Hilton FY 2010

HiltonFY 2010

Mars 2011

2

Marriott vs. its main competitorsR

oom

s ne

twor

k as

of F

Y 20

10

Source : Companies annual reports except for Hilton network, Accor internal data

88%

86%

85%

83%

68%

61%

56% 28%

208 Kr

366Kr

In ‘000 rooms

EMEA Americas

The 3rd largest global hotel group, the second if we include Timeshare segment (618 Kr)

647

613

605

~600

507

495

302

Network

13%19%

8% 9%

8%7%

10% 4%

16%

7%5%

20%19%

Roo

ms

pipe

line

as o

f FY

2010

In ‘000 roomsPipeline

A strong increase of pipeline vs. 2009

205

103

105

138

101

51

85

NB: Figures include traditional lodging and extended stay units but exclude timeshare products

APACVs

end 2009

-3%

-5%

+5%

+6%

0%

-24%

0%

(2)

(2) Hilton pipeline based on an internal press release, January 2011(1) Hilton geographical breakdown based on 2009 figures

(1)

Pipeline

http://www.starwoodhotels.com/

http://www.choicehotels.com/

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http://www.starwoodhotels.com/

http://www.choicehotels.com/

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Hilton – Company ProfileFY 20103

1. Company overview

Description

Main Figures Hilton Honors

Source: Euromonitor, Hilton press releases(1) 2009 figures

Ownership– 4th worldwide hotel player with one of the most recognized

brand worldwide• 3,600 hotels and vacation ownership / 600,000 rooms in 82

countries• 130,000 employees

– Funded in 1919, Hilton operates in 3 main segments• Traditional lodging industry• Extended stay segment• Timeshare segment

– Mainly US hotel player (≈ 80%)• Biggest “asset heavy” US hotel player (≈ 20%)• US pipeline leader

– 10 brands from Midscale to Luxury:– Operating type: Owned and Lease (5%), Mgnt (46%), Franchise

(69%)

– World hotels share (2010): 4.0%– In 2010 Hilton opened 178 hotels (more than 24,000 rooms)

and signed agreements for more than 230 hotels (>44,000 rooms)

– The world’s leading frequent-guest program– 27 million members– More than 2.5 million new members in 2010

– It is the only program of its type to offer its members– the ability to earn points and miles for the same hotel – enjoy hotel rewards with No Blackout dates or capacity

controls– to redeem points for free nights at any of the more than

3,500 properties within the Hilton Worldwide portfolio of hotels.

– 100 % private equity: Blackstone Group LLP – Acquisition for M$26 in 2007, taking the group private and

removing the requirement to report on its financial results.

– Blackstone reportedly organizing the financial records of Hilton Worldwide in a preliminary step toward floating the company on the international markets. Blackstone is leaning toward selling Hilton Worldwide as a complete unit.

5%

26%

69%

Operating type

Owned & LeaseMgntFranchise

89%

2%6% 2% 1%

Geographical Breakdown

North America

Latin America

Europe

APAC

MEA

# rooms

Mid-Lux. 3,793 623,114

# hotelssegment


4

LimitedService

FullService

ExtendedStay

Timeshare

Lodging Extended Stay Timeshare

ServicedApartments

Luxury

Upscale

Midscale

Source: Accor data extracted from Hilton Website as of March 2011

2. Brand positioning

24 h24 h19 h

561 h

247 h

208 h

512 h

1864 h

307 h

2 h

49 h

5

3. Room portfolio

H R H R H R H RH R

Luxury 43 16 131 375 8 2 974 18 6 987 4 1 546 2 743 11 3 882Waldorf = Astoria Collection Luxury 24 9631 401 4 1 605 14 5 618 3 1 204 1 401 2 803Conrad Hotels Luxury 19 6 500 342 4 1 368 4 1 368 1 342 1 342 9 3 079Upscale 1 016 315 697 311 177 61 515 675 197 844 41 13 423 51 17 940 72 24 975Hilton H&R Upscale Sofitel 561 201 960 360 156 56 160 266 95 760 29 10 440 47 16 920 63 22 680Double Tree Upscale Pullman 247 62 985 255 21 5 355 208 53 040 5 1 275 4 1 020 9 2 295Embassy Suites Upscale 208 50 752 244 201 49 044 7 1 708Midscale 2 376 252 816 106 26 3 211 2 328 247 215 20 2 116 1 137 1 137Hilton Garden Inn Ltd-Service Novotel 512 70 144 137 17 2 329 489 66 993 4 548 1 137 1 137Hampton Inn & Suites Ltd-Service 1864 182 672 98 9 882 1839 180 222 16 1 568Total Lodging 3 435 584 644 170 211 67 700 3 021 452 046 65 17 085 54 18 820 84 28 994Extended Stay 309 33 970 110 0 0 308 33 860 1 110 0 0Homew ood Suites Up. Upscale 307 33 770 110 306 33660 1 110 12 1 320Home2 Midscale 2 200 100 2 200Timeshare 49 4 500 92 4 367 40 3 673 5 459 0 0 0 0Hilton Grand Vacations Upscale 49 4500 92 4 367 40 3673 5 459

