Hilton CEO on new brand and booming Hilton Honors loyalty business

When Hilton CEO Christopher Nassetta took the helm at the hotel giant in 2007, the company wasn’t exactly known for its groundbreaking thinking or trendy brands.

“We’re complacent. There’s no culture of innovation. It’s a culture of doing it at a relatively slow pace and doing it the way we’ve always done it,” Nassetta said. once told the Washington Post. “It’s just not organized properly.”

But fast forward 17 years, and Hilton has become a hotel group to reckon with. The brand has more and more to offer for every type of traveler and every budget.

Luxury camping? Check. Lifestyle hotel? Test (and with Big plans for development). Classic extremely luxurious? You bet. Oh, and don’t forget how the company stole the world’s luxury Boutique Hotel partnership from Hyatt earlier this year.

Ah, yes – and it’s also what some consider the company’s “category killer” debut in the economy with sparka brand launched last year that typically targets the $100-per-night hotel space.

So, what has changed at Hilton over the years since that era of complacency?

“I would say our secret sauce in terms of performance is perseverance, determination, competitiveness and the entrepreneurial spirit to do it differently,” Nassetta said in an interview with TPG this month at the NYU International Hotel Industry Investment Conference.

With a current portfolio of 24 hotel brands—from the affordable Spark to the upscale Waldorf Astoria—and a loyalty program reaching nearly 190 million people, the company is achieving significant growth and change. change, mainly achieved through organic growth of launching brands internally rather than acquiring them.

But even that has changed a bit over the past year, as the company Acquires the graduate lifestyle hotel brand and also holds a majority stake in parent company of NoMad Hotels in a bid to increase its presence in luxury lifestyle hotels.

“I used to be an M&A professional, so it’s not that I don’t like doing it,” Nassetta said of buying brands instead of building them organically. “But by nature, I’m a very disciplined person. So the filter of what makes sense for our customers [and] What makes sense for our shareholders economically has always been my North Star.”

The rise of Hilton Honors and partnerships

While Nassetta declined to comment on that industry conversation Hilton Honors is about to surpass Marriott Bonvoy As the hotel’s largest loyalty program, he was happy to point out the strength and expansion of Hilton’s network.

Hilton Title adding about 80,000 new members every day, and the overall loyalty program accounts for about 64% of all overnight bookings at Hilton. The goal is to get that number to 65% by the end of the year, and Nassetta said he thinks it could eventually reach 75%. Furthermore, the company is moving to offer more experiences within the program.

“I want it to grow, but I want engagement, and I want it to ultimately drive satisfaction and market share so owners want to continue to reinvest,” he added. “That’s how I think about our ecosystem.”

Opportunities for further growth come from Hilton co-branded credit card partnership with American Express. Hilton became American Express’s first co-branding partner in the ’90s, and the partnership – American Express is the exclusive co-branded credit card issuer for Hilton – was renewed last year with 10 year extension period.

“This expansion builds on the strong foundation we have built over many years with Hilton and gives us a long way to go in investing in products and services, while attracting customers new as well as deepening our relationships with existing customers,” American Express CEO Steve Squeri said at a press conference. last year’s earnings call.

“While it has grown significantly, we believe there is still a lot of upside,” Nassetta added when speaking to TPG this month.

Luxury, lifestyle and affordable brands

It’s hard to pinpoint a single direction Hilton is taking these days, since the brand’s evolution covers so many points along the travel food chain.

Sparks and Studio LivSmart both launched last year and cater to more affordable market segments as well as long-distance travel. Graduate and NoMad will strengthen Hilton’s presence in the trendy lifestyle hotel sector dominated by brands such as Marriott’s Edition, Accor and Ennismore’s The Hoxton and Standard International. Hilton’s AutoCamp partnership even gives it a presence in the booming luxury camping business.

The company’s legacy brands are also seeing big growth: Waldorf Astoria has a development roadmap that will expand its 35-hotel portfolio by 75%, including recently opened in Seychelles and Doha and upcoming openings in London; Hanoi Vietnam; Costa Rica; Kuala Lumpur, Malaysia; Indonesia’s capital Jakarta; Sydney; Tokyo and Osaka, Japan; and Riyadh, Saudi Arabia. The long-awaited reopening of the Waldorf Astoria New York is also coming.

So, is there any room left for Hilton to fill in its brand lineup?

“What I’m really trying to push my team on is, now that we have the right lineup, let’s make sure that, with our legacy brands, we continue to reinvent them to keep them strong,” Nassetta said. “Make sure that the new brands that we’ve created are born and launched properly and can scale, and make sure that these new ‘children’ that we’ve adopted are fully integrated and maximized opportunities.”

However, he later added: “There will definitely be a next thing.”

It seems like if you have a desire to travel, there’s finally a Hilton brand to satisfy it.

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