MIAMI -- Hilton
International took its first steps into the world of hotel
franchising about a year ago, and the decision is beginning to pay
off, the company said.
becoming more of a significant part of our business, said Howard
Friedman, president of the Americas for Hilton International. Weve
made quite a bit of progress. Weve signed 10 [franchise deals] and
have another 20 in the pipeline.
The U.K. company,
which controls the Hilton brand outside the U.S, owns and/or
manages approximately 400 hotels, mostly in the U.K. and
Because it is seen
as a good growth strategy, the company has been franchising its
Hilton and midmarket Scandic brands.
Hotel Group rebranded eight properties as Hiltons and Princess
Hotels & Resorts Corp. rebranded the Hotel Princess Zona Rosa
in San Salvador, El Salvador, as a Hilton.
Friedman said he
hopes to do two more franchise deals with Princess Hotels. But
Hilton International has no plans to franchise its luxury Conrad
A joint venture of
Hilton Hotels Corp. and Hilton International, Conrad has 17 luxury
hotels and plans to grow the brand to 50 hotels by 2010, but not by
Those will be
management agreements, Friedman said. There will be no franchising
of that brand. It is a very difficult, and probably wrong, concept
to franchise your five- or six-star brand.
New Conrad Hotels
are set to open in Tokyo and Phuket, Thailand, this year. Two more
are set to debut in Las Vegas and Indianapolis in 2006, and another
in Dubai in 2007. Also, Hilton International is considering deals
in the Caribbean that may include a condominium
As with any large
hotel group, the Hilton International portfolio is not only a story
of growth. Sometimes properties leave the group, as when the
company recently divested itself of 11 hotels in the
International, which saw profits rise 41% last year, decided to
dispose of the properties because they would have required
considerable capital investment to continue to meet Hiltons brand
Friedman said other
U.K. properties will likely be sold for similar reasons.
The plan is to
selectively dispose of maybe another couple 100 million pounds
worth of assets over the next 12 to 24 months, Friedman
He was quick to
note that Hilton International is not abandoning a long-held
strategy of owning hotel assets.
There is a cycle to
real estate. You do buy and sell, Friedman said. You time things,
and we do feel that the market in the U.K. is quite strong now. We
think the cash flow from the hotels is good. It all comes together.
Timing is everything. If you want to sell a few hotels, now is a
good time to do it. But we are not out there looking to raise
capital. We have a very good balance sheet.
That said, Friedman
added, We are not becoming the next InterContinental Hotel Group, a
reference to that chains recent move to sell a large number of
reporter Michael Milligan, send e-mail to [email protected].