Hilton Hotels to add 2,000 Hotels to Portfolio in next 10 years

Hilton Hotels is aiming to add 1,000 hotels within North America in the next five years, and 1,000 hotels to its portfolio outside of North America, or internationally, within the next 10 years. Currently Hilton has more than 775 hotels and 110,000 rooms in development. More than 75 of the 775 properties are located within the international operations.

"Representing a global, multi-brand company with distinct product types and price points translates into growth opportunities across far-reaching territories and market segments, delighting guests with our genuinely hospitable people and best-in-class products and services," said Ian Carter, CEO Hilton International Operations.

Since June 2006, the company has announced several transactions that enabled it to expand brands that previously existed only in North America, including Hilton Garden Inn in Germany, Italy and China, Hilton Garden Inn and Homewood Suites by Hilton hotels in India; and Doubletree by Hilton in Thailand and China.

One of the most significant deals to date is an agreement with DLF Limited in India to develop hotel properties and serviced apartments in India. The transaction will make Hilton one of the largest hotel entities in that country, with plans to open 50-75 Hilton, Hilton Garden Inn and Homewood Suites by Hilton hotels throughout India over the next seven years. The other major development is an intended alliance with RREEF (the real estate and infrastructure investment arm of Deutsche Bank) and H&Q Asia Pacific. RREEF and H&QAP will form a fund to develop more than 20 Hilton Garden Inn hotels across China, including Beijing, Shanghai and Tianjin.

"The significant India and China developments are indicative of how we want to grow globally," Carter said. "We aim to make a big statement and achieve consistency of product and service through ventures with large ownership groups."

The pace of growth in the international operations is reflective of the company's accelerated growth within North America, particularly of its mid-market hotels, which are more affordable for hotel owners given their smaller footprint, and for which demand outpaces supply in a number of global markets.

"We've grown our hotel portfolio to include every price segment in which we want to do business," said Tom Keltner, CEO, Americas and Global Brands, Hilton Hotels Corporation. "Together, we and our owners have opened a hotel roughly every other day throughout North America, which translates to adding 1,000 hotels since 2000." 

In addition to the Hilton brand, the company is focused on expanding Hilton Garden Inn, Hampton Inn and Doubletree (the latter two have added "by Hilton" to their names in the international markets). Based on feedback from research and focus groups in local areas where the company is concentrating its development efforts, Hilton Garden Inn and Hampton by Hilton are laying the foundation for new prototypical designs suited for international development.

Hampton by Hilton and Hilton Garden Inn represent the highest growth opportunities due to their affordable and less complicated footprints, and Doubletree by Hilton is a strong development candidate because of its conduciveness to conversions. Embassy Suites and Homewood Suites by Hilton will look to expand in Mexico and Canada.

Conrad and The Waldorf=Astoria Collection

The company also will continue its focus on the luxury segment by growing The Waldorf=Astoria Collection and Conrad hotels around the world. The company announced during the fourth quarter 2006 that it has signed a management agreement for a new Conrad in Koh Samui, Thailand, which is scheduled to open in 2008. Also, the Qasr Al Sharq in Jeddah, Saudi Arabia, was added to The Waldorf=Astoria Collection in the fourth quarter 2006.

A number of strategic markets have been identified for growth opportunities across all brands, based on markets where Hilton has an existing strong presence or markets with the greatest growth potential given a strong economy and growing travel population.

"We are well-positioned to continue our market leadership across major segments (mid-scale to luxury) given our world-class properties appealing to a broad customer base, high growth potential through brand development, international management expertise and strength in gateway cities," Carter said.

Europe

Within Europe, the markets in which the company is focusing its development efforts for Hilton hotels, as well as the Hilton family of brands, include the United Kingdom for mid-market development and conversion opportunities; Spain, the second most popular tourist destination in the world with opportunities for new builds as well as conversion of domestic brands and family operated hotels across all segments; Italy, where international chains account for around nine percent of the market share and franchising allows independent operators to retain control while leveraging off the Hilton brand,; Germany a well-established market for Hilton with opportunities for new hotels in the mid-market sector and Russia, offering opportunities to develop full-service hotels.

With four new development offices opened in Europe in late 2006 (Moscow, Vienna, Madrid and Frankfurt) and a range of new brands to suit nearly every price point, the company is well positioned to accelerate the expansion of its portfolio. This year it will open 16 Hilton hotels in Europe and another nine (including a Hilton Garden Inn in Frankfurt) by 2009, along the way entering four new markets: Russia, Ukraine, Poland and Portugal.

Referring to the strong German market, Wolfgang M. Neumann, Area President Europe & Africa Hilton Hotels Corporation said, "This is a very important market for Hilton, given the size of the economy and our already strong presence. We now have a portfolio of 14 Hilton branded hotels (4,576 rooms) as well as the 141-room Hilton Garden Inn Stuttgart NeckarPark - incidentally the first Hilton Garden Inn to open outside North America and Mexico. Looking forward, we will boost our room inventory with the opening of two new hotels at Frankfurt airport in 2008: the 314-room Hilton Garden Inn will sit alongside the 247-room Hilton hotel, making it our second example of how one destination can support two different brands within the Hilton Family of Hotels."

Asia and the Middle East

In Asia and the Middle East, the areas of development focus are India, with a growing economy and middle class, creating opportunities for both business and leisure travel growth; China, with a strong economy and the fastest growing GDP in world, new low-cost airlines, and relaxed travel regulations; Japan, with an improving economy; and the UAE/Qatar, representing the fourth most visited region in world and the second fastest growing GDP behind China. Australia and New Zealand also represent strong areas for development despite high barriers to entry.

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