Total 3 793 623 114 167 215 68 067 3 369 489 579 71 17 654 54 18 820 84 28 994

Hotel avSize

Geographical repartition (italic=estimation)Europe North America Latin America Af. Mdle-East Asia Pac.Breakdown

by brand CategoryACCORBrand

(for example) Hotels Rooms


Source: Accor data extracted from Hilton Website as of March 2011

6

4. Geographical breakdown

Hotel and room network3,793 h / 623 KrAs of March, 2011

% of global network in nb of hotels

NorthAmerica3,339 h Europe

215 h

SouthAmerica

71 h

Asia / Pacific84 h

MEA54 h

X%

89%

6%

2%

• USA: 594 h• Canada: 37 h

• UK: 73 h• Italy: 20 h• Germany: 17 h• France: 8 h

• China: 23 h• Australia: 10 h• Thailand: 7h• India: 6 h

• Egypt: 17 h• UAE: 11 h• Saudi Arabia: 6 h

• Mexico: 30 h

Source: Accor data as of March 2011(1) incl. upper-upscale brands Waldorf and Conrad

1 %

88%

12%

31%

69% 99%

1%

98%

2%

MidscaleUpscale

72%

28%


2%

(1)

7

Development in 2010 Hilton opened 178 hotels with more than 24,000 rooms and signed management agreements or franchise

agreements on more than 230 hotels with more than 44,000 rooms, despite the economic downturn. 2010 saw Hilton Worldwide claiming to be the largest hospitality company in the US by number of rooms. The company’s luxury presence, which includes Waldorf Astoria Hotels & Resorts and Conrad Hotels &

Resorts, tripled over 2007-2010 in terms of current supply and pipeline combined. Europe: 22 h. openings in 2010 (50 for the last three years) , with 3,366 r.

Pipeline By the end of 2010 Hilton Worldwide had a global pipeline that included 868 hotels and more than 138,000 rooms

[23% of its existing portfolio]. Pipeline outside the US increased by nearly 40% in 2010 in terms of number of rooms, with the Asia Pacific and

Middle East and Africa regions combined increasing 52%. Hilton increased the percentage of its total pipeline of rooms outside the US from 15% in 2007 to approximately

50% by the end of 2010, and the percentage of its rooms under construction outside the US grew from 11% in 2007 to 73% by the end of 2010.


5. Pipeline and lodging development

Sources: Hilton Press Release as of January 24th, 2011*Lodging Econometrics Q4 2010

Group Pipeline by Region*

21% 56%

3%

20%

North America

EMEA

APAC

Latin America

8Hilton – Company Profile

FY 2010

6. Group strategyGlobal Expansion plan 2011-2015

Hilton intends to nearly double its footprint in Latin America (37 units as at March 2010) over 2011-2015.

Brazil is at the centre of Hilton’s interests, as the country will host large international sporting events such as the Football World Cup and the Olympic Games.

Other main gateway cities in Latin America such as Buenos Aires (Argentina), Santiago (Chile), Lima (Peru), Caracas (Venezuela), and Bogota (Colombia) are also of interest given potential short to medium term growth.

Although all brands are present in Latin America, Hilton has decided to focus on four brands – Hilton, DoubleTree, Hilton Garden Inn and Hampton. The latter is set to debut a brand new prototype designed exclusively for the Latin American market, being cost-effective to build and suited to guests’ needs for greater flexibility.

China and India Over 2011-2015, Hilton plans to open more than 180 hotels in the

Asia Pacific region through a multi-brand strategy that includes its mid-price, upscale and luxury brands.

China: Hilton intends to grow from 11 to more than 90 hotels over the period.

− In 2010, Hilton Worldwide signed eight management agreements with Shimao Group, a China-based real estate development conglomerate, for eight new hotels in eight key Chinese cities (properties are slated to start operations in 2011-2014).

