BREAKING NEWS – Hilton Worldwide CEO Chris Nassetta this morning gave Wall Street analysts some high-level insights about the company’s plan to debut two new brands this year. Nassetta spoke about the brands during the company’s Q1 earnings call. We’ll have to wait a bit for the names of the brands, unfortunately.
The first brand that Hilton Worldwide plans to launch this year is one that sounds similar to Marriott International’s Autograph Collection, which markets a diverse group of high-end independent hotels around the world and lets consumers earn and burn their Marriott loyalty points. Autograph today has roughly 60 hotels in its network.
Nassetta in his own words:
“It will be a 4-star brand that will aggregate iconic urban and resort hotels that don’t really fit in the box of the specified standards of any of our brands. We increasingly find some of our existing customers as well as others we want to attain are interested in those types so locations and unique iconic hotels. We think we can better serve our customers in offering that type of product,” he said.
Expect this brand to be what he calls “conversion friendly,” which in non-industry lingo means that they will be existing hotels that are either running as an independent hotel or currently run under a different chain name.
Summer is the likely time this brand will launch, he said.
Lifestyle brand also on the way
It’s well-known that Hilton lacks a chain that’s similar to Starwood’s W or Marriott’s fledgling Edition brands, but that should change this fall, according to Nassetta.
He didn’t say too much about the concept, telling analysts to expect details in the next three to six months. Nassetta did, however, say that Hilton’s approach is different than most of its competition, likely referring meaning Marriott and Starwood.
“Most competition accesses lifestyle at a luxury price point. We believe there’s much broader demand (at a slightly lower price),” he said. “We are coining the phrase, ‘accessible lifestyle.'”
Selling rooms at a lower rate, with a different type of service model, “will let us serve more customers,” he said.
It will also help Hilton “build a brand that’s much bigger than what we’ve seen others be able to do.”
Like the first new brand, this one will also rely on converting existing hotels into member properties. Conversions are typically a faster way to grow a brand than building a building from the ground up because it eliminates the need to take the time necessary to obtain government approvals and larger loans.
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Driving company growth
Both brands are expected to serve more customers, and ultimately help Hilton grow as a company.
“I think we will be able to significantly add growth to the company long term as well as short term,” he told analysts on the call. The company went public earlier this year.
Nassetta said that they don’t expect to have to financially encourage the development of the new-brand hotels because owners want to ink deals.
“We have 10,000 owner relationships around the world that are dying to do more with us. They believe in the strength of our brands. We’re driving great profitability for them.”
Readers: Do you think consumers are ready for more brands?