Simon Vincent, area president Europe for Hilton Worldwide, is responsible for 220 hotels with 25,000 employees in 31 European countries. Hilton Worldwide’s expansion policy saw it announce the largest pipeline of any hotel company in Europe earlier this year, with more than 100 hotels under development, across a portfolio of six brands from the luxury Waldorf Astoria Hotels and Resorts to the economy of Hampton by Hilton.
Do you have any preference to the way your inventory is sold?
The key is that we have good coverage in terms of our distribution and our channel segments. We choose to compete in all the segments that are available to customers. Some are clearly more attractive than others, and depending on the time of the year or day of the week, the particular client segment or the hotel, we will vary the channel to optimise our return but it’s important to have a wide, varied and credible distribution system, and over the course of the last few years we’ve done a lot of good things to strengthen our distribution, both through our relationships with third parties but also strengthening our own booking channels, whether direct through the property, our own telephone sales centres or our website.
The Hilton story seems to be about expansion. At a time when most chains struggle to gain a foothold in London, it must have been heartening to pick up the Mint properties earlier this year including the two in London.
I think it says a lot about the strength of the Hilton brand portfolio and the strength of our sales and marketing and distribution capability. It’s attractive to developers and it’s no coincidence that we have such a strong pipeline. We bring a strong performance advantage
The new owners of Mint Hotels are Blackstone, though, which also owns Hilton Worldwide. Wasn’t it a shoo-in that you’d get them?
No, it was a competitive tender and the best man wins.
How did you decide which brands the eight Mint properties should belong to?
It was pretty clear that the three principal assets – the Amsterdam Mint and the two London properties were Doubletrees. We have some fantastic properties under the Doubletree brand throughout Europe, in Milan, in London and also in Chester and Cambridge.
Did the Amsterdam Mint hotel not become a Hilton because you already have a Hilton in Amsterdam?
The Hilton Amsterdam is one of our landmark properties, it’s iconic. The trick in a city like Amsterdam or in any city is to get a broad spectrum of brands so you can appeal to different customer segments. In Amsterdam we’ve gone from one property at Schiphol plus the Amsterdam Hilton to a Doubletree, a Waldorf Astoria on its way and a Hilton Garden Inn. The new Waldorf Astoria is in an old bank building and some private residences that we are converting into a 90-plus luxury hotel. It is a superb location, it’s one of a kind. Amsterdam as a market has performed very well and it makes sense to have the brands there.
We’ve probably seen more luxury deals coming our way in the last six or eight months than we have in a while. We’ve got 22 Waldorf Astorias, worldwide, operating. In Europe there's the Rome Cavalieri, the Trianon Palace Versailles, and London Syon Park. There are also 12 in the pipeline including Berlin (2012), The Caledonian, A Waldorf Astoria Hotel (2012), Jerusalem (2013) and Amsterdam (2013).
How are things across Europe?
We’ve been in recovery for two years now. It was an occupancy led revival initially with some markets having rate hardening, but this year we’ve seen a continuation of the recovery and we are positive in rev par terms. It’s fair to say the first three quarters were stronger than the final quarter. London has softened a little bit, but it has been incredibly strong over the course of the last 18 months. France, Germany and Turkey were all strong. Israel as well. It’s been a little more challenging in Spain, Portugal and Greece as you would expect, and parts of Eastern Europe, Czech Republic, Romania and Hungary. Poland in general has been very resilient. The Nordics have been fairly buoyant. It’s a mixed picture.
In the UK, the regions are challenging but still positive, with low single digit rev par growth in most of the provinces. The further you get away from London as a rule of thumb the harder it gets, though it’s been relatively strong in Edinburgh, Glasgow and Manchester and some of the bigger cities. There’s no question there’s a two-speed market in the UK. London is a global financial centre and is pretty unique in terms of its resilience but the provinces are tougher.
Do you find it difficult explaining why your focused service brands have free wifi, but the full service and luxury brands don’t?
No it’s all part of the brand proposition. Each has got a very clear customer proposition and they stand on their own feet in that regard.
Will the Olympics be positive, business-wise for Hilton in the UK?
If you look at that third quarter in London it will be a very strong period. We have Farnborough Air Show, then the Olympics and then the Paralympics. As part of the bid we gave away 65 per cent of our inventory in London at predetermined rates. In the lead up to the Olympics there’s a lot of speculation about people being deterred from coming to the city, but London is very different from Sydney and Athens. London is a financial hub and I think it will be resilient throughout the period.
One gap in the portfolio is for an extended stay brand.
We have no plans for extended stay in Europe. We run them successfully in the US. I would never say never, but no concrete plans at the moment.