India: to grow from 2 to over 60 hotels.− A joint venture with DLF Limited aims to develop hotel

properties and serviced apartments in India, with plans to develop and own 50-75 mid-scale and extended stay hotels in the market by 2014.

Latin America

Middle-East / North Africa Presence to be doubled by 2014 21 new properties opening across the region by 2014, four of

them being located in the UAE

Europe Largest pipeline across the region: 15,411 r. in active pipeline and

8,643 r. under construction Strategic development markets: UK, Germany, Italy and Turkey Multi-brand approach: in Germany alone, three new brands

have been launched almost simultaneously: Hampton by Hilton, Waldorf Astoria H&R and Hilton Garden Inn

Sources: Euromonitor, Press Review(1) Hilton Press release as of March 10, 2011

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9

– Hilton’s brand portfolio has recognised strengths in upscale, luxury and mid-scale, particularly in the US

– The addition of the Home2 suites reinforces the mid-tier and permits a Hilton guest to climb through the chains from Hampton to the Astoria

– Brand awareness– Worldwide scope– Mix operating type

Strengths

– Despite its portfolio strength, the majority of Hilton hotels are still located in the US. Such reliance on a single market made Hilton vulnerable to the recession that slashed its domestic market

– Early in 2010, Starwood won its legal case against Hilton (Accusation of theft of 10,000 documents from two former Starwood’s employees). Hilton has been fined and its business restricted for two years (no brand can be launched on the lifestyle market, as an answer to W brand)

Weaknesses

– Opportunity to develop rapidly the Home2 Suites brand as a result of its compact size and low development costs

– Hilton to benefit from its investments on applications for Iphone and Itouch

Opportunities– Lack of credit available in the US may hinder overall

expansion of Hilton’s luxury brand portfolio in the years to come

– Strong reliance on business travellers negatively impacted Hilton Worldwide’s 2008 and 2009 performance

Threats

7. SWOT analysis

Source: EuromonitorHilton – Company Profile

FY 2010

Lodging Brands

Waldorf = Astoria

Conrad

Embassy Suites

Hilton

DoubleTree by Hilton

Hilton Garden Inn

Hampton

Extended StayHomewood Suites

Home2 Suites

Timeshare Hilton Grand Vacations

Hilton – Company profileFY 2010

10 Source: Hilton Website

8. Brands description

11

8. Brands descriptionFull-service – Waldorf=Astoria

Overview

Full service, Luxury►Landmark hotels offering “worldly sophistication

and unparalleled guest service”►Flagship: Waldorf=Astoria in New York, acquired in

1949 by Conrad N. Hilton

Highlights►Culinary excellence, innovative services, and

individualized service►12 world-class golf experiences►20 sumptuous spas

Main competitors►The Ritz Carlton, Four Seasons, Fermont Hotels

Network

Network► 23 hotels, 9,631 rooms► Av. Size: 401 r.

Locations► World’s capitals and gateways

Geographical Breakdown► Footprint mainly US (14/23) but international

expansion on its way (opening of two new hotels in London and Berlin forecast in 2011)

Pipeline► 7 h. / 1,176 r.

Source: Hilton Website(1) Graph based on nb of h. as of March 2011(2) Lodging Econometrics Q4 2010 (graph based on nb of r.)


4%

17% 58%

13%8%

North AmericaEuropeAPACLatin AmericaMEA

19%

55%11%

15%


(1)

(2)

http://www.waldorfastoria.com/search/property-details.cfm?intPropertyId=26




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8. Brands descriptionFull-service – Conrad

Overview

Full service, Luxury►Global contemporary luxury and lifestyle brand►Striking design, distinct surroundings, as dynamic

reflection of the destination city and culture

Highlights►Breathtaking views►Spacious and luxurious guest rooms with superb

quality amenities►Modern style, pioneering culinary concepts,

sophisticated bars and restaurants and leading technology

Main competitors►Autograph Collection, The Luxury Collection

Network


Locations► World’s gateway cities, most sought-after resort

destinations

Geographical Breakdown► Global Footprint (strong presence in Asia)

Pipeline► 13 h. / 3,503 r.


Source: Hilton Website(1) Graph based on nb of h. as of March 2011(2) Lodging Econometrics Q4 2010 (graph based on nb of r.)

