business. us in any way. We think it’s synergistic.”
Nassetta said the percentage of Hilton Honors members accounting for total occupancy at Hilton hotels hit a record high of 64% in the first three months of this year. The plan is to increase that number to 75%.
While not providing further details on how the company plans to reach that lofty number, Nassetta hinted at one area of opportunity: providing geographically specific services to meet Travel patterns and behaviors vary around the world.
Don’t abbreviate Marriott
Hilton has kicked off hotel earnings season with a bang, and there’s growing industry chatter that the company is on track to surpass Marriott this year in loyalty memberships. That’s entirely possible, but this race is far from over.
Marriott’s new partnership with MGM Resorts leverages the Bonvoy loyalty program at some of Las Vegas’ most popular casino resorts and other MGM properties across the United States. Other industry whispers note that even if Hilton Honors surpasses Marriott Bonvoy in membership, the widespread belief remains that Bonvoy members spend more at a property.
Does bigger mean better?
We’ll wait and see how loyalty membership and pipeline affect Hilton’s top competitors over the next few weeks and report back.
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