With that line of thought, Nassetta is constantly thinking of untapped niches and unserved markets for new brands. He mentions, a few times, the ‘urban micro’ brand the operator is developing. All he reveals is: “We’re looking at a few others that we’re not going to quite get into but I’d say in my little incubator in my head, I have at least — including the urban micro — three brands, maybe four. Some of those are bigger, smaller, some are almost sub-brands as opposed to a mega brand.”
There are, at this stage, no acquisitions on the horizon for Hilton, although Nassetta says he can “never say never”. He adds during his conversation at AHIC: “We haven’t done it in 10 years; we have been very vocal, publicly saying we’re not out bounty hunting because I just don’t think we need to. We are incubating our own brands, and we’re doing it in a way that’s very customer-centric. From an organic growth point of view, we’re growing faster than anyone out there. We are growing 6-7% on an organic basis, that’s giving customers products that are tailored to their needs. It’s giving our shareholders a much better return because we’re not buying brands.” Having said that, he adds that he believes there will be further consolidation in the wider market to capitalise on the advantages of having a larger scale with broad geographic diversity.
It’s something he believes Hilton already possesses, and with 14 brands and nearly 5,000 properties across 103 countries, he’s right. In the EMEA portfolio alone, the operator passed the milestone of 100,000 rooms trading earlier this year. In EMEA specifically, there has been a net unit growth of more than 20,000 rooms in the past three years, a trend which is set to continue with close to 40,000 rooms currently under construction and expected to open by the end of 2020. Additionally, approximately 50% of Hilton’s pipeline is located in Middle East & Africa.
Nassetta is excited about the opportunities in every region across the world. He comments: “We are at the peak levels of growth in pipeline in every major region in the world, and every segment within our brand segment is at the peak level of pipeline we’ve ever seen. I think I semi-famously said this around our IPO: ‘Where do you want to win?’ and I want to win everywhere. We want to be everywhere.”
In terms of percentage growth, Hilton is growing at a very rapid pace in the Middle East, reports Nassetta, comparable to how it is growing in Asia-Pacific. This is, in part, because the operator is starting from a smaller base compared to the Americas, for example, but Nassetta re-asserts: “The Middle East region as a percentage growth is one of the higher growth regions that we have today and will continue to be so for a long time to come.”
And this growth is being showcased across a number of brands. Once Hampton by Hilton opens its doors, Hilton will have seven brands in the region, including Waldorf Astoria, Conrad, Hilton, Doubletree by Hilton, Hilton Garden Inn, and Curio – A Collection by Hilton. He cheekily teases: “I suspect that over the next three or four years, we’ll bring at least three more brands to the region, maybe four.” One of these will be Embassy Suites, which has already been signed for Saudi Arabia. Nassetta says he hopes Tapestry and Canopy would also be potential brands for the region, and adds that Hilton could have 10 out of its 14 brands in the region fairly easily.
All this growth cannot happen without people, asserts Nassetta. He comments: “We are a very big global company; we are 350,000 people trying to deliver great hospitality. We are a big company, and we very much act like a small entrepreneurial company.” Every decision around digital key, F&B, brand launches and more, is being driven by what Hilton’s current and potential customers want — with the front line team sharing this vital information.
He concludes: “We run a lean, mean operation. If people aren’t inspired, they’re not going to do inspiring things.” And it looks like he’s been inspiring them to do just that.
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