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Michael McLellan

How Hilton’s Diversity Helps It Dominate the Hotel Business

by Michael McLellan | Dun & Bradstreet Editor

July 29, 2015 | No Comments »

Hilton-hotel_1100pxCompanies operating in the travel, lodging, leisure, and hospitality industries have their ups and downs. Competition is fierce and unending, while labor costs and upkeep on properties are expensive.

Operating in an unpredictable industry, Hilton Worldwide has maintained steady revenue growth for the past five fiscal years. In fiscal 2014 its revenue was $10.5 billion.

That was an increase of 8% compared to fiscal 2013. The company’s net income has also been growing consistently over the past five fiscal years.

Its net income was $673 million in fiscal 2014, an increase of $258 million, or 62% compared to the previous year.

Hilton Worldwide is one of the world’s largest hoteliers, with a lodging empire that includes more than 4,300 hotels and resorts in some 95 countries.

The company’s large portfolio of hotels operate under such names as Doubletree, Embassy Suites, and Hampton Inn, along with its flagship Hilton brand.

Suitable Accommodations for Everyone

The secret to Hilton’s consistency might be its diversified offerings to customers. With its extensive portfolio of brands, Hilton seeks to serve multiple segments within the lodging sector.

Many of the company’s hotels serve the mid-market segment, though its Hilton and Conrad hotels offer full-service, upscale lodging.

In addition, its Homewood Suites chain offers extended-stay services. The company’s largest chains, Hampton Inn and Hampton Inn & Suites, include about 2,000 locations and target mid-market travelers with moderately priced rooms and limited amenities.

At the other end of the scale, the company’s Conrad chain offers luxury services and distinctive locations, while its Waldorf-Astoria Collection is a prestigious collection of hotels inspired by the New York landmark.

The company’s Hilton Grand Vacations subsidiary operates about 50 time-share vacation resorts, with a concentration located in Florida.

Truly Global Reach

Living up to its full legal name (Hilton Worldwide), the company has hotels in desirable locations all over the world. Roughly 75% of its sales come from hotels in the US.

However, Hilton has recently added properties to its portfolio in Azerbaijan, Bangladesh, Brazil, China, Croatia, Egypt, Germany, India, Kazakhstan, Mexico, the Netherlands, New Zealand, Russia, Saudi Arabia, South Africa, Turkey, the UK, the United Arab Emirates, the US, and Vietnam.

No Trouble Attracting Guests

Hilton relies on traditional advertising and promotions along with a variety of direct-marketing techniques such as email and postal mailings to drum up business for its various properties.

A fair amount of the company’s thousands of hotel rooms get booked through Internet travel intermediaries. Hilton pays commissions and transaction fees for sales of rooms through such services.

Like most large hotel chains, Hilton also has a robust customer loyalty program (Hilton HHonors) it uses to foster return business.

Michael McLellan covers the business of restaurants, hospitality, marketing, media, PR, and more for Dun & Bradstreet and Hoover’s. He is a graduate of the University of Texas at Austin’s Radio-Television-Film program.

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