|BEVERLY HILLS, Calif. - Dec. 6, 2005 -- Hilton Hotels Corporation (NYSE:HLT)
announced that its Hilton Family of Hotels led the U.S. hotel industry
in new room additions from new construction and brand conversions in the
first three quarters of 2005 and is projected to maintain that position
at least through 2007, according to data recently released by Lodging EconoMetrics(LE),
the nation's hotel real estate investment and supply side research authority.
According to LE, the Hilton Family of Hotels is expected to add approximately
170 hotels and 24,000 gross rooms to its system in 2005, up from 122 projects
with 15,227 rooms in 2004, the year that Hilton became the hotel industry
leader in number of new rooms added. Through the first three quarters of
2005, the Hilton Family opened or re-flagged 127 hotels, aggregating 17,731
Hilton anticipates a 6.3 percent addition to its U.S. room supply in
2005, up from 4.4 percent in 2004. In 2006, the company expects to add
175 to 200 hotels and 23,000 to 27,000 rooms to its system. Hilton reported
560 hotels and 75,000 rooms in its development pipeline - the largest it
has ever been -- as of September 30, 2005.
As of the end of the 2005 third quarter, LE data indicates that Hilton
accounts for 17.4 percent of all rooms in the U.S. Active Construction
Pipeline (hotels currently under construction or expected to begin construction
in the next 12 months). According to LE, InterContinental Hotels Group
is projected second with 14.4 percent of rooms and Marriott third with
13.5 percent of rooms.
"Our development pipeline has never been larger, and we maintain our
industry leadership position in U.S. hotel development," said Tom Keltner,
president-brand performance and development group, Hilton Hotels Corporation.
"Validated by another record quarter of management and franchise business
in the third quarter 2005, owners and developers recognize that the Hilton
Family of Hotels offers unsurpassed program support, providing hotels with
the tools to help achieve success: superior technology solutions and increasing
online bookings performance on brand.com; HHonors, a leading guest reward
program; strong worldwide sales support; excellent year-round and seasonal
marketing programs; highly effective cross-selling practices within its
worldwide reservations centers; and award-winning brands.
"When we look at the development cycle, developers and lenders continue
to recognize the importance of strong brands and have favored them during
the current upswing in the hotel industry, as evidenced by our leadership
in the hotel industry development pipeline."
LE has reported that few new hotel projects have entered the construction
pipeline in the central business districts of major cities, which is typical
in the early phase of a hotel industry rebound. As a result, most new construction
is occurring in the focused-service sectors.
"Based on forecasts by industry consultants, the outlook for development
remains strong at least for the next several years," said Bill Fortier,
senior vice president - franchise development, brand performance and development
group for Hilton Hotels Corporation. "We see strength across all of our
brands in the U.S., as well as continued growth in Canada and Central and
Brand Development Highlights
|Hilton® -- According to internal data, the Hilton flagship
brand added 11 properties with 2,975 rooms in the first three quarters
of 2005. Throughout the next several years, hotels will undergo a major
enhancement program including upgrading beds, called Hilton Suite Dreams®,
and new bathroom amenities created exclusively for Hilton by Crabtree &
Evelyn, called La Source, offering an appealing scent for males and females
alike as part of the Hilton Serenity Collection™. New metal accessories
include: a soap dish, tissue box cover, amenity tray, waste basket, ice
bucket, ice bucket tray, memo pad and pen holder. Armoires are being removed
to create more space in the guest rooms, while 19-inch televisions are
being replaced with larger flat-tube televisions. A complimentary, in-room
fitness-in-a-bag program, called Hilton Fit Kit by Bally Total Fitness®,
was introduced at participating hotels in early 2005, enabling guests to
continue their fitness regimen in the privacy of their guest rooms while
on the road. All hotels will offer high-speed Internet access - either
wired or wireless, depending on the location. Select locations also will
offer PrinterOn™ service, which enables guests to send print jobs from
laptops in their guestrooms directly to the hotel’s 24-hour business center
for pick-up at their convenience.
In addition, more than 145 Hilton hotels are undergoing a total of $900
million in hotel renovations over a two-year period to enhance their product
offerings, increasing their level of comfort while instilling the unique
expression of local and regional culture into hotel decor and services.
|Conrad — According to corporate data, the luxury brand of the
Hilton Family—a joint-venture between Hilton Hotels Corporation and Hilton
International Co.—opened its 18th property -Conrad Tokyo—and first in Japan,
in July 2005. The company plans to expand the brand to 50 properties worldwide
by 2010, with six Conrad hotel projects currently in development, ranging
from Las Vegas to Beijing. Hilton Hotels Corporation will assume management
of these projects.
|Doubletree® -- Doubletree continues to focus on conversions
of existing upscale hotels as a primary growth strategy. Internal data
notes that the brand added 11 hotels and 2,601 rooms to its system in the
first three quarters of 2005, primarily through conversions, with 25 in
the pipeline. The brand will represent approximately 7 percent of the total
Hilton Family openings in 2005. System-wide, Doubletree launched an aggressive
product enhancement program in the spring of 2004 that includes more than
$375 million of investment by the brand’s hotel owners. An example of these
efforts is the Sweet Dreams® by Doubletree Sleep Experience—the brand’s
new sleep standard, high-speed Internet access in all guest rooms and secure,
remote guest printing services, a new bathroom standard across all hotels
and a specially designed bathroom amenity collection. A testament to the
growing success of its focus on upgraded accommodations and enhanced service,
the brand increased its customer satisfaction scores by more than 20 points
in 2005 over 2004 in the J.D. Power and Associates 2005 North America Hotel
Guest Satisfaction Index Study(SM) upscale segment.
