McLEAN, Virginia—The creation of an all-suites brand category within its portfolio gives Hilton Worldwide Holdings a stronger handle on managing its 14 brands, according to Jim Holthouser, EVP, global brands, for the company.
The announcement made earlier this month evenly distributes Hilton’s brands across its enterprise and completes the internal organization of its brands, Holthouser said.
“It’s a way to keep all the trains running on time,” Holthouser said. “By putting like brands together, we simplify them.”
Clustering similar brands together creates efficiencies and simplifies the company’s ability to run the business, according to the executive.
“The more efficient we can be with our internal costs, the more money we have left over for demand generating activities for all of the brands,” he said. “As the market evolves, our portfolio is evolving. Our business is many times more complex than it was in the past, so the way we organize the way we do business has to evolve, too.”
Hilton’s brand segments include:
- Luxury/lifestyle: Waldorf Astoria, Conrad, Canopy by Hilton;
- Full-service: Hilton Hotels & Resorts, DoubleTree by Hilton, Curio—A Collection by Hilton;
- All-Suites: Embassy Suites by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton;
- Focused-service: Hampton by Hilton, Hilton Garden Inn, a new brand being launched in January that is currently called “Project Canvas”; and
- The company also considers its Hilton HHonors guest-loyalty program and Hilton Grand Vacations as brands in its portfolio.
The reorganized structure allows the company to have a similar number of brands in each silo—even though the number of hotels in each segment will vary, Holthouser said.
For example, Hampton and Hilton Garden Inn are the company’s two largest brands in terms of the number of hotels in their systems, but they’re aligned in the focused-service segment.
“At the end of the day the brands remain distinct,” Holthouser said.
The full-service cluster involves brands with strong conversion pipelines that require heavy property improvement plans and have similar ownership structures, Holthouser said. They also share similar food-and-beverage and meetings-and-events opportunities.
Strong value propositions
The all-suites cluster consists of brands with bundled product and strong value propositions, according to Holthouser. The properties within the cluster are all franchised.
“You revenue manage them differently than traditional brands,” Holthouser said. “We’ll use the same revenue-management system for all three of the brands.”
The creation of the all-suites category brings together three brands that comprise nearly 15% of Hilton’s current inventory and almost 20% of its pipeline (by rooms), according to information released by the company.
While Embassy Suites isn’t a traditional extended-stay brand like Homewood Suites and Home2 Suites are, extended-stay business represents approximately 25% of its overall business, Holthouser said. In addition, there are synergies with training and sales-and-marketing efforts.
“We have a pretty sophisticated infrastructure under Homewood and Home2 to define those brands,” Holthouser said. “Embassy can tap into that, too.”
New brand coming in January
The intrigue in the focused-service segment comes with the impending launch of the company’s midscale brand. Hilton executives have talked broadly about the new brand during the past 12 months, including having high-profile exposure for what it billed as “Project Canvas” during the Lodging Conference in October. Holthouser declined to reveal any specific information about the new brand other than it will be launched during the Americas Lodging Investment Summit in January.
The company has enlisted a small, but strong, group of owners to help it develop the brand, Holthouser said.
“It’s designed for owner flexibility,” he said.
The executive said the new brand will be different than the upper-midscale brand Hampton by Hilton, which has 2,100 hotels in operation.
“There’s a clear delineation between this and Hampton,” Holthouser said. “We’re being careful with the economics to make sure it will perform just as well from top line to bottom line as Hampton.”
Management roles will change in 2016
Along with the creation of the all-suites category, Hilton realigned its brand management team. Several long-time executives will have new roles when the realignment takes effect on 1 January 2016.
“The reason for the management shuffle is it’s all about continuing to create opportunities and grow the brand management we have,” Holthouser said. “We have some of the best brand management in this industry.”
The changes in management include:
- Dianna Vaughan will be promoted to senior VP become the global head of DoubleTree by Hilton and will continuing to head the Curio brand.
- John Greenleaf will be appointed to global head of Hilton Garden Inn after serving in the same capacity for the DoubleTree brand for the past several years.
- Adrian Kurre will be appointed as global head of Homewood Suites and Home2 Suites. He has overseen the Hilton Garden Inn brand for 19 years.
- Bill Duncan will oversee the newly created all-suites division. He will also serve as brand manager for Embassy Suites. He currently is global head of Homewood Suites and Home2 Suites.