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March 8, 2014updated Mar 12, 2014

Hilton’s Luxury Game Plan Pays Off

By Chris Boyle

LobbyIn virtually every business, the game changes over time.

Go back 30 years and in many cities around the world and the Hilton was often the top hotel in town.

Most “luxury” hotels were one-off affairs, often family run and a bit dusty or stuffy. Groups that reinvented luxury hotels as they are today such as Four Seasons, Aman Resorts and Ritz-Carlton were just being born or were a handful of hotels with a regional footprint.

Conrad Hotels, named for founder Conrad Hilton, was the result of Hilton Hotels Corporation and Hilton International being two separate companies at the time.  Conrad, launched in 1985, was U.S. based Hilton Hotels’ attempt at international expansion, albeit with a luxury angle.

Needless to say there has been a proliferation of luxury brands, some created such as Four Seasons and Conrad, some based on leveraging the name of a famous hotel such as Ritz-Carlton, St. Regis and Waldorf Astoria.

Another change is ownership structure. What’s true with most luxury brands today is are they are just that – brands.  The buildings are owned by investment funds, real estate developers or wealthy individuals, not the company with the name on the flag. So if tomorrow you were to announce you were building a huge new multi-use complex in Beverly Hills or Beijing and included in your 40 story office tower mall you have space for two hotels, your phone would be ringing with hotel development executives pitching you on why you should let them brand and manage your hotels.

Having multiple brands such as Hilton Worldwide helps make the case.  For example, in Orlando a Waldorf Astoria and Hilton are part of the same complex.

New source markets of luxury consumers driven by globalization and emerging economies has led to new pipelines of guests and new places that today have the volume of luxury customers to support more high end hotels, for example, Conrad in Indianapolis and Pune, India or Waldorf-Astoria in Amsterdam (pictured above) and Jerusalem, both opening in the coming months.

Hilton Worldwide, while a bit late to the party in getting its luxury focus,  has been particularly active and successful since the 2009 arrival of John Vanderslice as Head of its luxury brands.

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Waldorf Astoria currently has 24 properties open and 13 more in the pipeline, while Conrad has 23 properties online and another 13 on the way.  More deals are in the works, but with a clear path to 73 hotels the luxury portfolio was an important factor in the company’s $2.35 billion IPO last year.

We caught up with Vanderslice in the Presidential Suite (2013 Elite Traveler 101 Top Suites winner) at the year old Waldorf Astoria Berlin this past week where he described the changing luxury consumer succinctly. “I personally don’t believe in traditional lines of demographics.  A 45 year old can have the same mindset as a 28 year old.  I think its more lifestyle marketing,” he said.

“The expansion of the younger luxury customer continues to blow us away. If you look at the numbers versus five years ago the number of millionaires who are younger has grown. Nearly half are entrepreneurs.

“You see it in our hotel lobbies everyday.  I was in the lobby of Conrad Tokyo on a Saturday, and they will have three business meetings and two social meetings.  They are wired.  They travel and the difference between work and play is seamless.  They are casual looking in demeanor and demanding in service.”

By creating differentiated brand experiences, Conrad and Waldorf Astoria play to different segments of the increasingly fragmented luxury consumer market.  As an example, last year Conrad unveiled Conrad Concierge, a mobile device application enabling guests to check-in on their way from the airport, schedule wake-up calls, get dinner reservations and things you would normally call a concierge, ring, ring, ring, may I put you on a brief hold sir.

Instead tech savvy, want it now guests can do it all from their internet connected device of choice.  So far 12% of guests use it, and the ones who use it are 24% more satisfied, according to Vanderslice, who reports 162,000 people have downloaded the app.

The Conrad Concierge concept is now being applied for meeting planners.  Vanderslice said, “There are about 10 things meeting planners ask for.  For example, the meeting is ending early. Can you get the food out early?  We’re going to give them a menu that links them directly to hotel services.  We rolled it out in the US and we are rolling it out globally now.”

Meanwhile with its more iconic approach to luxury Waldorf Astoria recently highlighted its positioning of “personalized attention of true Waldorf service” by engaging Simon Van Booy to write a story featuring model and actress Olga Kurylenko using the company’s hotels as the setting for a tale of international intrigue.  Details of precisely combed hair on an eager and engaged real person concierge who was tracking the flight of Ms. Kurylenko speaks to the personal touch Waldorf Astoria seeks to deliver.

In terms of pinning more dots on the map, last week the Yabu Pushelburg designed Waldorf Astoria Beijing opened near the Forbidden City and this coming week Waldorf Astoria Dubai Palm Jumeirah has its official opening.  Heinz Beck will open his restaurant Social at the hotel.  The opening further strengthens Hilton’s luxury position in the Gulf following last year’s openings of the Conrad Dubai and Waldorf Astoria Ras Al Khaimah and ahead of Waldorf Astoria Doha in 2015.

Waldorf Astoria Amsterdam is a 93-room conversion of six historic canal side buildings in the heart of the central zone of Amsterdam, a recently declared UNESCO World Heritage site, and will offer a courtyard tea garden and a lounge in a former banking vault.

On the culinary side Jonnie and Therese Boer, who own three-Michelin star restaurant De Librije in Zwolle and two-star restaurant Librije’s Zusje, are overseeing F&B, and have brought in Sidney Schutte, former chef at Lirije as executive chef.

Waldorf Astoria Jerusalem occupies the former Palace Hotel built in 1929. In addition to the current structure, additional floors were added for a total of 226 rooms and 30 condominium Residences.  There is a Guerlain Spa andthe hotel will feature panoramic views of Jerusalem’s Old City with a rooftop terrace lounge.

One industry watcher who has been tracking Hilton’s luxury growth put it this way: “Five years ago they were not a major player.  Today you have to take them very seriously. They are winning their share of deals and seem to have a lot of momentum.”

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