Hilton Set to Double Lifestyle Portfolio To 700 Hotels Within Next Four Years

Rhea-AI Summary

Hilton (NYSE: HLT) plans to double its lifestyle hotel portfolio to 700 properties by 2028, driven by the recent acquisitions of Graduate Hotels and NoMad brands. This expansion reflects the increasing demand for lifestyle and luxury experiences. Hilton is set to open 100 new lifestyle hotels in 2023 alone, marking significant growth in this category. Key developments include the debut of Hilton's 400th lifestyle property and the launch of NoMad's flagship London hotel.

Additionally, Hilton has appointed Kevin Osterhaus as President of Global Lifestyle Brands to oversee growth and integration. Hilton's lifestyle brands, including Canopy by Hilton, Curio Collection, Graduate by Hilton, Motto by Hilton, Tapestry Collection, and Tempo by Hilton, are expanding globally with new properties in high-value markets.

Hilton aims to enhance its market reach and cater to guest preferences for unique and localized travel experiences.

Positive

• Hilton plans to double lifestyle portfolio to 700 hotels by 2028.
• Acquisition of Graduate Hotels and NoMad brands boosts expansion.
• Hilton set to open 100 new lifestyle hotels in 2023.
• Debut of Hilton’s 400th lifestyle property this year.
• Introduction of NoMad's flagship London hotel to the market.
• Kevin Osterhaus appointed as President of Global Lifestyle Brands.
• Significant global expansion for lifestyle brands like Canopy, Curio, Graduate, Motto, Tapestry, and Tempo.
• Growth in high-value leisure destinations, including new markets in Greece, Malta, Japan, Croatia, Lithuania, Kenya, and more.

Negative

• No specific financial metrics or revenue projections disclosed.
• Potential risk of overexpansion in the competitive lifestyle category.
• Integration challenges with newly acquired brands.
• Increased operational complexities due to rapid global expansion.

Insights

Financial Analyst

Hilton's aggressive expansion in the lifestyle category underscores a strategic move to tap into the growing demand for unique travel experiences. The acquisitions of Graduate Hotels and NoMad brands align with the company's goal to double its portfolio to 700 lifestyle hotels by 2028. From a financial perspective, this expansion presents both opportunities and risks. The increased inventory can lead to higher revenue streams; however, the integration costs and potential dilution of brand value pose challenges.

Acquisitions often come with significant capital expenditure and integration costs. The synergy between Hilton's existing brands and the newly acquired ones will be important for maintaining profitability. Investors should monitor Hilton's balance sheet for any signs of increased debt levels or cash flow issues in the short-term. Long-term potential benefits include higher market share and diversified revenue sources.

Market Research Analyst

The lifestyle hotel segment is experiencing robust growth driven by a shift in consumer preferences towards localized and unique travel experiences. Hilton's move to integrate Graduate Hotels and NoMad into its portfolio aligns well with this trend. These brands are known for their distinct identities, which cater to niche markets, including college towns and luxury travelers.

This expansion is not just about increasing the number of hotels but also about enhancing brand appeal. The lifestyle segment is characterized by higher average daily rates (ADR) and better occupancy rates compared to traditional hotel segments. Investors should note that Hilton's ability to leverage these brands for higher ADR could positively impact revenue per available room (RevPAR), a key performance indicator in the hospitality industry.

Hospitality Industry Expert

The appointment of Kevin Osterhaus as the new Global Lifestyle President is a strategic move to oversee the integration and growth of Hilton's lifestyle brands. Osterhaus brings extensive experience from leading roles in other renowned hospitality groups, which can be beneficial in maintaining the unique appeal of each brand while ensuring seamless operations.

Hilton's diversified portfolio, including brands like Canopy, Curio and Motto, indicates a strong commitment to catering to various market segments. The lifestyle segment is evolving, with guests seeking more personalized and authentic experiences. Hilton's strategy to focus on this segment will likely enhance guest loyalty and brand differentiation. However, maintaining the unique characteristics of each brand while under a larger corporate umbrella will be a significant challenge in the long term.

