Hilton Worldwide

Hilton Worldwide
Formerly called
 Hilton Hotels Corporation
Public
Traded as NYSE: HLT
Industry Hospitality, Hotels
Founded 1919 in Cisco, Texas
Founder Conrad Hilton
Headquarters 7930 Jones Branch Drive, Tysons Corner, Virginia, United States
(McLean mailing address)
Number of locations
 4,202[1]
Area served
 Worldwide
Key people
 Christopher J. Nassetta, President and CEO
Revenue Increase $8.0 billion USD (2013)[2]
Number of employees
 152,000 employees and 162,000 franchise employees (Dec 2013)[2]
Parent Blackstone Group
Website www.hiltonworldwide.com

Hilton Worldwide (formerly, Hilton Hotels Corporation) is an American global hospitality company. It is owned by the Blackstone Group, an American private equity firm. As of March 2014, Hilton brands encompass 4,112 hotels with over 680,117 rooms in 91 countries.[1] Prior to their December 2013 IPO, Hilton was ranked as the 38th largest privately held company in the United States by Forbes.[3]

The company owns, manages, and/or franchises a portfolio of brands, which includes Conrad Hotels & Resorts, Canopy by Hilton, Curio – A Collection by Hilton, Hilton Hotels & Resorts, DoubleTree by Hilton, Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn, Homewood Suites by Hilton, Home2 Suites by Hilton, Hilton Grand Vacations and Waldorf Astoria Hotels & Resorts (The brand's flagship--and first--Waldorf Astoria property in New York City was sold to Chinese investors in 2014.)[4]

On December 12, 2013, Hilton again became a public company in its second IPO to raise an estimated $2.35 billion.

It was founded by Conrad Hilton in Cisco, Texas and was headquartered in Beverly Hills, California from 1969 until 2009. The company moved to Tysons Corner, unincorporated Fairfax County, Virginia, near McLean in August 2009.[5][6][7]

The company has been a sponsor of the United States Olympic Team since 2005.

History

20th century

Conrad Hilton founded the original company in 1919 with the Mobley Hotel in Cisco, Texas.

The Hotels Statler Company was acquired in 1954 for $111,000,000 in what was then the world's most expensive real estate transaction.

Two chains with one name

The company spun off its international operations into a separately traded company on December 1, 1964, known as Hilton International Co.. It was acquired in 1967 by Trans World Corp., the holding company for Trans World Airlines. In 1986, it was sold to UAL Corp., the holding company for United Airlines, which became Allegis Corp. in an attempt to re-incarnate itself as a full-service travel company, encompassing Westin Hotels and Hertz rental cars in addition to Hilton International and United Airlines. In 1987, after a corporate putsch, the renamed UAL Corp. sold Hilton International to Ladbroke Group plc, a British leisure and gambling company, which, in May 1999, adopted the name Hilton Group plc.[8]

The former Hilton Hotels Corporation headquarters in Beverly Hills

As a result, there were two separate, fully independent companies operating hotels under the Hilton name. Those Hilton Hotels outside the U.S. were, until recently, styled as Hilton International hotels. Because the two chains were contractually forbidden to operate hotels in the other's territory under the Hilton name, for many years hotels run by Hilton International in the U.S. were called Vista International Hotels, while hotels operated by the American arm of Hilton outside the U.S. were named Conrad Hotels.

In 1997, to minimize longtime consumer confusion, the American and British Hilton companies adopted a joint marketing agreement under which they shared the same logos, promoted each other's brands and maintained joint reservation systems. At that point, the Vista chain was phased out, while Conrad has been restyled as one of the luxury brands of Hilton (along with The Waldorf-Astoria Collection) and operates hotels within the U.S., as well as abroad.

In 1971, Hilton acquired International Leisure Company, including the Las Vegas Hilton and Flamingo Hilton.[9]

In 1998, Hilton spun off its gaming operations into a separate, publicly held company called Park Place Entertainment (later Caesars Entertainment, Inc.)

In 1999, Hilton acquired Promus Hotel Corporation, which included the DoubleTree, Red Lion, Embassy Suites, Hampton Inn and Homewood Suites brands.[10]

21st century

In 2001, Hilton agreed to sell Red Lion to WestCoast Hospitality.[11]

HHC was granted the naming rights to the George R. Brown Convention Center in late 2003. The Hilton Americas in downtown Houston, Texas is connected to the convention center.

