HGI lays out roadmap for future growth at global conference 2015

The Hilton Garden Inn Virginia Beach Oceanfront has 167 rooms in total, all with, as its name suggests, oceanfront views.
The Hilton Garden Inn Virginia Beach Oceanfront has 167 rooms in total, all with, as its name suggests, oceanfront views.

The Hilton Garden Inn Virginia Beach Oceanfront has 167 rooms in total, all with, as its name suggests, oceanfront views.

Orlando, Fla. – Coming off a successful year in 2014, the senior executive team at Hilton Garden Inn convened its 2015 Global Brand Conference here, intent on laying the foundation for even greater success this year and into the future.

Global Head Adrian Kurre minced no words in giving the roughly 1,500 GMs, directors of sales and brand managers assembled at the Hilton Bonnet Creek complex their marching orders. Success, he explained, would depend on three specific pillars: driving revenue, encouraging loyalty and increasing profitability.

Both Kurre and Don Willingham, VP of brand performance support and sales, repeatedly made the point that “2014 being the brand’s best year yet doesn’t make it the brand’s best year ever.” Through September, the Hilton Worldwide unit saw occupancy increase 3 percent, ADR 3.8 percent and RevPAR 8 percent. Last year, saw 38 hotels joined the HGI system for a total of 618 hotels worldwide. The 19-year-old brand is currently represented in 22 countries on four continents.

A DUAL PROMISE

The conference theme—“You Can Count on Us”—was chosen for its multiple meanings, Kurre said. “On one level, it’s a promise we make our guests. But on another level, it’s the promise the executive team makes to all our team members and a promise we expect from them in return,” he said.

Driving revenue this year would entail focusing more intensely on growing rate. Willingham didn’t offer many details, but did divulge that HGI for the first time was developing a new premium room type “that would give us the ability to ask for a higher rate.”

With the brand traditionally strong with business travelers booking midweek, Mark Nogal, Hilton Worldwide regional head of focused service brand management for Europe, Middle East and Africa, told the audience “more emphasis would be placed on developing the leisure market in order to generate greater weekend and shoulder season business.”

At HGI, Hilton Honors members make up approximately 60 percent of bookings, according to Willingham. “We need to do a better job of making members feel valued and appreciated,” he said.

Nogal underscored the importance of signing up new members, noting that research indicates that “guests’ first loyalty card tends to be the one they use most often.” This is especially critical in emerging markets in Eastern Europe, the Middle East and Asia, where frequency programs may still be a relatively new phenomenon.

While the brand is moving forward with the development of a premium room product, Kurre and his team are also considering establishing a Hilton Honors floor in the hotel as another form of member recognition.

As with guest-facing technological advances generally, elite-level frequency program members are usually the first to gain access to the new tools. That would also be the case with the latest tech innovations Hilton Worldwide now has in development. These include such advances as e-check-in and what’s known as “straight-to-room,” where the guest’s smartphone functions as the room key, allowing the guest to bypass the front desk entirely.

In 2014, the brand’s “Show Me the Savings” initiative resulted in profit gains of roughly $150,000 per hotel. Along with other Hilton Worldwide brands, HGI has been growing rapidly outside North America. The trend was a significant factor in 2014 and is likely to continue to gain momentum in 2015 and beyond. To bring the point home, the Orlando brand conference included attendees from regions around the world.

Nogal estimated that HGI will add 60 hotels worldwide in 2015. This will give the brand multiple units in China, Turkey, the Russian Federation and the United Arab Emirates, as well as one-offs in markets as diverse as Saudi Arabia, Uruguay and Zanzibar. In China, there are 20 projects in the pipeline, with more to come.

With an eye on HGI’s long-term brand recognition around the world, Nogal noted that, “with every new hotel, our visibility grows proportionately.”

ECONOMIC REALITIES

Yet global growth of any hotel brand comes with a set of economic realities. “Right now, many of the economies in Western Europe are struggling, which means it is difficult to finance new construction,” Kurre said at a media roundtable.

Citing another example, he explained that in recent years Russia has been an active market for development. “But with the unexpected changes in the global oil industry in the past few months, that may be changing,” he said.

In HGI’s favor, an upper mid-market brand may be a better fit for a market that is struggling economically, considering the rate structure and value proposition, than a more expensive full-service upper-upscale brand.

Another plus for HGI is the familiarity—and comfort level—developers and consumers worldwide have with the Hilton name. “We’re fortunate to have the name as part of our identity,” Willingham said.

There’s no question that HGI is committed to its long-term global expansion strategy, short-term bumps in the road notwithstanding.

A high point of the conference was the presentation of awards that recognized distinguished performance in 2014. The highest award is called the Connie, named in memory of Hilton Worldwide founder Conrad Hilton. Two properties were recognized: Hilton Garden Inns in Mobile East Bay/Daphne, Ala., and Krasnodar, Russia.

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