5%

21%

21%5%

48%


16%5%

13%

66%


(1)

(2)

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=HKGHCCI

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=CAICICI

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=FAOAPCI

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=TYOCICI

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=SJUCOCI

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=BKKCICI

http://conradhotels1.hilton.com/en/ch/hotels/index.do?ctyhocn=INDCICI

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8. Brands descriptionFull-service – Embassy Suites Hotels

Overview

Full service, Upper-upscale►Upper-upscale all suites hotels

Highlights►Every room is a spacious two-room suite to relax

and spread out, which includes the EmbassyEssentials Bedding Collection

►Fitness center►Complimentary Manager’s Reception is held

every evening, featuring beverages and lightappetizers.

Main competitors►Differentiated product: niche market

Network

Network► 208h, 50,752 suites► Av. Size: 244 r.

Locations► Gateway cities

Geographical Breakdown► Mainly US (only 9 h. outside)

Pipeline► 35 h. / 7,121 r.► US mainly


Source: Hilton Website(1) based on nb of h. as of March 2011(2) Lodging Econometrics Q4 2010

(1)

(2)

14

8. Brands descriptionFull-service – Hilton

Overview

Full service, Upper-upscale►One of the most recognized name in the industry►One of the leader of hospitality (hotels in 76

countries)►Flagship brand of Hilton worldwide

Highlights►Hilton’s journey Ambassador program, which

stresses personal care and attention for each and every guest

►Diverse portfolio includes premium hotel offerings for convention, business and leisure travelers –from the 1,400 SF room Hilton Orlando boasting175,000 SF of meeting space to the majesticHilton Bora Bora Nui Resort and Spa featuringover water villas

►In-room Hilton Serenity Collection features theHilton Serenity Bed, linens and custom-designedhammered stainless steel accessories

Main competitors►Sofitel, Grand Hyatt, Intercontinental, Westin,

Conrad

Network


Locations► Most of the major cities worldwide

Geographical Breakdown► Global Footprint: 79 countries

Pipeline► 112 h. / 33,934 r.


Source: Hilton Website(1) based on nb of h. as of March 2011(2) Lodging Econometrics Q4 2010 (graph based on nb of r.)

8%

28%

48%

5%11%


23%16%

11%

6%

44%


(1)

(2)

15

8. Brands descriptionFull-service – Double Tree (1/2)

Overview

Full service, Upscale►First hotel outside North America in 2008, fast

growth worldwide since (presence in 15 countries)►Since international roll out in 2008, separate

identities: DoubleTree in North America vs. DoubleTree by Hilton outside

►In 2011, introduction of a new DoubleTree by Hilton global identity, thus proving the power of the affiliation:

• Homogenization of brand identity under “DoubleTree by Hilton” worldwide,

• while requiring rebranding of over 80% of existing network

Highlights►Meeting and event facilities at Doubletree hotelsand resorts range from 2,500 to 150,000 squarefeet

►Fitness facilities►One of the fastest growing upscale brands

(network grew by more than 40% since 2000)

Main competitors►Pullman, Sheraton, Marriott H&R, Grand Plaza,

Hyatt Regency

Network


Locations► Gateway cities, metropolitan areas, vacation

destinations

Geographical Breakdown► Mainly US but global expansion on its way

Pipeline► 50 h. / 10,289 r.



2%9%

83%

2%4% North America

EuropeAPACLatin AmericaMEA

8%

30%

17%2%

43%


(1)

(2)

16

1969 1999 2008 2011

• Creation of DoubleTree Hotels in the US

• Global rebranding initiative : Addition of “by Hilton” to the brand name for every DoubleTree hotel

• Objective to further reinforce the brand’s affiliation to Hilton Worldwide and to be able to communicate with a unified worldwide look

• First hotel out of North America, under Doubletree by Hilton brands.

• Beginning of the distinction between DoubleTree in North America vs. DoubleTree by Hilton outside North America.

• Merger between Hilton Hotels Corporation and Promus Hotels Corporation, DoubleTree’s parent company

DoubleTree by Hilton is worldwide brand of upscale, full-service hotels and resorts :– First hotel outside North America in 2008, fast growth worldwide since (presence in 15 countries)– Since international roll out in 2008, separate identities: DoubleTree in North America vs. DoubleTree by Hilton

outside– In 2011, introduction of a new DoubleTree by Hilton global identity, thus proving the power of the affiliation

Homogenization of brand identity under “DoubleTree by Hilton” worldwide, while requiring rebranding of over 80% of existing network: 178 hotels in North America vs. 40 hotels outside NA.

