Hilton Acquires Majority Controlling Interest in Sydell Group to Expand NoMad Hotels Brand Worldwide

Rhea-AI Summary

Hilton acquires majority stake in Sydell Group to expand NoMad Hotels brand globally, marking its entry into luxury lifestyle hotel market. Sydell to handle design and management while Hilton leads development. NoMad properties to offer unique luxury experiences in desirable locations, with plans for global expansion.

Insights

Market Research Analyst

The acquisition of a majority controlling interest in Sydell Group by Hilton signifies a strategic move into the luxury lifestyle hotel market, a sector that has seen robust growth as affluent travelers seek more personalized and unique experiences. The integration of the NoMad brand into Hilton's portfolio aligns with the company's expansion strategy, leveraging its established global presence and commercial platforms to scale the brand effectively.

From a market perspective, this acquisition is likely to have a positive impact on Hilton's competitive positioning, as it diversifies its luxury offerings and taps into new customer segments. The projected development of up to 100 NoMad properties could significantly increase Hilton's footprint in the high-end market and drive revenue growth. Additionally, the integration with the Hilton Honors program could enhance customer loyalty and increase direct bookings, which are generally more profitable for hotel operators.

Hospitality Industry Analyst

Hilton's entry into the luxury lifestyle segment through NoMad Hotels is indicative of the industry's shift towards creating more localized and immersive experiences. The emphasis on unique interior design, exceptional food and beverage services and the inclusion of local art collections in guest rooms reflects a broader trend in hospitality where differentiation is key to attracting discerning travelers.

Furthermore, the decision to keep NoMad properties independently owned while integrating them into Hilton's commercial engine could provide a win-win scenario. It allows for the preservation of each hotel's individual character, which is central to the brand's appeal, while benefiting from Hilton's robust distribution and loyalty systems. This hybrid model could serve as a benchmark for future acquisitions and partnerships within the industry.

Financial Analyst

The financial implications of Hilton's acquisition of Sydell Group's NoMad brand are multifaceted. Initially, the capital outlay for the majority stake and the subsequent investment in global development will impact Hilton's cash flow. However, this move should be viewed within the context of Hilton's broader growth strategy, which includes partnerships and acquisitions aimed at bolstering its luxury and lifestyle portfolio.

Long-term, the expansion of NoMad Hotels is expected to contribute to Hilton's revenue diversification and could potentially provide a higher Average Daily Rate (ADR) given the brand's positioning in the luxury segment. It's important for investors to monitor the pace of NoMad's integration and development, as well as the performance of these new properties in terms of occupancy rates and guest satisfaction, to gauge the success of Hilton's investment.

Brand marks Hilton’s debut in fast-growing luxury lifestyle category

MCLEAN, Va. & MIAMI--(BUSINESS WIRE)-- Hilton (NYSE: HLT) today announced it has acquired a majority controlling interest in Sydell Group (“Sydell”) to expand the NoMad Hotels brand from its existing London flagship location to high-end markets around the world. The addition of NoMad to Hilton’s brand portfolio marks the global hospitality leader’s entry into the fast-growing luxury lifestyle hotel market with a meticulously designed brand defined by exceptional food and beverage, interior design and service.

NoMad London (photo: Simon Upton)

Over the last decade, Sydell, led by founder Andrew Zobler, has created seven dynamic lifestyle brands, with award-winning hotel concepts including NoMad, The Line, Freehand and The Ned. Sydell will be responsible for design, branding and management of the NoMad brand while Hilton will lead all development. The NoMad brand will be fully integrated into Hilton’s commercial platforms, including Hilton Honors. All NoMad properties will remain independently owned.

Hilton projects that as many as 100 NoMad properties will be developed globally over time, with approximately 10 already in advanced stages of discussion with Sydell.

“Adding NoMad to our growing brand portfolio will create new offerings for guests seeking unique luxury experiences in some of the world’s most desirable locations,” said Chris Silcock, president, global brands and commercial services, Hilton. “By pairing an already proven brand concept that’s ready for expansion with the power of Hilton’s commercial engine, we are accelerating our ability to drive growth in the luxury lifestyle segment.

“Coupled with our recently announced exclusive partnership with Small Luxury Hotels of the World and our planned acquisition of the Graduate Hotels brand, Hilton is leading the hotel industry with the addition of innovative new luxury and lifestyle offerings that meet changing guest needs and add new opportunities for owners to join our system,” Silcock said.

Each NoMad hotel added to Hilton’s network will provide a uniquely local luxury experience that makes guests feel like residents of some of the world’s most sought-after neighborhoods. NoMad Hotels are both grand and intimate, fun and elegant, and classic and playful, creating a unique blend of luxury and lifestyle experiences throughout the stay with special touches like unique local art collections featured in each guest room.

NoMad’s flagship property – the NoMad London – will be available for booking to Hilton guests beginning later this year, and an expansion of NoMad is planned to follow in the world’s top markets. NoMad London has set the standard for luxury lifestyle experiences since its opening in 2021 and offers a ready-made platform for expansion in markets worldwide.

NoMad Las Vegas is excluded from the transaction and will rebrand to a new flag in the coming months.

