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Hotels

Hilton CEO Touts Focus on Core Hotel Business as Competitive Edge

  • Skift Take
    In an interview, Hilton CEO Chris Nassetta spoke about sticking to Hilton’s “core competencies” with traditional lodging and not expanding into cruises and vacation rentals like rivals have.

    Hilton president and CEO Christopher Nassetta believes the hotel group’s focus on traditional hotels and lodging and mostly “organic” growth gives it an edge over competitors expanding into cruises, vacation rentals, and other categories.

    In a Sunday interview in the Financial Times, Nassetta lightly and indirectly critiqued peer companies for pursuing “visions derived by marketing professionals” rather than sticking to core competencies.

    “If you’re jerking the wheel around, if you’re taking every exit, nobody can follow you,” Nassetta said.

    Why It Matters: Today, Marriott International is the world’s largest hotel company, measured by room count, revenue, and the number of members in its loyalty program. However, competitors like Hilton seek to chip away at Marriott’s lead.

    Hilton Avoids Cruises

    Nassetta said Hilton has pursued consistency, sticking with hotels.

    Marriott and Accor, by contrast, have been expanding into “yacht-style” cruising. In 2022, Marriott pioneered the category among public hotel groups by debuting Evirma, the first sailing vessel in The Ritz-Carlton Yacht Collection.

    Since then, Marriott has expanded its fleet of ships, each hosting fewer than 300 people at a time. Marriott president and CEO Anthony Capuano said at the Skift Global Forum this September that cruises represent a pillar of the company’s growth.

    Accor is set to debut a yacht-style cruise line, Orient Express Silenseas, by 2026. Other hotel groups, such as Four Seasons and Aman, are also entering the space.

    No to Vacation Rentals

    Separately, Nassetta noted that Hilton hasn’t entered professionally managed vacation rentals. Nassetta argued that Hilton’s focus on traditional hotels helps encourage loyalty by making clear it offers a consistent quality of service compared to the inconsistency he says is found in alternative lodging.

    Marriott said earlier this year that its Homes & Villas brand, which markets professionally managed vacation rentals, has grown to 160,000 listings since it debuted about six years ago. Accor has its OneFineStay brand.

    Nassetta Points to Growth

    In the wide-ranging interview, Nassetta cited Hilton’s growth rates as proof that its focus on a core lodging business is paying dividends.

    Skift noted last month that, as of mid-2024, Hilton’s room count had a 5% compound annual growth rate over the past five years. Marriott had a 4.2% rate.

    However, Hilton’s growth rate is less impressive when considering that the group is smaller than Marriott. Marriott had 1,659,000 rooms compared to Hilton’s 1.2 million, so Marriott’s lead isn’t under threat anytime soon.

    Accommodations Sector Stock Index Performance Year-to-Date

    What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.

    The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.

    Read the full methodology behind the Skift Travel 200.

    Photo Credit: Hilton CEO Christopher Nassetta spoke on-stage at Skift Global Forum on September 26, 2023.
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