Hilton Is Betting Its Future On Upscale Brands

Hilton's Big Bet on Luxury Is All About Ordinary Road Warriors

Hilton Is Betting Its Future on Upscale Brands

Hilton's Strategy

Hilton is multiplying its inventory of luxe hotels this year by 500. It's all part of a bid to retain its most valuable customers: corporate road warriors.

The key to that growth? Higher room rates, or increased ADR (average daily rate). Given that Hilton is telling investors to expect RevPAR (revenue per available room) growth in the "high single digits" this year, the company is clearly betting that business travelers will be willing to pay more for a more luxurious experience.

Hilton's Reputation

But even Hilton's top brass concedes that the hotel behemoth's reputation lies mainly with road warriors rather than luxury seekers. In a recent interview with Bloomberg News, Hilton CEO Chris Nassetta said that the company's "core customer" is the "business traveler who's on the road 100 nights a year."

Conclusion

Hilton's bet on luxury is a risky one. The company is investing heavily in a new type of hotel that may not appeal to its core customers. But if Hilton can successfully execute its strategy, it could reap big rewards. The luxury hotel market is growing rapidly, and Hilton is well-positioned to take advantage of this trend. With its strong brand recognition and loyal customer base, Hilton could become the go-to hotel chain for luxury-minded business travelers.