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Hilton Worldwide Holdings Inc.: Company Strategy & Performance Analysis

Hilton Worldwide Holdings Inc.: Company Strategy & Performance Analysis

Summary

Hilton Worldwide Group commenced operations in 1919 and is headquartered at Tysons Corner, Virginia, the US. It operates in three segments, ownership, managed & franchise and timeshare. Hilton’s categories include luxury & lifestyle hotel brands, full service hotel brands, focused service hotel brands, and timeshare brands. Its luxury & lifestyle hotel brand portfolio includes, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and Canopy. The company’s full service hotel brands include Hilton Hotels & Resorts, Curio-A Collection, DoubleTree and Embassy Suites. Some of its focused service hotel brands include Hilton Garden Inn, Hampton, Tru, Homewood Suites and Home2 Suites. Hilton Grand Vacations is one of the leading brands in the timeshare segment. The company also launched a new full service brand, Tapestry Collection in January 2017.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading hotel companies. The reports detail company operations in key geographies as well as comprehensive analysis of each company’s growth strategy and financial performance. Furthermore, the reports allow benchmarking company performance through the provision of key performance indicators including: number of rooms, ADR, RevPAR and occupancy rates.

Key Highlights

Loyalty programs drive customer retention

Hilton has been conducting various loyalty programs to improve customer satisfaction. Hilton offers one of the best customer loyalty programs in the industry represented by Hilton Honors. In this program, customers are rewarded with points for each stay at any of Hilton’s hotels and resorts worldwide, which are further redeemable for free hotel nights and other goods and services. These benefits enable the company to retain and improve its customer base thereby generating significant revenues. Hilton Honors members represented approximately 56% of system-wide occupancy and contributed more than US$17.0 billion hotel level revenues in 2016.

Decline in occupancy rates in the Owned and Leased segment affecting revenue

The decline in occupancy rates in one of the key segments is a cause for concern for the company. The company’s owned and leased segment reported a decline in occupancy by 0.9% to reach 78.6% in 2016. The decrease in occupancy rate is due to the disposal of international hotels. This has caused a decline in segment revenue, from US$4,262.0 million in 2015 to US$4,157.0 million in 2016. The Ownership segment has been reporting a decline over the last three years. This segment reported a continuous decline in revenues by 0.2% and 2.5% in 2015 and 2016 respectively.

Construction delays hampering the pipeline hotels

The company has been facing construction delays which halted the development of many projects. In April 2017, the company planned to establish the 1200 block of Broadway. However, the project has been delayed due to higher anticipated construction costs, which stood at more than US$12 million. Also, in November 2016, the company delayed the opening of Jomo Kenyatta International Airport (JKIA) hotel in Kenya to May 2017. Earlier, Hilton had planned to start it in March 2016, however operational constraints have affected the development and opening of the mid-priced hotel. The company also faced a similar kind of issue in Nairobi, Kenya related to Hotel Pullman Nairobi.

Scope

  • Company Snapshot - detail key indicators and rankings of Hilton Worldwide Group in terms of revenue, net income and operating income, ADR, RevPAR and occupancy rates in the company’s key markets.
  • Company SWOT Analysis - outlines Hilton Worldwide Group’s Strengths and Weaknesses, and weighs Opportunities and Threats facing the company.
  • Growth Strategies - understand Hilton Worldwide Group’s corporate goals and strategic initiatives and evaluate their outcomes.
  • Company Performance and Competitive Landscape - analyse the company’s performance by business segments such as operating revenue, ownership, management & franchise and timeshare besides peer comparison on parameters such as revenue, number of hotel properties and rooms.
  • Key Developments - showcase Hilton Worldwide Group’s significant recent corporate events, changes or initiatives.
  • ICT Spending Prediction - Understand how the company allocates its ICT budget across the core areas of enterprise ICT spend, namely hardware, software, IT services, communications and consulting.
Reasons to buy
  • How does Hilton Worldwide Group rank among peers in terms of number of rooms and properties globally?
  • What are Hilton Worldwide Group’s main growth strategies and how successful has the company been at implementing them?
  • How has the company performed since 2014 in terms of its segments operating revenue, ownership, management & franchise and timeshare?
  • How has Hilton Worldwide Group performed in comparison to competitors such as Shanghai Jin Jiang, MGM Resorts International, Accor Hotels and Wyndham Hotel Group?


Company Snapshot
Company SWOT Analysis
Growth Strategies
Company Performance
Competitive Landscape
Deals
Key Developments
ICT Spending Predictions
Financial Summary
Appendix

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