The Blackstone Group named hotel industry veteran Christopher Nassetta CEO of recently acquired Hilton Hotels, snubbing the man the Hilton board had tapped earlier this year to take over as CEO.

Nassetta is currently president and CEO of Host Hotels and Resorts, a lodging real estate investment trust that is one of the largest owners of luxury and upscale hotels in the world.

He will replace Stephen Bollenbach, who retired when Blackstone completed its acquisition of Hilton on Oct. 24.

Coincidentally, Host was spun off from Marriott, its former parent, in 1993 when Bollenbach was Marriott's CFO. He later served as CEO of the company when it was known as Host Marriott.

Hilton's president and COO, Matthew Hart, who had been selected in May to replace Bollenbach in January 2008, will step down but remain on the board, Blackstone said.

Industry consultant Rick Swig, president of RSBA & Associates in San Francisco, said he was surprised that Hart was passed over.

"I really like Matt Hart," said Swig. "But I guess everyone wants to bring in their own person. Chris is a brilliant man and a phenomenal choice."

But Hilton's gain is a "dramatic loss" for Host, Swig said.

The Host Hotels board appointed its CFO, W. Edward Walter, to succeed Nassetta as president and CEO, effective immediately. Nassetta will remain at Host until the end of November to help with the transition.

"Given his background overseeing the world's largest hotel ownership company, Chris understands the needs of hotel owners and is uniquely qualified to lead Hilton," said Jonathan Gray, senior managing director of Blackstone.

Blackstone last week reiterated its commitment to growing Hilton and said it had no plans to sell any of the company's brands or major assets.

  Blackstone said its strategy for Hilton included maintaining strong unit growth in the U.S., where it said more than 20% of all hotel rooms currently under construction carry one of Hilton brands.

Blackstone said it also would invest to accelerate the company's international growth, building on recently formed partnerships and new opportunities created by the 2006 merger of Hilton Hotels and Hilton International.

Blackstone said it intended to incorporate a significant portion of its existing portfolio of luxury hotels and resorts onto the Hilton platform.

Blackstone's holdings include such upscale properties as the Boulders Resort & Golden Door Spa in Scottsdale, Ariz.; El Conquistador Resort & Golden Door Spa in Fajardo, Puerto Rico; and the Boca Raton Resort and Club in Boca Raton, Fla.

To contact reporter Jeri Clausing, send e-mail to [email protected].

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