Recent Acquisitions of Graduate Hotels and NoMad Brands and Appointment of New Global Lifestyle President Affirm Hilton’s Focus on Lifestyle Category Expansion

MCLEAN, Va.--(BUSINESS WIRE)-- With nearly 350 existing lifestyle hotels and another 350 expected to join the portfolio by 2028, Hilton (NYSE: HLT) is set to double its presence in the fast-growing lifestyle category in the next four years. The recent addition of Graduate Hotels and NoMad to Hilton’s portfolio, coupled with increasing guest and owner demand, has positioned the company to further accelerate lifestyle category growth.

The recent addition of Graduate Hotels and NoMad to Hilton’s portfolio, coupled with increasing guest and owner demand, has positioned the company to further accelerate lifestyle and luxury lifestyle category growth. (Photo: Hilton)

After adding more than 50 new lifestyle hotels and approving another 100 in 2023, Hilton anticipates opening more than 100 new hotels this year across its lifestyle brands, each designed to meet the increased enthusiasm from guests for distinct and localized travel experiences. This year will also mark the debut of Hilton’s 400^th property in the category.

The accelerated growth will be supported by the addition of the Graduate and NoMad brands. NoMad’s flagship London hotel and more than 30 existing Graduate locations will be available on Hilton’s booking channels later this summer, in addition to new Graduate hotels that will open this year in Princeton, N.J. and Auburn, Ala.

“As we celebrate the 10^th anniversary of Hilton’s entry into the lifestyle segment, we look ahead to even more rapid growth with a powerhouse line-up of brands that will meet the needs of developers and guests alike in some of the world’s most desirable locations,” said Kevin Jacobs, chief financial officer and president, global development, Hilton. “The recent addition of the Graduate and NoMad brands to our lifestyle and luxury lifestyle portfolio will accelerate our growth as we look for more opportunities to deliver the exceptional experiences guests want in the world’s top hotel destinations.”

NoMad to Drive Luxury Lifestyle Category Growth
Earlier this year, Hilton announced plans to expand the NoMad luxury lifestyle brand from its existing London flagship location to high-end markets around the world. NoMad, a meticulously designed brand defined by exceptional food and beverage, captivating interior design and exemplary service, will bring Hilton travelers a new sophisticated option for luxury stays in some of the world’s greatest locations.

Andrew Zobler, founder and CEO, Sydell Group, continues to lead the NoMad brand with responsibility for design, branding and hotel management while Hilton is leading future development. Over the last decade, Zobler and his team have 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.

Hilton Introduces New Global Lifestyle President
Hilton also has appointed Kevin Osterhaus as president, global lifestyle brands to steward the growth, design and development of the Canopy by Hilton, Curio Collection by Hilton, Graduate by Hilton, Motto by Hilton, Tapestry Collection by Hilton, and Tempo by Hilton brands.

Osterhaus joins Hilton from Graduate Hotels, where, as president, he oversaw all aspects of global operations and marketing for the company’s portfolio, which includes more than 30 properties across the United States and the United Kingdom. Kevin developed his expertise in creating memorable guest experiences through his extensive background in the hospitality industry marked by leadership roles at Ennismore International, The Hoxton Hotels, SIXTY Hotels, and Standard International. Additionally, he played a pivotal role in the Bunkhouse Group's growth.

“We are excited to welcome Kevin and benefit from his extensive experience in the increasingly important lifestyle category,” said Chris Silcock, president, global brands and commercial services, Hilton. “Kevin will oversee the seamless integration of the Graduate brand into our lifestyle portfolio to ensure we maintain and accelerate what has made Graduate a fan-favorite with guests, as well as lead the strategic vision for all of Hilton’s lifestyle brands.”

"Hilton's lifestyle brands are aspirational, design-led, and experiential with authentic points of view reflected in every aspect of the stay,” said Kevin Osterhaus, president, global lifestyle brands, Hilton. “I look forward to building on the category’s success and continuing Hilton’s commitment to pushing the boundaries of what it means to be a lifestyle brand."

Hilton’s growing portfolio of lifestyle brands now includes:

Canopy by Hilton
Blending sophisticated design with crafted touchpoints that celebrate the best of the neighborhood, Canopy by Hilton offers an inviting and locally inspired boutique hotel experience. This year, the brand opened its first resort property with Canopy by Hilton Seychelles, positioning the brand’s expansion into high-value leisure destinations with additional resorts planned in Okinawa, Japan; Bozeman, Montana, and more. Canopy by Hilton – which celebrates its 10^th anniversary in 2024 – signed six new hotels in the first quarter, including two new countries in Greece and Malta, and will debut in Japan this year.

