Hilton CEO Chris Nassetta recently discussed the company’s focus on traditional hotels and lodging, as opposed to expanding into other categories like cruises and vacation rentals, which some of their competitors have pursued. Nassetta believes that sticking to core competencies and pursuing mostly organic growth gives Hilton an edge over their competitors who are branching out into different areas. In an interview with the Financial Times, Nassetta indirectly criticized companies that are following visions derived by marketing professionals rather than sticking to what they do best.
While Marriott International is currently the world’s largest hotel company by various metrics, Hilton is looking to chip away at their lead by staying focused on traditional hotels. Unlike companies like Marriott and Accor, who are expanding into yacht-style cruising, Hilton has avoided entering the cruise market. Instead, they are focused on maintaining consistency and quality in their hotel offerings. Nassetta believes that this approach helps to encourage loyalty among their customers who value consistent service.
In addition to avoiding cruises, Nassetta also mentioned that Hilton has not entered the professionally managed vacation rental space. While Marriott has seen success with their Homes & Villas brand, which offers vacation rentals, Hilton has chosen to remain focused on their core lodging business. Nassetta emphasized that Hilton’s growth rates demonstrate the success of their strategy, as their room count has seen a 5% compound annual growth rate over the past five years. However, due to their smaller size compared to Marriott, Hilton’s growth is not currently threatening Marriott’s lead in the market.
The Skift Travel 200 index tracks the performance of hotels and short-term rental sector stocks, including companies across global markets in the accommodations sector. This index combines the financial performance of nearly 200 travel companies worth over a trillion dollars into a single number. By analyzing the stock performance of these companies, investors can gain insight into the overall health and trends within the accommodations sector. This data can help stakeholders make informed decisions about investment opportunities within the travel industry.
Overall, Hilton’s CEO Chris Nassetta’s focus on traditional hotels and lodging, as well as avoiding ventures into cruises and vacation rentals, reflects the company’s commitment to maintaining consistency and quality in their offerings. While competitors may be exploring new areas for growth, Hilton believes that by sticking to their core competencies, they can continue to attract and retain loyal customers. The company’s growth rates and financial performance indicate that this approach is paying off, despite the challenges posed by larger competitors in the market. Investors and industry stakeholders can use data from the Skift Travel 200 index to track the performance of the accommodations sector and make informed decisions about investment opportunities within the travel industry.