|Embassy Suites Hotels® -- Embassy Suites Hotels will represent
5% of the Hilton Family openings in 2005, with six hotels and 1,483 rooms
opening in the first three quarters of 2005. The brand’s Developer’s Advantage™
Program, an incentive program for development of new Embassy Suites Hotels
announced in January 2004, offers reduced fees, marketing and training
incentives and other perks, including one million Hilton HHonors® points
to redeem for free nights and vacation packages at any Hilton Family of
Hotels worldwide and for a variety of unique merchandise with HHonors travel
The brand increased its guest satisfaction scores in the J.D.
Power and Associates 2005 North America Hotel Guest Satisfaction Index
Study(SM), placing second in the upscale segment. In 2004, Embassy Suites
Hotels introduced the Embassy Suites Hotels Essential Bedding Collection
to its 175 hotels, with completion of its bedding program targeted for
year-end 2007. In addition, all Embassy Suites Hotels have upgraded their
bath towels to be larger and fluffier. All guest suites feature high-speed
Internet access, with wireless access in the public spaces of the hotels.
|Hampton Inn®/Hampton Inn & Suites® -- The Hampton
Hotels growth continues to reach into all markets with openings ranging
from Manhattan to Americus, Georgia, with a population of less than 20,000.
The brand remains quite active west of the Mississippi, with nearly one
third of the new Hampton hotels opened in 2005 occurring in that part of
the country. According to corporate internal data, Hampton will represent
approximately 43 percent of the Hilton Family of Hotels openings in 2005.
The brand opened 50 hotels and 4,562 rooms in the first three quarters
In 2004, the brand launched a complete make-over of its product with
its “Make It Hampton” program, which further improved its leadership in
its segment. More recently, Hampton announced Cloud Nine. The new bed experience
by Hampton, a highly enhanced bedding program that raises the bar within
the mid-priced hotel segment. Installation of new beds in all 1,300-plus
Hampton Inn hotels will be completed by June 2006.
|Hilton Garden Inn® -- Hilton Garden Inn will represent
approximately 21 percent of total openings among the Hilton Family of Hotels
in 2005, according to internal corporate data. Having opened 26 hotels
and 3,793 rooms through the end of the third quarter this year, the brand
still has significant room for expansion with few of the proximity impact
issues faced by its largest competitor. The average age of the hotels in
the system is approximately five years, which makes it very attractive
to prospective owners and to business and leisure guests alike.
In 2005, the brand began a major enhancement program whereby it launched
its Garden Sleep System™ bed, the addition of a Herman Miller Mirra™ chair
in all guest rooms and 26” Philips flat-screen high-definition televisions.
|Hilton Grand Vacations Club® -- By providing high quality
properties in desirable locations, and by managing the business effectively,
the company’s timeshare business continues to show strong results. Phase
II of HGVC’s project on the Las Vegas Strip, which consists of 431 units,
is on schedule for completion in summer 2006. In the first quarter, ground
was broken on the 70-unit Phase V of the HGVC’s Tuscany Village property
in Orlando, with completion scheduled for spring 2006. During the second
quarter of 2005, Hilton completed a transaction whereby it will acquire
112 acres of undeveloped land on Hawaii’s Big Island for $65 million. The
company is likely to utilize the land for future timeshare development,
but specific plans are still being determined.
|Homewood Suites by Hilton® -- With 162 hotels open as of
September 30, 2005 and adding 20 hotels and 2,054 rooms in the first three
quarters of 2005, according to internal corporate data, the Homewood Suites
by Hilton upscale extended-stay brand will represent approximately 13 percent
of total 2005 openings within the Hilton Family of Hotels.
In 2001, the brand opened its 100th hotel a decade after its inception.
In contrast, the 200th hotel will open in less than half the time, with
significant room for continued growth - a testament to its evolution as
a formidable brand and to the demand for upscale extended stay product
in the U.S. and Canada. With strong penetration in the Southern, Eastern
and Mid-Western corridors of the U.S., Homewood Suites by Hilton is aggressively
pursuing agreements to build new hotels in the West Coast region.
Earlier in 2005, Homewood introduced its Distinctly Homewood program,
a five-year enhancement program that will further upgrade the brand’s product
offering, from the guest rooms, kitchen and bathroom to public space and
including training and guest service programs. The enhancement program
will be completed by 2009, the brand’s 20th anniversary.
About Lodging Econometrics
LE, located in Portsmouth, N.H., is the industry's only comprehensive
hotel real estate research firm. Its on-site research staff identifies
and tracks more than 3,000 actual hotel projects currently in the development
pipeline with each developer and re-affirms the data with each hotel brand.
About Hilton Hotels Corporation
Hilton Hotels Corporation is recognized internationally as a preeminent
hospitality company. The company develops, owns, manages or franchises
approximately 2,300 hotels, resorts and vacation ownership properties.
Its portfolio includes many of the world's best known and most highly regarded
hotel brands, including Hilton®, Conrad®, Doubletree®, Embassy
Suites Hotels®, Hampton Inn®, Hampton Inn & Suites®, Hilton
Garden Inn®, Hilton Grand Vacations Club® and Homewood Suites by