“We’re excited to begin this new phase for Sydell, as we enter into a partnership with Hilton to expand the NoMad brand around the world,” said Andrew Zobler, founder and CEO, Sydell. “Grounded in the idea of the hotel as a great home, the NoMad brand is dedicated to providing guests with accessible luxury, exceptional design and award-winning food and beverage. Hilton’s expertise in both luxury and lifestyle, paired with its track record in scaling brands, makes for an exciting opportunity. We look forward to seeing NoMad expand into sought-after neighborhoods all around the world.”

NoMad will bring Hilton travelers a new sophisticated option for luxury stays in some of the world’s greatest locations, complementing the company’s fast-growing portfolio of luxury brands. Hilton has luxury hotels across its Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, LXR Hotels & Resorts, and Signia by Hilton brands, and recently announced an exclusive partnership with Small Luxury Hotels of the World that altogether are expected to boost Hilton’s total luxury inventory to 600-700 properties in the coming years.

NoMad will participate in Hilton Honors, Hilton’s award-winning guest loyalty program for the company’s portfolio of more than 7,500 properties worldwide. Members who book directly with Hilton have access to instant benefits, including a flexible payment slider that allows members to choose nearly any combination of Points and money to book a stay, exclusive member discounts, free standard Wi-Fi and the Hilton Honors mobile app.

Hilton continues to offer customers the right stay for every travel occasion through an unmatched portfolio of industry-leading brands plus exclusive partnerships that create more experiences for guests to dream about. The addition of NoMad, as well as the planned acquisition of Graduate Hotels and recently announced partnerships with Small Luxury Hotels of the World and AutoCamp, add to the company’s dramatic growth trajectory and reflect its focus on accelerating offerings for customers in the industry’s fastest-growing segments and markets.

Financial terms of the transaction were not disclosed.

About Sydell Group

Founded by Andrew Zobler in 2011, Sydell Group is the creator of unique lifestyle hotels rooted in their location and architecture. Sydell's core expertise is in bringing together emerging and established talent from the worlds of design, food & beverage, art and hospitality to create hotels and restaurants that offer inspiration, comfort, graciousness of spirit and a deep sense of place. Over the last decade, Sydell has created seven dynamic lifestyle brands, with award-winning hotel concepts including NoMad, The Line, Freehand and The Ned. Each of the concepts has been widely celebrated for its site-specific uniqueness, compelling food and beverage offerings, vibrant public spaces and overall focus on design and culture. In 2023, NoMad London was named one of the World’s 50 Best Hotels and in 2021 was named the Global Ultimate Hotel by AHEAD.

About Hilton

Hilton is a leading global hospitality company with a portfolio of 22 world-class brands comprising more than 7,500 properties and nearly 1.2 million rooms, in 126 countries and territories. Dedicated to fulfilling its founding vision to fill the earth with the light and warmth of hospitality, Hilton has welcomed over 3 billion guests in its more than 100-year history, was named the No. 1 World’s Best Workplace by Great Place to Work and Fortune and has been recognized as a global leader on the Dow Jones Sustainability Indices for seven consecutive years. Hilton has introduced industry-leading technology enhancements to improve the guest experience, including Digital Key Share, automated complimentary room upgrades and the ability to book confirmed connecting rooms. Through the award-winning guest loyalty program Hilton Honors, the more than 180 million members who book directly with Hilton can earn Points for hotel stays and experiences money can't buy. With the free Hilton Honors app, guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their smartphone. Visit stories.hilton.com for more information, and connect with Hilton on Facebook, Twitter, LinkedIn, Instagram and YouTube.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to the expectations regarding the performance of Hilton's business, future financial results, liquidity and capital resources and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "forecasts," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry; macroeconomic factors beyond Hilton's control, such as inflation, changes in interest rates, challenges due to labor shortages or disputes and supply chain disruptions; competition for hotel guests and management and franchise contracts; risks related to doing business with third-party hotel owners; performance of Hilton's information technology systems; growth of reservation channels outside of Hilton's system; risks of doing business outside of the U.S.; risks associated with conflicts in Eastern Europe and the Middle East and other geopolitical events; and Hilton's indebtedness. Additional factors that could cause Hilton's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I—Item 1A. Risk Factors" of Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which is filed with the Securities and Exchange Commission (the "SEC") and is accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in Hilton's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

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Source: Hilton

FAQ

What did Hilton announce regarding Sydell Group?

Hilton announced the acquisition of a majority controlling interest in Sydell Group to expand the NoMad Hotels brand globally.

Who will be responsible for the design and branding of the NoMad brand?

Sydell Group will be responsible for the design, branding, and management of the NoMad brand.

How many NoMad properties are projected to be developed globally?

Hilton projects that as many as 100 NoMad properties will be developed globally over time.

What will NoMad properties offer guests?

NoMad properties will offer guests unique luxury experiences in some of the world's most sought-after neighborhoods.

What loyalty program will NoMad participate in?

NoMad will participate in Hilton Honors, Hilton's award-winning guest loyalty program.

What is the expected total luxury inventory for Hilton in the coming years?

Hilton expects its total luxury inventory to reach 600-700 properties in the coming years.