Hilton merger to prompt mid-market entry
THE recent reunification of the two Hilton mother companies, Hilton International (HI) and the Hilton Hotels Corporation (HHC), at a cost of 8.8 billion euros ($11.1 billion), has opened up a variety of brand opportunities for the group.
As a whole, the company is now able to leverage its brands across all its markets and the region’s hotel boom could well see the group’s other brands being rolled out here.
The merger has been in the process a long time was prompted by the difficulty of running a global brand with two or three different owners, Rudi Jagersbacher, vice-president of Hilton International, told TTN in an exclusive interview. “We welcome this decision with open arms, because today we have access to all the different brands. [HHC] has about 10 different brands that are extremely successful in the United States. In particular, there seems to be a mid-market trend in the Middle East and a lot of people have identified this, but we want to make sure that in terms of brand recognition it is an ideal one to roll out here,” he says.
One such brand is the Hampton Inn, he says. “I think we have about 1100 rooms in that area, and if you see from a customer base point of view, it is ideal.” Others include Doubletree and Garden Inn, but the group isn’t jumping in just yet.
Jagersbacher says the company wants to make sure it’s got its basics right first. “The big wins will definitely look towards new markets like China and India and places in the Middle East as a priority. However, you have to make sure that the supply and demand matches itself in the various categories of brand available and at the moment, you are expected to match the demand on everything, but this will not last. So while we will see some new brands opening in the region, we are sure we will not have too many hotels, and the hotels that we have will have longevity.”
Part of that supply comes from the 11 million active Hilton honours members, who Jagersbacher says stay with the group some four or five times a year. “We know that just plugging our name on the new properties there is a certain occupancy from loyal customers.”
The other area of concern is being able to support all the brands, he says – each brand is like a different person and has different needs, so needs different solutions, but all are Hilton products and must reflect the security and safety and minimum standards of the Hilton brand, he says. “It is very important that all brand are represented, so we are not going to do a individual brand development; it will be multi brand developments.
It is, then, not a matter of if but when. “We love the region. We are not talking only about Dubai, but the region completely; we’ve also been in Egypt, for a long time and we understand what the market is. We want to make sure that we are represented by all brands strategically in every country in the Middle East.”
New Hilton openings for the moment are a new property in Kuwait, four more in Egypt, a planned property in Beirut, a Conrad in Dubai and a proposed 590-room hotel in Amman.