On December 29, 2005, Hilton Hotels Corporation agreed to re-acquire the Hilton International chain from its British owner, Hilton Group plc, for GBP 3.3 billion (or $5.71 billion). As well as bringing the two Hilton companies back together as a single entity, this deal also included Hilton plc properties operating as Conrad Hotels, Scandic Hotels and LivingWell Health Clubs.[12] On February 23, 2006, the deal closed, making Hilton Hotels the world's fifth largest hotel operator in number of rooms.[13] Hilton Group PLC (headquartered in the UK) then renamed itself Ladbrokes plc.

On March 1, 2007, Scandic Hotels was sold to EQT Partners.[14]

On July 3, 2007, Hilton Hotels Corp. agreed to an all-cash buyout from the Blackstone Group LP in a $26 billion (including debt) deal that would make Blackstone the world's largest hotel owner.[15] The deal was the culmination of a year of on and off discussions with Blackstone.[16]

The private equity group said it would combine cash from its real estate and corporate private equity funds to buy all outstanding Hilton shares for $47.50 each, a 32 percent premium over the July 3rd closing stock price.

In October 2007, Christopher J. Nassetta was appointed President and Chief Executive Officer of Hilton.

In February 2009, Hilton Hotels Corp., announced that its headquarters were moving from Beverly Hills to Fairfax County, Virginia.

While Blackstone saw an opportunity to streamline the company and push Hilton's expansion overseas when Blackstone pursued Hilton in 2006 and 2007, the buyout saddled the company with $20 billion of debt just as the economy was turning down. The debt had very liberal terms, so there was no danger of default, but when travel slowed, the company suffered. In April 2010, Hilton and Blackstone restructured the debt. Blackstone invested a further $800 million of equity and the debt was reduced to $16 billion.[17]

On September 12, 2013, Hilton filed plans for a $1.25 billion IPO.[18]

Brands

Luxury

Full service

Select service

Extended-stay suites

Lifestyle

Timeshare

Defunct

Franchising

Many of Hilton's properties are franchised to independent operators and companies. This business practice has proven successful in rapidly expanding the various Hilton brands to markets all over the United States. Franchisees must follow strict brand standards in order to maintain a licensing agreement with Hilton Worldwide. The Hampton Inn brand is virtually 100% franchised with the minor exception of a few properties that are corporate managed for various reasons. All franchised hotels are regularly inspected by a Quality Assurance Team to enforce brand standards and consistency.

The practice of franchising is popular within the hospitality industry among most major hotel chains, especially among smaller brands with a fair number of locations which are not feasible to be corporately owned and managed by the company. Competitor companies, such as Marriott International and Starwood, follow a similar business model that focuses on franchising as a rapid expansion method.

Most of Hilton's flagship properties, airport properties, and largest resorts, however, are corporately managed.

Corporate affairs

The company has its headquarters in Tyson's Corner, Virginia and an operations center in Memphis. Its Asia-Pacific operations are managed out of Singapore and its Middle East and Africa operations are managed out of the Dubai Internet City Building 15. Its European operations are based out of Watford, United Kingdom.[20]

Hilton HHonors

Hilton HHonors is Hilton's guest loyalty program in which frequent guests can accumulate points and airline miles by staying with the various Hilton family of brands. The Hilton Honors program is one of the largest programs of its type,[21] with over 30 million HHonors members. The program has partnerships with most major airlines where guests can "Double Dip" and accumulate both points and airlines miles simultaneously with their hotel stay. Similar to frequent flyer programs, there are various tiers of membership which guests can reach depending on the amount of stays and points accumulated annually, the higher the tier the more benefits members receive. The membership tiers are as follows:

Diamond VIP is the highest tier level, these members receive benefits such as access to the Executive Level lounge at Hilton Hotels, complimentary in-room internet access, Guaranteed 48-hour reservations, a dedicated "Diamond VIP Desk" which members can call for priority reservations and travel planning, a dedicated VIP check in line at larger hotels, best available room pre-assignments, and special in-hotel amenities such as room upgrades and arrival amenities.

