Hilton Brands Post Strong Third Quarter Development
Activity
BEVERLY HILLS, Calif. - Oct. 31, 2002-- Hilton Hotels Corporation (NYSE:
HLT) today announced that its brands opened 38 hotels in the 2002 third
quarter, almost exclusively through franchise agreements and management
contracts, accounting for 21 percent of the 176 U.S. hotels(a) opened during
the period. As of September 30, 2002, Hilton's brands led all other hotel
companies in number of hotels in the active pipeline within the U.S., accounting
for 20.8 percent of all new projects and 19.4 percent of all rooms in the
pipeline, according to Lodging Econometrics, the industry authority for
hotel real estate.
Highlights of Hilton's development activity during the quarter include
the opening of the 150th Hilton Garden Inn(R), only six years after the
brand was launched; the opening of 11 properties west of the Mississippi,
where the Hilton Family of Hotels is placing more development focus; and
10 properties converted to the Hilton Family of Hotels.
In addition to the 38 hotels opened during the quarter, the company
added one timeshare property representing 70 rooms.
"We remain on target to add 145 hotels and 18,000 rooms to our system
in 2002," said Tom Keltner, president--brand performance and franchise
development group, Hilton Hotels Corporation. "And just as our brands continued
to gain market share from an operations viewpoint in the 2002 third quarter,
we also gained market share on the development side of our business."
Keltner attributed the solid development results in the face of a challenging
economy to the strength of the Hilton Family of Hotels. "Regardless of
the phase of the economic or real estate cycle, strong hotel brands win,"
he said. "Developers and their lenders tend to migrate to strong brands
in more difficult economic conditions because, historically, they have
performed better, and this trend certainly holds true today. The high consumer
acceptance of our brands, our powerful HHonors(R) guest reward program,
the integrity of our brands, and our ability to cross-sell between our
brands are seen as compelling advantages by developers and lenders alike.
"While financing is more difficult to obtain and the number of development
projects is predicted by industry consultants to be at or near the bottom
of the hotel real estate cycle, we see continued interest in developing
the Hilton brands, as well as increased interest in hotel owners wanting
to convert to our brands," he said.
Brand Development Highlights
-- Hampton Inn(R)/Hampton Inn & Suites(R) --
Hampton represents
roughly half of the company's overall openings.
During the 2002
third quarter, Hampton opened 18 hotels with
1,527 rooms. Five of
the hotels were opened west of the Mississippi,
where the brand is
focusing significant development attention.
The new Hampton Inn & Suites prototype,
introduced in 2001,
continues to gain in popularity with the development
community.
More than half of the Hampton hotels currently
in development are
Hampton Inn & Suites.
Urban development also continues as a viable
option, as consumers
push for more mid-priced hotel rooms in central
business
districts. The mid-market without food and
beverage sector is
underserved in most major metropolitan markets.
The brand's first
property in Manhattan -- Chelsea in Midtown
-- is expected to open
in early 2003, followed by Big Apple openings
in Manhattan/Seaport
later in 2003 and Midtown-Herald Square in
2004. The Hampton La
Guardia Airport will open in early 2005.
Hampton's smaller prototype, a hotel with less
than 60 rooms
designed for tertiary markets, also has attracted
significant
development interest. The first hotel is expected
to open in early
2003.
-- Hilton Garden Inn(R) -- Hilton's mid-scale with
food and beverage
product opened 10 hotels and 1,377 rooms during
the quarter,
including its 150th property, a 189-room Hilton
Garden Inn in
Arlington, Va.
Hilton Garden Inn developments represent one
of the cornerstones
of Hilton's franchise growth strategy. Development
interest in the
brand remains high, representing approximately
25 percent of
openings within the Hilton Family of Hotels.
More than 100 Hilton
Garden Inn properties are currently under
development in the U.S.
Hilton Garden Inn recently received the distinguished
"Highest
Guest Satisfaction Among Mid-Price Hotel Chains
with Full Food
Service" award in the J.D. Power and Associates
2002 North America
Hotel Guest Satisfaction Study(SM).
-- Homewood Suites by Hilton(R) -- Hilton's upscale
extended-stay
brand opened six hotels and 725 suites in
the quarter, including
four conversion hotels.
