Hilton eyes growth in APAC, set to open 2 hotels a week in the region in 2022

THE Asia-Pacific region accounts for just around 10 per cent of Hilton's global portfolio now, but the hospitality group has its sights set on growing that share of the pie.

"Asia-Pacific will continue to be a bigger part of the business," Hilton president and chief executive officer Christopher Nassetta told reporters at a roundtable in Singapore on Thursday (Apr 7).

"We have about 300 million people in the United States, and we have 5,000 hotels. There are 4 billion (in Asia-Pacific) and we have 523 hotels. So on a per capita basis, this is where we will see the highest growth… We are in our infancy in growth potential in the Asia-Pacific," he said.

The US-based multinational company's upcoming plans reflect this. In addition to the 523 hotels it operates in the region, another 760 hotels are in the pipeline.

This comes after a record year for the company in the region. Hilton signed deals for 247 new hotels and opened 100 new hotels in 2021, adding to its books a hotel every 4 days on average.

In November last year, it opened its 500th hotel in Asia-Pacific, the Hilton Nagasaki in Nagasaki, Japan.

In 2022, it plans to outdo itself by launching 2 hotels every week. Taken together, Hilton is set to grow its Asia-Pacific estate by close to 150 per cent.

As travel restrictions ease globally, Nasetta says the Virginia-based hospitality group is ready to target all customer segments.

"During Covid, we re-tooled our salesforce to go where the fish were, which were leisure spaces pretty much uniformly across the world."

Before the pandemic, around 70 per cent of Hilton's business was in business travel and MICE (meetings, incentives, conventions and exhibitions).

This came down dramatically when Covid-19 hit, while leisure travel more than doubled to about 50 to 60 per cent, from 25 to 30 per cent.

"At the moment, at different speeds around the world, we are retooling our salesforces back in a more balanced way as demand from other segments picks up," said Nasetta.

In Asia-Pacific, Hilton's APAC president Alan Watts said its sales teams are reacting quickly to capture travel demand wherever it goes.

"Our teams have to be mindful of having a domestic plan that they are activating today, and an 'international switch' on the shelf at any one time to follow restrictions getting lifted," he said.

Zeroing in on Singapore, Watts believes that pent-up leisure and business travel demand to the Republic is "already back on pace". He expects the tourism sector here to see recovery closer to pre-pandemic levels in Q3, if not Q4 2022.

He pointed to its hotel here, Hilton Singapore Orchard, which is performing 30 per cent higher than expected though it opened only in February this year.

"The minute you hear China's outbound travel is happening, I would assume that we are back to 2019 levels, if not beyond," he added.

When asked about the challenges facing the industry, such as rising costs, Nasetta was optimistic that these would not greatly impact Hilton's recovery plans.

For one, he noted that inflationary pressures have not made much of a dent on travel spending.

Echoing him, Watts said many have armed themselves with "travel war chest", and Hilton's booking pace and booking demand has remained healthy.

Some hotel operators may engage in a price war to win customers back, but Nassetta said Hilton's focus is still to deliver reliability and quality service to its customers.

"Our differentiation is we just do a better job," he said. "We want to be a premium player. On average, we get paid a 15 to 20 per cent premium over our competition because we do it better. So if we are ever really just competing on price, it's a bad day," he said.

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