The program has seen significant growth in China, which alone saw a 79 per cent increase in Hilton HHonors membership in 2011. This was attributed in part to the refining of the brand identity in China, including the addition of a Chinese name and a Chinese website for customers to sign up and redeem their points.[22]

Hilton in popular culture

Conrad Hilton features as a major character in the third season of Mad Men as lead character Don Draper creates a series of ad campaigns for Hilton Hotels. The Drapers travel during one episode to the Cavalieri Hilton in Rome, though the scenes were actually shot at the Dorothy Chandler Pavilion in Los Angeles.

At the rotating wheel space station in Stanley Kubrick's film 2001: A Space Odyssey, visitors can stay at a Hilton hotel. Hilton's logo appears prominently in the space station's lounge.

Many actual Hilton hotel properties around the world have also been featured in various Hollywood films.

The popular Hilton HHonors guest loyalty program was featured in the 2009 film Up in the Air, as a means of product placement in which various characters present their branded Hilton HHonors membership cards to check into Hilton hotels throughout the film.

The happiest place to work

According to Careerbliss.com, Hilton Worldwide ranked first in the '2012 Happiest Companies in America', with a score of 4.36 out of 5.[23] The survey looked at job reviews from more than 100,000 employees such as characteristics like work-life balance, company culture and reputation, and the relationships employees have with their bosses.[24]

References

  1. ↑ 1.0 1.1 Hilton website
  2. ↑ 2.0 2.1 Hilton Worldwide Holdings Inc. Form 10-K, Securities and Exchange Commission, February 27, 2014
  3. ↑ "The Largest Private Companies". Forbes.com. 2010. Retrieved 2010-11-11.
  4. ↑ "Hilton to sell Waldorf Astoria NY for $1.95b". Hotel News Now.
  5. ↑ Hilton Checks Into New Tysons Headquarters
  6. ↑ "Contact Us." Hilton Worldwide. Retrieved on October 14, 2009.
  7. ↑ "Tysons Corner CDP, Virginia". United States Census Bureau. Retrieved 2009-05-07.
  8. ↑ Killgren, Lucy (April 22, 1999). "Name Stake". Marketing Week. Retrieved 2012-06-18.
  9. ↑ "Nevada Gaming Abstract - MGM MIRAGE Company Profile". Retrieved 2007-03-26.
  10. ↑ Petersen, Melody (September 8, 1999). "Hilton to Buy Promus Chain". The New York Times. Retrieved 2008-03-23.
  11. ↑ "Hilton Sells Red Lion, Select Doubletrees To WestCoast". Retrieved 2008-03-23.
  12. ↑ "About Us". LivingWell Health Clubs. Retrieved 3 December 2014.
  13. ↑ MGM Consulting
  14. ↑ www.eqt.se
  15. ↑ Louise Story, "Blackstone to Buy Hilton Hotels for $26 Billion," New York Times, July 4, 2007.
  16. ↑ David Carey & John E. Morris, King of Capital: The Amazing Rise, Fall and Rise Again of Steve Schwarzman and Blackstone (Crown 2010), pp. 254.
  17. ↑ Peter Lattman and Lingling Wei, "Blackstone Reaches Deal to Revamp Hilton's Debt,' Wall Street Journal, Feb. 20, 2010; Hilton Worldwide press release, Apr. 8, 2010; King of Capital, pp. 299-300.
  18. ↑ In Hilton I.P.O., a Losing Deal Turns Around (September 12, 2013).
  19. ↑ What to Expect from Hilton’s New Canopy Hotel Brand. Condé Nast Traveler. Accessed 2014-12-22.
  20. ↑ "Contact Us." Hilton Worldwide. Retrieved on August 17, 2014.
  21. ↑ "Case Study: Hilton Wordlwide". Marketing Week. 2 November 2011.
  22. ↑ "Philippe Garnier". TTGmice. Retrieved 27 March 2013.
  23. ↑ "CareerBliss 50 Happiest Companies for 2012". CareerBliss. December 6, 2011.
  24. ↑ "10 Happiest Places to Work: Is Your Job on the List?". Time. December 12, 2011.

External links