When Hilton CEO Christopher Nassetta took on the top job at the hotel giant in 2007, the company wasn't exactly known for thinking outside the box or trendy brands.
08.06.2024 - 14:35 / skift.com / Sean Oneill / Chris Silcock / Hilton Hotels
Hilton has been on a streak of acquiring hotel brands this year after going 16 years without buying any. Yet its commercial chief said that the hotel group hadn’t shifted from its decade-long corporate strategy.
“It’s driven for us by customer trends, right?” said Chris Silcock, president, global brands and commercial services. “If there is a gap in our products that customers want to stay in, then we’re going to fill it.”
In March, Hilton bought the Graduate Hotels brand. In April, it completed an all-cash purchase of a majority controlling interest in Sydell Group, which owns NoMad Hotels.
Hilton’s sudden shopping spree was a hot topic among hotel investors and owners at this week’s NYU International Hospitality Industry Investment Conference, with many speculating about potential future deals.
Silcock acknowledged that Hilton’s moves were unexpected, but he said they were consistent with the company’s long-term corporate strategy and were “purposeful and paced.” He also discouraged speculation that the company would do a lot more deals this year.
“We’ve been crystal clear on the formula for M&A, which is that brand can’t be duplicative with what we have and a deal has to make financial sense,” Silcock said. “Nothing has ever met those criteria over a long time, and it just happens that these two deals did at the same time.”
With the Graduate Hotels deal, Hilton entered into associated franchise contracts for a set of 33 open and 2 planned lifestyle hotels in university towns, for $210 million.
“It was a bit of a surprise when we came across it,” Silcock said. “I don’t think anywhere in the world have I found such a dedication to college pride and affinity to one’s university as in the U.S., where it’s almost a part of one’s identity. Graduate has tapped into that in a way none of our brands, or our competitors’ brands, ever has.”
Some observers question whether the college affiliation appeal will translate internationally, but Hilton plans to try to scale the brand to at least 400 Graduate Hotels worldwide.
“We can plug them into our commercial engine and our development engine, and we know that suddenly the performance of the existing hotels will pop and the growth of their pipeline will pop,” he said.
Silcock called the NoMad Hotels move “opportunistic.” But the purchase surprised some industry observers. NoMad only has two operating hotels, despite having been invented in 2012. (One of those hotels isn’t being bought by Hilton. The NoMad Las Vegas, which is within an MGM Resort property, will be rebranded by its owner.)
Having only two hotels after a decade doesn’t seem like a roaring success to some observers.
“Covid really hurt it,” Silcock said. “That was a stumbling block. But I do believe
When Hilton CEO Christopher Nassetta took on the top job at the hotel giant in 2007, the company wasn't exactly known for thinking outside the box or trendy brands.
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