Hilton has achieved its largest pipeline of hotels to date, with its top executive attributing this success to the strength of the group’s brands.
Christopher J. Nassetta, the president and CEO, stated in an interview with Skift that one in every five hotels under development globally will bear the Hilton name. If all these hotels come to fruition, Hilton will expand its global market share.
Nassetta credited the potential share gain to the reputation of the group’s brands, which are known to deliver high returns for owners.
The company’s loyalty program is a key factor in this reputation, according to Nassetta. Over the past five years, Hilton has more than doubled its loyalty program membership. A larger loyalty program leads to lower customer acquisition costs for owners, on average.
Nassetta also discussed Hilton’s efforts to reduce carbon emissions at franchised properties, not just at the corporate office. While acknowledging progress in reducing emissions across the portfolio, he mentioned that the company is using incentives and data-sharing to encourage franchisees to further reduce energy consumption.
Record Pipeline
Skift: Hilton’s development pipeline reached 462,400 rooms by year-end, an 11% increase year-over-year. Some of your brands are experiencing significant growth in pipeline share. Why is that?
Indeed, 2023 was a record-breaking year for Hilton, with strong financial results and record growth in the development pipeline.
We achieved a record number of signings, which allowed us to close the year with the largest pipeline in our history.
In the fourth quarter, we opened more new rooms than ever before in a single quarter.
These milestones showcase the momentum of our business during a period of remarkable growth.
The hospitality industry remains highly fragmented globally, with major hotel brands representing only a fraction of the market. There is significant opportunity for increased global scale, and we are proud to lead the industry with one in every five hotel rooms under construction globally set to be a Hilton property.
While there are industry trends driving the growth of the hospitality sector, at Hilton we firmly believe that the strength of our brands accelerates our expansion. Owners recognize the value of our distinctive premium brands, loyalty programs, and commercial engines in delivering higher returns for them.
In 2023, we introduced two new brands that will extend our portfolio into new markets and attract new guests to the Hilton family, both experiencing rapid growth.
With LivSmart Suites by Hilton, we cater to travelers who continued to journey during the pandemic, such as traveling nurses or long-term construction crews in need of quality, apartment-style accommodations for stays of 20 nights or more.
With Spark by Hilton, we offer a premium economy option that provides quality and consistency at an affordable price point.
Guests at these brands start a long-term relationship with Hilton and grow with us as they progress in life and seek new brands for different travel needs.
Loyalty Program Growth
Skift: Hilton’s loyalty program has seen a 110% membership increase over the past five years, surpassing peers like Marriott (60%), Wyndham (78%), and IHG and Accor (sub-50%). Why has Hilton excelled?
I’ve always said that becoming a Hilton Honors member is a no-brainer, and it seems that travelers agree! We offer an incredible portfolio of brands in desirable locations around the world, and the value for members is undeniable.
We have fantastic partnerships that provide members with exclusive experiences, unique ways to use points beyond free stays, and many exciting developments in the pipeline.
For example, we recently announced a partnership with Small Luxury Hotels of the World, expanding our luxury offerings and giving guests more options for dream vacations with Hilton.
This partnership is expected to significantly enhance our luxury portfolio in the next few years, with a focus on resort locations. Adding this extraordinary collection to our growing luxury options strengthens our network and provides Honors members with more ways to earn and redeem points with Hilton.
Our advanced technology platform allows Honors members to do almost everything from their app – check-in and out, use digital keys, select a room, book reward stays, and communicate with on-site staff. This formula of delivering real value to guests continues to drive growth for Hilton.
Hotel Carbon Emissions
Skift: Hilton has been recognized for reporting on carbon emissions at the property level with its franchisees. How will Hilton incentivize its franchisees to rapidly reduce energy consumption and carbon emissions despite not having direct control over them?
Since 2009, we have used LightStay, our proprietary corporate responsibility management platform, to monitor the environmental impact of our global portfolio. LightStay has been instrumental in helping us identify initiatives with the greatest positive effect.
Reporting energy, water, waste, and social impact data into LightStay is a global standard across all our properties, including franchised hotels.
According to LightStay data, we have made significant progress in reducing the environmental footprint of our hotels compared to the 2008 baseline. We have saved over $1 billion in utility costs, reduced emissions intensity by 44%, water intensity by 38%, and landfill intensity by almost 58%.
To ensure alignment across our properties, regardless of management company, we implement scalable initiatives that enhance the guest experience while benefiting the planet and the bottom line.
We believe that doing good can lead to success, and this principle guides our efforts to reduce environmental impact. For example, LED lighting is cost-effective, reduces emissions, and enhances design. Our LED lighting program makes bulbs affordable, increases utility incentives, and decreases owners’ expenses.
Accommodations Sector Stock Index Performance Year-to-Date
What is this? The performance of hotel and short-term rental sector stocks within the ST200. The index includes publicly traded companies from global markets, such as international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies valued at over a trillion dollars into a single index. Explore the financial performance of hotels and short-term rentals further.
