Hilton’s CEO discusses new brands, legacy, and the thriving Hilton Honors loyalty program.

When Christopher Nassetta became Hilton’s CEO in 2007, the company was not particularly known for its innovative approach or trendy offerings.

"We were in a state of complacency. Innovation wasn't part of our culture; it was more about maintaining the status quo at a slow pace," Nassetta remarked to the Washington Post. "Our organization simply wasn't aligned for success."

Fast forward 17 years, and Hilton has transformed into a formidable player in the hospitality industry, catering to a diverse range of travelers and budgets.

Looking for luxury camping? They've got it. Interested in lifestyle hotels? Absolutely, with significant expansion plans underway. And for those seeking classic ultra-luxury? They've got you covered. Plus, they recently secured a partnership with Small Luxury Hotels of the World, taking it from Hyatt earlier this year.

Indeed, there's also what some label as the company’s "category killer" entry into the budget market with Spark, a brand introduced last year aimed at the $100-per-night hotel segment.

What has shifted at Hilton over the years since that era of complacency?

"I’d attribute our performance to grit, determination, competitiveness, and an entrepreneurial mindset to innovate," Nassetta stated in a recent interview with TPG during the NYU International Hospitality Industry Investment Conference.

With 24 hotel brands in its portfolio — ranging from the budget-friendly Spark to the luxury Waldorf Astoria — and a loyalty program boasting nearly 190 million members, the company is undergoing significant growth and transformation, mainly through internal brand launches rather than acquisitions.

However, things shifted slightly in the past year as the company acquired the Graduate lifestyle hotel brand and took a majority interest in the parent company of NoMad Hotels, enhancing its foothold in the luxury lifestyle hotel sector.

"My background is in M&A, so I'm not opposed to acquiring brands," Nassetta shared about the choice between buying and building. "However, I am fundamentally a disciplined individual. Therefore, my guiding principle has always been what benefits our customers and our shareholders economically."

The growth of Hilton Honors and its partnerships

While Nassetta refrained from commenting on speculation that Hilton Honors may soon surpass Marriott Bonvoy as the largest hotel loyalty program, he eagerly highlighted the strength and expansion of Hilton’s network.

Hilton Honors gains about 80,000 new members daily, and the loyalty program represents approximately 64% of total Hilton room night bookings. The aim is to increase that to 65% by the end of the year, with Nassetta optimistic it could eventually reach 75%. Additionally, the company is expanding into more experiential offerings within the program.

"I want growth, but I also seek engagement that ultimately enhances satisfaction and market share, encouraging owners to reinvest," he stated. "That’s my perspective on our ecosystem."

Additional growth opportunities arise from Hilton's cobranded credit card collaboration with American Express. Hilton was the first co-brand partner for American Express in the 1990s, and this partnership — with American Express as the exclusive issuer of Hilton's cobranded credit card — was renewed last year with a decade-long extension.

"This extension reinforces the strong foundation we've established with Hilton and provides us with ample opportunity to invest in products and services, attract new customers, and strengthen our ties with existing ones," American Express CEO Steve Squeri mentioned during an earnings call last year.

"Despite significant growth, we believe there’s still substantial potential ahead," Nassetta noted in his recent conversation with TPG.

Luxury, lifestyle, and budget-friendly brands

It’s challenging to identify a single path Hilton is pursuing lately, as brand expansion covers various aspects of the travel landscape.

Both Spark and LivSmart Studios launched last year, targeting more budget-friendly segments and extended stays. Graduate and NoMad will enhance Hilton's footprint in the trendy lifestyle hotel market, currently led by brands like Marriott's Edition, Accor, and Ennismore’s The Hoxton and Standard International. Hilton's partnership with AutoCamp also positions it in the growing high-end camping sector.

The company’s legacy brands are experiencing significant growth as well: Waldorf Astoria has a development strategy that could expand its 35-hotel portfolio by 75%, with recent openings in the Seychelles and Doha, and forthcoming launches in London; Hanoi, Vietnam; Costa Rica; Kuala Lumpur, Malaysia; Jakarta, Indonesia; Sydney; Tokyo and Osaka, Japan; and Riyadh, Saudi Arabia. The long-anticipated reopening of the Waldorf Astoria New York is also on the horizon.

Are there still any gaps for Hilton to fill in its brand portfolio?

"What I'm really urging our team to focus on is how, now that we have the right brands in place, we can continue to refresh our legacy brands to keep them vibrant," Nassetta explained. "We need to ensure that our new brands are properly launched and scaled, and we must fully integrate these 'new children' we've 'adopted' to maximize opportunities."

However, he later noted, "There will always be something new on the horizon."

It appears that whatever your travel aspirations may be, a Hilton brand will eventually meet that need.