WASHINGTON -- Hilton International has taken a major step into what
is a brave new world for the chain.
Hilton International, which owns the Hilton brand outside the
U.S, has decided to grow its portfolio by creating franchise
opportunities for its Hilton and midmarket Scandic brands.
Under the franchisor model, Hilton International conservatively
intends to add about 20 hotels, or about 6,000 rooms, a year,
"It doesn't sound like much, but I am being very cautious and
realistic," said Howard Friedman, president, the Americas, for
Hilton International. "I don't have grand plans of growing by
100,000 rooms a year. I would rather be conservative and
Friedman said Hilton International was previously unable to
enter the franchise market because "we have never been structured
[to] protect brand value in terms of having systems in place to
police, monitor and control [franchisees]."
"Obviously, as a hotel operator, we prefer to manage, own or
lease. Franchising does take a different mind-set," he added.
Nevertheless, Friedman said, "The reality of the world is there
are some very experienced hotel operating companies out there. They
want to retain management. That is the way of the world, and we are
happy to move in that direction."
Hilton International has already made a few franchisor
"We did one at [Hilton Narita New Tokyo International Airport] a
year and a half ago and we have one called Coral by Hilton in the
Dominican Republic," Friedman said.
With those successes under its belt, Hilton International is
looking to further grow the brand through "well-capitalized,
regional hotel companies," he said.
The firm, which owns, manages or leases approximately 200 hotels
in the U.K. and Europe, is especially interested in opening
properties in countries where "the barriers to entry are quite
steep," Friedman said, specifically in Central America.
To that end, Hilton International recently signed a deal with
Princess Hotels & Resorts Corp., which owns the 204-room Hotel
Princess Zona Rosa in San Salvador, El Salvador.
The resort will change its name to the Hilton Princess San
Salvador, becoming the first Hilton International property in
Similarly, the company signed a deal with India's Trident Hotel
Group to convert eight properties, which Friedman said will be
rebranded and reflagged in April.
Aside from Central America and India, he said Hilton
International would like to have a presence in Lima, Peru; Rio de
Janeiro, Brazil; and Santiago, Chile. The chain is also keen on
adding properties in Australia and Asia.
In addition, he said, "We are looking at how to grow Scandic and
take the brand into other parts of the world. We have a team based
in Europe that will start franchising Scandic. We think the brand
has legs elsewhere; for example, the Americas, Australia or
Hilton International has spent 12 months developing a franchisee
manual and operating procedures.
"We have learned a lot from [Hilton Hotel Corp., which owns the
Hilton brand in the U.S.]. They have been generously helping us
with the process," Friedman said.
However, he added, Hilton International is not in any hurry to
emulate other franchisors by divesting ownership of its current
"I think we will always be a company that owns, leases and
manages a fair amount of real estate," Friedman said. "We are not
actively looking to dispose of our properties.
"When we do sell assets, it will be with the intension of
attempting to maintain management of those properties," he
To contact reporter Michael Milligan, send e-mail to [email protected].