One of the many advantages fueling interest
in development of
Homewood Suites by Hilton hotels is the Developer's
Edge package,
which offers developers reduced royalty fees,
reduced application
fees for multiple-hotel developers, semi-qualified
sales leads,
500,000 Hilton HHonors points for new developers,
and marketing
and advertising/public relations support.
The brand opened its
100th property in April 2001 and as of September
30, 2002, has 117
hotels open.
Homewood Suites by Hilton has maintained a
strong development pace
in the past nine months, with nearly 50 properties
currently under
design or development -- a brand record. The
need for
extended-stay room nights has continued to
grow in spite of the
economic climate, as documented by the Highland
Group (hotel
investment advisors). They reported that demand
for extended-stay
room nights grew by 4 percent in 2001 compared
to overall hotel
industry demand last year, which was down
3.9 percent. Demand in
the upscale extended-stay segment was even
better, at slightly
more than 4 percent.
-- Hilton(R) -- Upscale hotels currently in operation
continue to
benefit from very little new supply being
added, especially within
markets where larger, urban Hilton hotels
operate. During the
quarter, one hotel with 385 rooms was added
to the system that
will convert to a Hilton post-renovation.
Hilton currently has nearly 30 hotels currently
approved, in
design or under construction, including convention
center hotels
in Austin (800 rooms) and Houston (1,200 rooms),
Texas and Omaha,
Neb. (450 rooms) that it will manage.
-- Doubletree(R) -- Doubletree opened two hotels
and 424 rooms during
the third quarter of 2002, representing conversions
in Key West,
Fla., and Charlotte, N.C.
The brand continues to push growth by conversions
as a highly
attractive development option, representing
roughly half of its
hotels in the pipeline. The brand is seeing
continued interest in
conversions to Doubletree of comparable upscale
hotels that stand
to benefit greatly from a highly successful
guest reward program
such as Hilton HHonors, cross-selling through
Hilton Reservations
Worldwide and support of Hilton Sales Worldwide.
Conversion
projects are underway in Livermore, CA, and
Mahwah, N.J. Hotels
under construction include Anaheim, Calif.,
Bay City, Mich. and
Springdale, Ark.
While not included in the Lodging Econometrics
active pipeline
figures, Doubletree is opening a resort hotel
in Niagara Falls,
Ontario, Canada in summer 2003.
-- Embassy Suites Hotels(R) -- Embassy Suites Hotels
opened a
150-room, Tier-2 prototype in Louisville,
Ky., in the third
quarter. The Tier-2 prototype for secondary
markets offers a
smaller footprint and is less costly to build
than the traditional
Embassy Suites Hotels design.
At the other end of the spectrum, major urban
markets also remain
an important focus, with central business
district hotels opening
in New York and Chicago within the past 18
months. The brand is
looking to increase its urban presence via
franchise or management
agreements, in additional markets such as
Dallas, San Francisco,
Seattle, Los Angeles and Boston. Next quarter,
the 174-suite
Embassy Suites Hotel Denver International
Airport will open.
While not part of the Lodging Econometrics
figures, international
development remains strong within the Embassy
Suites Hotels brand,
including openings within the next two quarters
in Niagara Falls,
Canada and Juan Dolio, Dominican Republic.
Ideal for resort
development due to their spaciousness, Embassy
Suites Hotels has
10 resort hotels open and several resort properties
under
development at a diverse range of sites, including
beach, ski and
golf destinations within the U.S., Caribbean
and in Latin America.
The hotel brand topped the upscale segment
with the "Highest Guest
Satisfaction Among Upscale Hotel Chains" award
in the J.D. Power
and Associates 2002 North America Hotel Guest
Satisfaction
Study(SM). The award marks the first time
that a hotel has
received the top award in the upscale category
for two consecutive
years and the only time a hotel brand has
received a top position
four times.
Hilton Hotels Corporation is an internationally recognized, preeminent
hospitality company. The company develops, owns, manages, and franchises
more than 2,000 hotels, resorts and vacation ownership properties.
This press release contains "forward-looking statements" within the
meaning of federal securities law, including statements concerning business
strategies and their intended results, and similar statements concerning
anticipated future events and expectations that are not historical facts.
(a) According to Lodging Econometrics, industry authority for hotel
real estate. |