IHIF Asia Preview: How Hilton plans to grow

To get a sense of how the region is evolving, we caught up with Clarence Tan, senior vice president, development, Asia Pacific at Hilton.

Tan will be speaking on a panel entitled ‘From Vision to Venture: Crafting Distinctive Hospitality Brands Inspired by Asia's Success Stories ​’ (Wednesday, September 11, 2024 11:50am-12:20pm)

Hospitality Investor: What is Hilton’s strategy when it comes to the Asia-Pacific region?

Clarence Tan: Our growth strategy is focused on deploying the right brands, in the right places, at the right time. Working with key partners, we see growth opportunities across Asia Pacific – and that strategy is bearing fruit, with one in four hotel rooms currently under construction in the region bearing a Hilton flag.

We are meeting growing demand for upscale and affordable accommodation among the region’s growing middle class by expanding our focused service brands like Hilton Garden Inn and Hampton by Hilton. The growing desire for personalized, meaningful experiences, holistic wellness, and sustainable travel is driving demand for luxury accommodations, positioning us to double our regional luxury portfolio — across our Waldorf Astoria, Conrad and LXR brands – in the coming years.

Secondly, we are also focused on providing locally relevant distribution channels and platforms to provide customers with more convenient and personalized services and experiences, such as our mobile messaging platform that enables immediate information exchange between guests and hotel teams, our loyalty tie-ups such as our new partnership with Starbucks in China and confirmed connecting rooms for guests upon booking.

Lastly, we build our network effect by building our global presence and delivering industry-leading performance with our owners.

Hospitality Investor: In which markets do you see the most opportunity?

Clarence Tan: In short, we see opportunity in countries across the region.

In China – we’re growing rapidly and are approaching 700 properties in the country as we meet strong domestic travel demand and aim to increase our share as Chinese consumers continue to travel abroad.

South Asia is also showing great promise, with the Indian hospitality market projected to reach USD 31 billion by 2029. Having recently opened our first hotel in Nepal, Hilton Kathmandu, our ambitious long-term strategy involves exploring numerous opportunities in India’s diverse landscape to cater to different customer segments – from upscale luxury to full and focused service, which will put us on track to triple our trading estate in this region to 75 hotels by 2027.

We are also spreading our wings in South East Asia to capture intra-Asian and global travel momentum. We recently announced the signings of 11 new properties across Thailand, Indonesia, and Vietnam, including the debut of Tapestry Collection by Hilton in SEA. We are driving momentum across multiple brands and emerging destinations, including a new market entry into Laos later this year. With 58 hotels trading currently and 47 in the pipeline, we aim to double our portfolio in South East Asia in the coming years.

In Japan, we are bringing new brands to market to meet rising demand, including our first Canopy by Hilton in Osaka. We are also soon opening a Hilton in Kyoto following two DoubleTree by Hilton properties in Kyoto and Osaka respectively. In the years ahead, we’re looking forward to opening the Waldorf Astoria Osaka and Waldorf Astoria Tokyo Nihonbashi.

Hospitality Investor: Which of your brands resonate most in Asia-Pacific?

Clarence Tan: Our luxury brands in this region, Waldorf Astoria, Conrad Hotels & Resorts and LXR Hotels & Resorts represent a significant portion of our global luxury portfolio and pipeline. We’re seeing rapidly increasing affluence, coupled with a high demand for unique and personalized experiences, energizing our luxury brands further in this part of the world. Our exclusive partnership with Small Luxury Hotels of the World brings a complementary suite of incredible boutique hotels to our customers. Around 400 hotels have joined our booking system so far, and we expect more to join us in the coming months. 

We’re also seeing a growing wave of millennial travelers, who seek upscale, affordable accommodations complete with modern amenities. This enables us to rapidly expand our focused service brands, such as Hilton Garden Inn. Currently, close to half of the brand’s global pipeline sits in this region. In China, Hilton Garden Inn has rapidly expanded since launching its franchise model in 2021, with more than 70 properties currently trading and more than 160 in the pipeline. The recent debut of the "Hilton Garden Inn Gen A," set to debut in key cities, further underscores our commitment to regionalizing the brand and catering to demand.

Hospitality Investor: Are there any new Hilton properties or upcoming projects in the Asia-Pacific region that you are particularly excited about?

Clarence Tan: We’re particularly looking forward to the debut of the Waldorf Astoria Osaka next year. Osaka has been a strategic location for Hilton, and this deal reflects the optimism we collectively have in Osaka’s burgeoning travel market, in time for the World Expo in 2025. We are also making an important debut into India’s weddings capital with the Conrad Jaipur in 2027 adding to Conrad properties in Pune and Bengaluru, and following the signing of India's first Waldorf Astoria in Jaipur last year. In addition, we are bringing new brands to new markets with the debut of our Tapestry Collection by Hilton brand in South East Asia, with Tapestry Collection by Hilton Hoi An. This builds on the expansion of our lifestyle debuts following the arrival of Curio Collection by Hilton in Vietnam last year with La Festa Phu Quoc, Curio Collection by Hilton.

Hospitality Investor: How effective is the Hilton Honors program in the Asia-Pacific region, and are there any plans to enhance it specifically for this market?

Clarence Tan: Hilton Honors is the fastest growing hotel loyalty program around the world, with close to 190 million members. The commercial strength and appeal of Hilton Honors significantly contributes to our growth in Asia Pacific, giving us a pipeline of loyal customers. Through the Hilton Honors app, we break through the sameness of perks and points by Contactless Check-Ins, Shareable Digital Room Keys, Confirmed Connecting Rooms, and early confirmation of Complimentary Room Upgrades.

In recent months, we have also forged new partnerships to create more ways for guests to dream and book experiences via Hilton channels. Our partnership with Small Luxury Hotels of the World unlocks even more opportunities for Hilton Honors members to earn and redeem points at nearly 400 small luxury hotels in additional destinations around the world. Our exclusive partnership with Starbucks China enables reciprocal membership benefits and fast-tracked elite status for both Hilton Honors and Starbucks Rewards members in China.

Hospitality Investor: The theme of this year's event is "Charting New Horizons". What do you think are the biggest opportunities in hotel investment in the region?

Clarence Tan: As travel in Asia Pacific continues its upward trajectory, franchising is becoming an increasingly important business model in the region, which is home to a large group of independent hotels.

While management agreements remain the dominant model in Asia Pacific, the appetite for franchising is on the rise, particularly in South East Asia, as markets mature and third-party operators become more established. Following the success of franchising Hilton Garden Inn, we expanded our franchise model in Greater China to include DoubleTree by Hilton – widening the spectrum of opportunities for developers and owners to drive growth in the full service segment. 

By Patrick Whyte