HILTON HOTEL

Hilton Hotel



Hilton Hotel

Introduction

Hilton Worldwide (or 'the company') is a privately held, global hospitality company. The company owns, manages or franchises a portfolio of hotel brands. The company's key portfolio of hotel brands includes the Waldorf Astoria, Conrad, Hilton, Doubletree, Embassy Suites, Hilton Garden Inn, Hampton Inn & Suites, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations. The company operates more than 3,750 hotels in 84 countries around the world (HHG, 2012a).

Headquartered in Virginia, USA, Hilton Worldwide has about 130,000 employees and was originally established in 1946 as Hilton Hotels Corporation. The Hilton system includes hotels that are owned, managed or franchised. Hilton also operates a number of vacation resorts in the United States. However, the company has wound back its involvement in casinos. A private equity company, the Blackstone Group LP, acquired Hilton Hotels for $26 billion in October 2007 (HHG, 2012b). Little detailed financial information is now released. Hilton Worldwide operates several brands, including Hilton, Hilton Garden Inn, Doubletree, Embassy Suites, Hampton, Homewood Suites, Home2 Suites and Conrad.

It has a timeshare operation that trades under the name of Hilton Grand Vacations. By the end of 2013, 100 Home2 Suites are expected to open across the United States, Canada and Mexico. In 2010, the company operated 512 hotels with 115,000 rooms in 32 countries. In 2009, the company added over 300 hotels to its portfolio, with a pipeline of more than 900 hotels under development in 57 countries. In 2008, the company controlled 95,500 hotel rooms operating under its various brands (HHG, 2012b).

Recent hotel performance has been adversely affected by the global recession, particularly the harsh slowdown in the US economy and the rapid spike in unemployment. Travel for all purposes fell, resulting in a slump in room demand. This led to significantly increased discounts on room tariffs in a bid to maintain cash flows. At September 2006, Hilton Worldwide system consisted of 2,895 properties with 96,500 rooms (HHG, 2012b). Its development pipeline included 775 hotels with 45,000 rooms, with about 90% of these in the Americas region (including the United States, Canada, Mexico and South America) (HHG, 2012c). In October, the company announced plans to establish a 360-room Doubletree Hotel in Tianjin, China, which would be the initial entry of this brand in this market.

For 2006, revenue from owned hotels increased by 23%, but leased hotel revenue was flat at $2.3 billion, management and franchise fees rose by 51% and timeshare and other income was up by 27% (HHG, 2012a). Revenue increased by 51% from managed and franchised properties. Total expenses increased by 89% and net income by 24% (HHG, 2012a). The results were affected by its previous acquisitions. Third-party online agency bookings remained flat at 3%.

Growth Strategies

Hilton Hotel Group has undergone mergers and acquired hotels in different countries to boost its business and gain market share. Hilton Hotel Group is extensively focusing on increasing its number of hotels that will enhance the market presence of Hilton Hotel Group brand and its ...