Curio Collection by Hilton
Curio Collection by Hilton provides immersive, one-of-a-kind experiences in the world's most sought-after destinations. Expanding from 34 countries in 2022 to 40 countries by mid-2024, the brand’s growth highlights its appeal in diverse markets, offering guests bespoke and elevated adventures in key urban and resort destinations. Celebrating its 10^th anniversary, the brand plans to open nearly 30 new properties this year. Keight Hotel Opatija, Curio Collection by Hilton marks the brand's debut in Croatia and its 40^th country milestone. Additional first-in-country entries in 2024 include Grand Hotel Vilnius in Lithuania and Kwetu Nairobi in Kenya; the soon-to-open Zemi Miches All-Inclusive Resort in the Dominican Republic; and nine first quarter signings in new markets such as Romania, Thailand, and Mykonos poise the brand for continued growth.

Graduate by Hilton
In a strategic move to enhance market reach and diversify its offerings, Hilton has welcomed Graduate Hotels into its lifestyle category. This addition brings a unique blend of collegiate charm and nostalgia, targeting key customer segments that seek localized travel experiences. The brand currently has a portfolio of more than 35 properties open or in the pipeline, with Graduate Princeton and Graduate Auburn scheduled to open in 2024. With thousands of colleges and universities around the world, the addressable market for the Graduate brand is 400-500 hotels globally.

Motto by Hilton
Featuring flexible spaces and dynamic design inspired by the location, Motto by Hilton connects guests and locals to the center of it all. The brand continues expanding its footprint, most recently debuting in South America with Motto by Hilton Cusco. With robust expansion plans, Motto by Hilton is set to be in 10 countries by 2026, further cementing its position as a global player in the lifestyle hotel segment. As the first hotel of its kind in Asia, Motto by Hilton Hong Kong Soho will debut in late 2024 and the brand will also expand into Bentonville, Arkansas, later this year.

Tapestry Collection by Hilton
Each Tapestry Collection by Hilton property boasts a unique and vibrant personality crafted through elevated design and locally inspired food and beverage, offering guests authentic experiences in diverse destinations. After celebrating its 100^th opening in 2023, the brand is now on track to reach its 150^th opening this year. With a strong pipeline of more than 100 properties, showcasing significant expansion in the independent hotel segment and market penetration, especially through conversions, Tapestry is expanding in high barrier-to-entry markets in Europe where small boutique properties are looking for an engine to help them grow. A number of first-in-country milestones are slated for the brand, with openings planned in Thailand, Paraguay and Türkiye. Later this year, the first Hilton in Bermuda will open with Bermudiana Beach Resort, Tapestry Collection by Hilton.

Tempo by Hilton
With a stylish, contemporary experience tailored to the needs of active, ambitious travelers, Tempo by Hilton features purposefully designed guest rooms, wellness-focused amenities, and balanced food & beverage options to empower guests to maintain their routines and thrive. Tempo by Hilton is rapidly expanding its footprint with recent and upcoming openings in Times Square, Nashville, Louisville and Raleigh, and expects to have approximately 30 hotels open by 2026.

To learn more about Hilton’s growing portfolio, visit stories.hilton.com.

About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 24 world-class brands comprising more than 7,600 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 nearly 190 million Hilton Honors 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240603349911/en/

Jake Woodley, Jake.Woodley@Hilton.com

Source: Hilton

FAQ

What is Hilton's stock symbol?

Hilton's stock symbol is HLT.

How many lifestyle hotels does Hilton plan to have by 2028?

Hilton plans to have 700 lifestyle hotels by 2028.

What new brands did Hilton acquire recently?

Hilton recently acquired Graduate Hotels and NoMad brands.

Who is Hilton's new President of Global Lifestyle Brands?

Kevin Osterhaus is the new President of Global Lifestyle Brands at Hilton.

How many new lifestyle hotels is Hilton opening in 2023?

Hilton is opening 100 new lifestyle hotels in 2023.

What is significant about Hilton's lifestyle category growth this year?

Hilton will debut its 400th lifestyle property this year.

When will NoMad's flagship London hotel be available on Hilton's booking channels?

NoMad's flagship London hotel will be available on Hilton's booking channels later this summer.