8. Brands descriptionFull-service – Double Tree (2/2)

17

8. Brands descriptionLimited service – Hilton Garden Inn

Overview

Limited service, Midscale►Upscale, focused service brand, provides a range

of amenities for business guests, ensuring they have everything they need to be productive on the road

►Global expansion in key markets in Europe (UK, Germany, Italy) and APAC (India and China)

Highlights►Meeting rooms►Snacks available►Swimming pool and fitness center available in

most hotels

Main competitors►Novotel, Hilton Garden Inn, Ramada, Holliday Inn,

Hyatt Place

Network


Locations► All major and secondary cities in the US

Geographical Breakdown► Mainly North America

Pipeline► 145 h. / 21,436 r.


1%

25%64%

1%9%


(1)

0%3%

96%

1%0% North America

EuropeAPACLatin AmericaMEA


(2)

18

8. Brands descriptionLimited service – Hampton

Overview

Limited service, Midscale►Hampton brand was refreshed in 2004, unveiling

more than 60 new products and standards.►Hampton Inn & Hampton Inn & Suites

Highlights►Crisp and cozy bed►Fitness room

Main competitors►Courtyard, Fairfield Inn, Holliday Inn Express

Network

Network► 1,864hotels, 182,672 rooms► Av. Size: 98 r.

Locations► All major and secondary cities in the US

Geographical Breakdown► Mainly North America (99%)► Strongest in the US, in 2009 Hampton opened

its first “Hampton by Hilton” hotel in the UK

Pipeline► Mainly North America► 332 h. / 33,338 r.


(1)

(2)


19

8. Brands descriptionExtended stay – Homewood Suites

Overview

Extended stay, Limited service, Upscale►More than 275 h. throughout the US, Canada and

Mexico►Comfortable and home-like accomodations when

travelling for an extended stay

Highlights►Separate living and sleeping areas►Fully-equipped kitchens►Complimentary internet►Evening meals Monday-Thursday

Main competitors►Hawthorn Suites, Residence Inn, Baymont Inn &

Suites, Summerfield Suites

Network

Network► 307 h., 33,370 r.► Av. Size: 110 r.

Locations► Selected key cities

Geographical Breakdown► North America only (1 in Latin America)

Pipeline► 67 h. / 7,339 r.► 2 projects in India



(1)

(2)

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8. Brands descriptionExtended stay – Home 2

Overview

Extended stay, Limited service, Midscale►Newest focused service brand, mid-tier extended

stay chain, more affordable version of Hilton’s Homewood Suites

►Average rates around $100, while the basics of extended stay such as common public areas to foster guest interaction as well as on-site amenities like pools and fitness centres will be kept

►Nearly 80% of its rooms will be studios and the remaining 20% one-bedroom suites

►Home2 Suites is in line with Hilton´s strategy to diversify its consumer base and attract a wider range of travellers, including women, young people and leisure guests.

►100% franchise operating type

Highlights►Separate living and sleeping areas►Industry-unique “working wall”

which incorporates the kitchen and a flexibleworking/media space

►Fully accessorized kitchen

Main competitors►Marriott's TownePlace Suites and

InterContinental's Candlewood Suites

Network

Network► The first Home2 Suites opened 7 February 2011

in Fayetteville, NC. 54 more are planned, with 30 more in the pipeline, and five properties are under construction -- to open in 2011 or early 2012.

► Ambition to open about 100 hotels by the end of 2013 in the US, Canada and Mexico

Locations► Selected key cities

Geographical Breakdown► USA only

Pipeline► 61 h. / 6,046 r.(US only)

Source: Hilton Website, Euromonitor(1) Lodging Econometrics Q4 2010


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21

8. Brands descriptionTimeshare – Hilton Grand Vacations

Overview

Timeshare, Upscale►New affiliation programme called ‘capital light’,

under which Hilton Grand Vacations will assume responsibility for Grand Pacific MarBrisa timeshare sales and marketing, on a “fee-for-service” basis

Highlights►Studios and spacious 1, 2 and 3 bedroom

accommodations ►On-property amenities may include: swimming

pool, spas, exercise facilities, sports courts, videoarcades and restaurants

Main competitors►Marriott Vacation Club

Network

Network► 38 properties, 4,500 rooms

Locations► Select vacation destinations

Geographical Breakdown► Mainly North America (4 properties in Europe,

including 3 in Scotland)

Source: Hilton Website Hilton – Company profileFY 2010

Hilton FY 2010

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