Hilton, ranked 3rd largest hotel group in the world by MKG Consulting, continues to grow. With 19 brands by 1 January 2023, including the recent additions of Spark by Hilton and LivSmart Studios by Hilton, and 1,113,727 rooms worldwide, the American group has secured its place on the world podium. A strategy of continuous growth that has paid off so far, and which continues through a new partnership with Small Luxury Hotels of the World.

At a time when Hilton has almost reached a balance between its budget and midscale portfolio and its upscale and luxury brands, its latest announcement underlines its intention to concentrate its growth in 2024 on the luxury segment. The group is entering into a new partnership with Small Luxury Hotels of the World (SLH) "to significantly expand our distribution of luxury products", explains Chris Nassetta, the group's CEO.

The Hilton CEO sees the partnership as "an incredible midscale opportunity for us to transform our portfolio of 150-160 luxury hotels into 600-700 hotels in the world's best, most unique and hard-to-duplicate locations". Shaun Leleu, chairman of Small Luxury Hotels of the World, said: "We are delighted to enter into this win-win relationship with Hilton, as it offers exciting opportunities for both brands. It's a game changer for independent hotels globally".

While there will be no rebranding or affiliation on the SLH side, the brand will still have access to Hilton's Honors loyalty program and commercial booking channels. In return, Hilton will receive a licensing fee "in the area of what we typically get with our brands" says Chris Nassetta.

Alongside this promising new collaboration, Hilton is set to launch a new luxury lifestyle brand later this year. "We intend to enter this space one way or another and we're working hard on it," says the group's CEO. At present, no further information about this new brand has been revealed. However, this announcement is in line with the Group's historical approach, which has always favoured organic growth.

However, Chris Nassetta has neither confirmed nor denied rumours of an acquisition of Graudate Hotels. "Our attitude to mergers and acquisitions is really the same as it has always been. We haven't done any, but every time I've been asked, I've said never say never", he explained during a conference call with the press. He also explained that the Group has a very strict filtration system, which has prevented him from buying a new brand during his 17 years in the job.

 

This position was confirmed by John Rogers, Hilton's Senior Vice President of Brand Management for the EMEA region, at the recent Hospitality Asset Forum. When the product is so variable, branding is no longer a marketing battle, it's an experience battle. It's all about delivering an experience that meets and exceeds your customers' expectations and sets you apart from the competition. At Hilton, we pay particular attention to this".

Explaining that we're seeing "a huge proliferation of brands" these days, he says it's really important that "each individual brand has a very specific and unique positioning. Sometimes it's useful to look at brands in the context of other sectors, and that's what we always do". With the Group now approaching 20 brands, it is crucial for it to keep all these elements in mind to remain relevant and create brands with high added value for both its portfolio and its customers.

As Chris Nassetta explains, while the current economic climate could make it possible to consider an acquisition of some kind, the group nevertheless seems to prefer to focus on organic growth. This strategy is paying off, with Hilton boasting a strong pipeline at the end of 2023, with a record 462,400 hotel rooms under development in 118 countries and territories. Furthermore, the group is forecasting net unit growth for 2024 of between 5% and 6%.

Whatever growth path Hilton chooses, the expansion of its hotel portfolio continues to be its priority this year. However, this growth will have to be both diversified and consistent, as the group is not looking to expand all over the place. While Hilton intends to continue its organic growth with the development of new brands, it remains attentive to the identity and relevance of each one, particularly in terms of adapting to the markets in which it is established. "What works in one place doesn't work in another", explained John Rogers at the HAF.