Hilton's New Plan to Dominate Middle-Class Travel

26.09.2023 - 23:47 / skift.com / Sean Oneill / Chris Nassetta / Josh Corder / Hilton Hotels

Hilton CEO Chris Nassetta opened the Skift Global Forum 2023 Tuesday in New York City. He addressed the group’s recent move to display mandatory fees; how he is working to address the greatest hurdles in travel as chair of U.S. Travel; and the introduction of its new brands Spark and “Project H3” as part of a new mission for Hilton to dominate middle-class travel.

“It is not our sexiest brand, but it is the most disruptive,” said Nassetta, speaking of the newly unveiled Spark brand. Announced in January and with its first opening in the U.S. last week, Spark puts Hilton into the $80-$100 a night tier of hotels.

According to Nassetta, this brand, and other economy brand launches to follow, present the greatest growth opportunities for Hilton. Nassetta shared: “Spark is a great example of economy. We’re not in that space yet. The biggest segment of demand is economy. We hadn’t figured out how to do it and afford to have the service levels we needed. Now, we figured it out. We figured out how to touch every element of the customer-facing experience.

“We’re going to serve tens of millions of incremental customers we’re not serving today.”

Nassetta said Spark has strict requirements when converting from other brands, which will help maintain consistency in the economy segment. He also shared his vision to use hotels such as Spark as feeders into his more expensive properties.

At a lower end of the market, Spark and other future economy launches will service young people. But, as those young people grow up, they will gravitate to grander brands such as LXR and Waldorf Astoria.

The CEO explained: “There’s a whole bunch of young people, and they will go on to stay with our other brands and move around.

“I love luxury, I love lifestyle. We’re the fastest-growing luxury brands on earth. But the opportunity on a global basis for growth is in the mid-market. It’s obvious. The growth demographically is the middle class.

“Our neural network, our bulk, should be the middle market.”

During his talk with Skift Senior Hotel Editor Sean O’Neill, Nassetta touched on the “junk fee” issue sweeping across hospitality. Skift was first to report earlier in the week Hilton’s choice to “quickly” act to “ensure mandatory fees are displayed upfront on all Hilton websites and apps.”

The CEO said that Hilton is already doing its part, thus putting the onus on online travel agencies and other third parties.

He explained: “We’re going to give total transparency; we’re going over and above. In the end, we don’t want consumers confused about what they’re buying or what they’re paying for. But the issue is complicated. In the hotel space, most of us are going towards the right place, but a lot of our products are distributed